Farm Input Subsidies: Can They Be Defended?

 

The use of farm input subsidies has been controversial since the early 1980s when the World Bank and IMF promoted Stabilization and Structural Adjustment Policies to solve the debt and poor economic growth problems that many LDC countries faced. The word "subsidy" almost became like a swearword and the classical discussion by Pigou of the potential of taxes and subsidies to internalize externalities was almost forgotten.

 

With the Millennium Development Goals and a stronger focus on poverty reduction and poverty targeting, input subsidies has again emerged as an important policy instrument and is acknowledged and supported by the World Bank in some countries.

 

My research on the role of input subsidies goes back to assessing the various impacts of agricultural subsidies in the 1980s on deforestation, land degradation and household welfare, to how to design smart subsidies to internalize environmental externalities, and recently to assessing a range of impacts from the targeted Farm Input Subsidy Program in Malawi.

Papers and presentations:

 

Holden, S. T. and Lunduka, R. (2014). Input Subsidies, Cash Constraints and Timing of Input Supply. American Journal of Agricultural Economics 96(1): 290–307. Link

 

Skjeflo, S. W. and Holden, S. T. (2014). Economy-wide effects of input subsidies in Malawi: Market imperfections and household heterogeneity. CLTS Working Paper No. 7/2014. Centre for Land Tenure Studies, Norwegian University of Life Sciences, Ås, Norway. Link

 

Holden, S. T. (2014). Agricultural Household Models for Malawi: Household Heterogeneity, Market Characteristics, Agricultural Productivity, Input Subsidies, and Price Shocks. A Baseline Report. CLTS Working Paper No. 5/2014. Centre for Land Tenure Studies, Norwegian University of Life Sciences, Ås, Norway. Link

 

Holden, S. and Mangisoni, J. (2013). Input subsidies and improved maize varieties in Malawi: - What can we learn from the impacts in a drought year? CLTS Working Paper No. 7/2013. Centre for Land Tenure Studies, Norwegian University of Life Sciences, Ås, Norway. Link

 

Holden, S.(2013). Input subsidies and demand for improved maize: Relative prices and household heterogeneity matter! CLTS Working Paper No. 6/2013. Centre for Land Tenure Studies, Norwegian University of Life Sciences, Ås, Norway. Link

 

Holden, S.(2013). Amazing maize in Malawi: Input subsidies, factor productivity and land use intensification. CLTS Working Paper No. 4/2013. Centre for Land Tenure Studies, Norwegian University of Life Sciences, Ås, Norway. Link

 

My paper with Rodney Lunduka presented at the 28th International Conference of Agricultural Economists, The Global Bio-Economy at Iguassu Falls, Cataratas, Brazil, August 18-24, 2012: "Input Subsidies, Cash Constraints and Timing of Input Supply: -Experimental Evidence from Malawi" Paper

 

Holden, S. T. and Lunduka, R. (2013). Who Benefit from Malawi's Input Subsidy Program? Forum For Development Studies 40(1), 1-25. Link

 

Holden, S. T. and Lunduka, R. (2012). Do Fertilizer Subsidies Crowd Out Organic Manures? The Case of Malawi. Agricultural Economics 43, 301-312. Link

 

Our joint presentation at the AAEA Annual Meeting i Pittsburgh, Pennsylvania, 24-26.July 2011,

Can Agricultural Input Subsidies Foster an African Green Revolution? Insights from Malawi”. Link

 

Holden, S. T. and Lunduka, R. (2011). Do Fertilizer Subsidies Crowd Out Organic Manures? The Case of Malawi. Paper submitted for the EAERE conference in Rome, June 29-July 2, 2011. Abstract

 

Holden, S. T. and Lunduka, R. (2011). Cash Constraints and Sticky Input Expenditures: -Experimental Evidence from Malawi. Paper presented at the Annual Conference of Norwegian Economists at Handelshøgskolen, Bergen, January 5-7, 2011. Abstract

 

Holden, S. T. and Lunduka, R. (2010). The Political Economy of Targeted Input Subsidies in Malawi. Paper presented at the NFU conference, Oslo, 25-26.November, 2010.

 

Holden, S. T. and Lunduka, R. (2010). Too Poor to be Efficient? Impacts of the Targeted Fertilizer Subsidy Program in Malawi on Farm Plot Level Input Use, Crop Choice and Land Productivity. Report to NORAD. Department of Economics and Resource Management, Norwegian University of Life Sciences, Ås.

Link to paper. Link to blog briefs.

 

Holden, S. T. and Lunduka, R. (2010). Impacts of the fertilizer subsidy program in Malawi: Targeting, household perceptions and preferences. Report to NORAD. Department of Economics and Resource Management, Norwegian University of Life Sciences, Ås. Link to paper. Link to blog briefs.

 

Holden, S. T. and Lunduka, R. (2010). Yara, the Fertilizer Industry and the Impacts on Small Farmers in Malawi. Understanding the Issues 1/2010. Norwegian Church Aid, Lilongwe and Oslo. Link

 

Bezu, S. and Holden, S. T. (2008). Can Food-for-Work Encourage Agricultural Production? Food Policy 33(5): 541-549. Abstract

 

Earlier publications:

 

Holden, S., Lofgren, H. and Shiferaw, B.(2005). Economic Reforms and Soil Degradation in the Ethiopian Highlands: A Micro CGE Model with Transaction Costs. Paper presented at the ECOMOD conference, Istanbul. Link

 

Holden, S. and Lofgren, H. (2005). Assessing the Impacts of Natural Resource Management Policy Interventions with a Village General Equilibrium Model. In B. Shiferaw, H. Ade Freeman and S. Swinton (eds.), Natural Resource Management in Agriculture: Methods for Assessing Economic and Environmental Impacts. CABI Publishing, pp. 295-318. Book

 

Shiferaw, B. and Holden, S. T. (2000). Policy Instruments for Sustainable Land Management: The Case of Highland Smallholders in Ethiopia. Agricultural Economics 22: 217-232. Abstract

 

Holden, S. T., Taylor, J. E., and Hampton, S. (1998). Structural Adjustment and Market Imperfections: A Stylized Village Economy-Wide Model with Nonseparable Farm Households. Environment and Development Economics 4: 69-87. Abstract

 

Holden, S. T. (1997). Adjustment Policies, Peasant Household Resource Allocation, and Deforestation in Northern Zambia: Overview and Some Policy Conclusions. Forum for Development Studies 1: 117-134. Summary

 

Holden, S. T. and Shanmugaratnam, N. (1995). Structural Adjustment, Production Subsidies, and Sustainable Land Use. Forum For Development Studies 2, p.247-266. Summary

 

Holden, S. T. (1993). Peasant household modelling: Farming systems evolution and sustainability in northern Zambia. Agricultural Economics 9, 241-267. Abstract

 

Holden, S. T. (1993). The potential of agroforestry in the high rainfall areas of Zambia: A peasant programming model approach. Agroforestry Systems 24, 39-55. Abstract

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