Smart Subsidy? : Welfare and Distributional Implications of Malawi’s FISP

It is often argued that subsidizing fertilizer and other inputs is desirable both to boost agricultural production and to help poor farmers. This analysis of Malawi’s huge Farmer Input Subsidy Program highlights a tension between these two objectives: The more FISP increases fertilizer use and the...

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Bibliographic Details
Main Author:	Jacoby, Hanan
Format:	Report
Language:	English en_US
Published:	World Bank, Washington, DC 2016
Subjects:	Farmer Input Subsidy Program FISP agricultural productivity poor farmers fertilizers income distribution
Online Access:	http://documents.worldbank.org/curated/en/2016/07/26595743/smart-subsidy-welfare-distributional-implications-malawi’s-fisp http://hdl.handle.net/10986/24946

id	okr-10986-24946
recordtype	oai_dc
spelling	okr-10986-249462021-05-25T08:50:54Z Smart Subsidy? : Welfare and Distributional Implications of Malawi’s FISP Jacoby, Hanan Farmer Input Subsidy Program FISP agricultural productivity poor farmers fertilizers income distribution It is often argued that subsidizing fertilizer and other inputs is desirable both to boost agricultural production and to help poor farmers. This analysis of Malawi’s huge Farmer Input Subsidy Program highlights a tension between these two objectives: The more FISP increases fertilizer use and thereby raises output, the greater the distortion and hence the lower the welfare gains from the program. Indeed, the empirical results indicate that up to 59% of every Kwacha spent on the FISP is wasted, in the sense that the fertilizer is not sufficiently valued by the beneficiaries. Cashing out the program is shown to have desirable distributional implications. 2016-08-25T19:47:48Z 2016-08-25T19:47:48Z 2016-06-01 Report http://documents.worldbank.org/curated/en/2016/07/26595743/smart-subsidy-welfare-distributional-implications-malawi’s-fisp http://hdl.handle.net/10986/24946 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Economic & Sector Work :: Other Agriculture Study Economic & Sector Work Africa Malawi
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	Farmer Input Subsidy Program FISP agricultural productivity poor farmers fertilizers income distribution
spellingShingle	Farmer Input Subsidy Program FISP agricultural productivity poor farmers fertilizers income distribution Jacoby, Hanan Smart Subsidy? : Welfare and Distributional Implications of Malawi’s FISP
geographic_facet	Africa Malawi
description	It is often argued that subsidizing fertilizer and other inputs is desirable both to boost agricultural production and to help poor farmers. This analysis of Malawi’s huge Farmer Input Subsidy Program highlights a tension between these two objectives: The more FISP increases fertilizer use and thereby raises output, the greater the distortion and hence the lower the welfare gains from the program. Indeed, the empirical results indicate that up to 59% of every Kwacha spent on the FISP is wasted, in the sense that the fertilizer is not sufficiently valued by the beneficiaries. Cashing out the program is shown to have desirable distributional implications.
format	Report
author	Jacoby, Hanan
author_facet	Jacoby, Hanan
author_sort	Jacoby, Hanan
title	Smart Subsidy? : Welfare and Distributional Implications of Malawi’s FISP
title_short	Smart Subsidy? : Welfare and Distributional Implications of Malawi’s FISP
title_full	Smart Subsidy? : Welfare and Distributional Implications of Malawi’s FISP
title_fullStr	Smart Subsidy? : Welfare and Distributional Implications of Malawi’s FISP
title_full_unstemmed	Smart Subsidy? : Welfare and Distributional Implications of Malawi’s FISP
title_sort	smart subsidy? : welfare and distributional implications of malawi’s fisp
publisher	World Bank, Washington, DC
publishDate	2016
url	http://documents.worldbank.org/curated/en/2016/07/26595743/smart-subsidy-welfare-distributional-implications-malawi’s-fisp http://hdl.handle.net/10986/24946
_version_	1764457960151449600

Smart Subsidy? : Welfare and Distributional Implications of Malawi’s FISP

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