The Economywide Impacts and Risks of Malawi鈥檚 Farm Input Subsidy Programme

Malawi鈥檚 programme potentially generates double dividends through higher and more drought-resilient yields

From:
Foreign, Commonwealth & Development Office
Published
1 January 2014
Country:
Malawi
Document Type:
Working Paper
Theme:
Agriculture and Economic Growth
First published:
1 January 2014
Authors:
Thurlow, J., Arndt, C. and Pauw, K.

Abstract

We estimate the impact of Malawi鈥檚 Farm Input Subsidy Programme using an economywide approach. We find potentially substantial net benefits with indirect benefits accounting for about two-fifths of total benefits. Due to these indirect benefits, the cut-off at which lower fertilizer yield response rates lead to net programme losses is much lower than the value suggested by existing partial equilibrium evaluations. Benefits decline with domestic financing and real fertilizer price increases. Abstracting from extreme events, Malawi鈥檚 programme potentially generates double dividends through higher and more drought-resilient yields. Overall, our results buttress arguments for patience and a focus on programme efficiency improvements.

Citation

Arndt, C.; Pauw, K.; Thurlow, J. The Economywide Impacts and Risks of Malawi鈥檚 Farm Input Subsidy Programme. UNU-WIDER, Helsinki, Finland (2014) 23 pp. [WIDER Working Paper No. 2014/099]

Updates to this page

Published 1 January 2014
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