Overview

Several sub-Saharan African countries have implemented large-scale fertilizer subsidy programs in an attempt to boost the productivity and food security of small farmers. With the recent global escalation in food prices, other countries in Africa and around the world are considering similar fertilizer subsidies. This is a key moment to quantify the short-term impacts such programs have on farm output, and also to investigate if there are ways to ensure that longer-term impacts endure after subsidies are phased out. Do farmers continue to invest in and utilize the improved technologies and the higher-yield inputs that were available to them under subsidies? The key to determining whether provision of subsidies leads to long-term growth, even after the subsidies are no longer in effect, is to discover if farmer practices change fundamentally or whether these practices change only in direct reaction to the availability of subsidies.

The recent implementation of a program that provides input support to smallholder farmers in rural Mozambique offers BASIS the opportunity to examine whether household wellbeing improves under subsidies, and if this improvement can be made sustainable. BASIS researchers implemented a field experiment among farmers in the program’s target regions to result in recommendations to help make this and similar programs more effective in improving household consumption over the long term, as well as revealing alternative approaches to subsidizing farmers that might prove more effective in improving farmer knowledge, practices and output. Importantly, the BASIS research also looks at whether providing farmers opportunities for savings plans through a local financial provider will help subsidies achieve a greater sustainable impact.