Measuring the Impacts of Malawis Farm Inputs Subsidy Program

Christopher Chibwana1, Monica Fisher1, Charles Jumbe2, and Gerald Shively3

Abstract We measure the impacts of Malawis 2009 Farm Inputs Subsidy Program (FISP) on fertilizer use and maize yields in central and southern Malawi. Using three rounds of panel data and instrumental variables regression strategies to control for endogenous selection into the subsidy program we find positive and statistically significant correlations between participation in the FISP and fertilizer use intensity. Fertilizer use is found to be higher among households that plant improved maize varieties than among those that plant traditional varieties. Results are broadly robust to the inclusion of previous fertilizer intensity to control for household-specific differences in fertilizer use. We combine these results with those from a maize production function to calculate program-generated changes in average maize availability, accounting for estimated subsidy-induced changes in crop area. We find that farmers who received coupons for seed and fertilizer under the FISP obtained higher yields than those who did not receive any coupon. Our findings have implications for the way input subsidy programs are designed and implemented.

International Food Policy Research Institute, P.O. Box 31666, Lilongwe 3, Malawi Center for Agricultural Research and Development, Bunda College of Agriculture, P.O. Box 219, Lilongwe, Malawi 3 Department of Agricultural Economics, Purdue University, West Lafayette, IN USA