The Economywide Impacts and Risks of Malawi's Farm Input Subsidy Programme

UNU-WIDER 07/2014; WP/2014/099

Posted: 26 Nov 2014

See all articles by Channing Arndt

Channing Arndt

United Nations - World Institute for Development Economics Research (UNU/WIDER)

Karl Pauw

International Food Policy Research Institute (IFPRI)

James Thurlow

UNU-WIDER; International Food Policy Research Institute (IFPRI)

Date Written: July 2014

Abstract

We estimate the impact of Malawi’s 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’s 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.

Suggested Citation

Arndt, Channing and Pauw, Karl and Thurlow, James, The Economywide Impacts and Risks of Malawi's Farm Input Subsidy Programme (July 2014). UNU-WIDER 07/2014; WP/2014/099, Available at SSRN: https://ssrn.com/abstract=2530886

Channing Arndt (Contact Author)

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6 B
Helsinki, FI‐00160
Finland

Karl Pauw

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

James Thurlow

UNU-WIDER ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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