IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v97y2017icp251-265.html
   My bibliography  Save this article

Productivity and Welfare Effects of Nigeria's e-Voucher-Based Input Subsidy Program

Author

Listed:
  • Wossen, Tesfamicheal
  • Abdoulaye, Tahirou
  • Alene, Arega
  • Feleke, Shiferaw
  • Ricker-Gilbert, Jacob
  • Manyong, Victor
  • Awotide, Bola Amoke

Abstract

In an attempt to go beyond the so called “smart” subsidies, Nigeria has embarked on a potentially innovative mobile phone-based input subsidy program that provides fertilizer and improved seed subsidies through electronic vouchers. In this article, we examined the productivity and welfare effects of the program using household-level data from rural Nigeria. The article employed instrumental variable regression approach to control for the potential endogeneity of the input subsidy program. Our results suggest that the program is effective in improving productivity and welfare outcomes of beneficiary smallholders. The size of the estimated effects suggests a large improvement in productivity and welfare outcomes. Moreover, the distributional effects of the program suggest no heterogeneity effects based on gender and farm land size. These results are robust to using alternative measurements of program participation. The benefit–cost ratio of 1.11 suggests that the program is marginally cost-effective. Overall, our results suggest that while improving average productivity is a good outcome for improving food security, improving the distributional outcome of the program by targeting the most disadvantaged groups would maximize the program’s contribution to food security and poverty reduction.

Suggested Citation

  • Wossen, Tesfamicheal & Abdoulaye, Tahirou & Alene, Arega & Feleke, Shiferaw & Ricker-Gilbert, Jacob & Manyong, Victor & Awotide, Bola Amoke, 2017. "Productivity and Welfare Effects of Nigeria's e-Voucher-Based Input Subsidy Program," World Development, Elsevier, vol. 97(C), pages 251-265.
    • Handle: RePEc:eee:wdevel:v:97:y:2017:i:c:p:251-265
    DOI: 10.1016/j.worlddev.2017.04.021
    as

    Download full text from publisher

    File URL: https://www.sciencedirect.com/science/article/pii/S0305750X17301328
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2017.04.021?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    2. T.S. Jayne & David Mather & Nicole Mason & Jacob Ricker-Gilbert, 2013. "How do fertilizer subsidy programs affect total fertilizer use in sub-Saharan Africa? Crowding out, diversion, and benefit/cost assessments," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 687-703, November.
    3. Chibwana, Christopher & Fisher, Monica & Shively, Gerald, 2012. "Cropland Allocation Effects of Agricultural Input Subsidies in Malawi," World Development, Elsevier, vol. 40(1), pages 124-133.
    4. Jacob Ricker-Gilbert, 2014. "Wage and employment effects of Malawi's fertilizer subsidy program," Agricultural Economics, International Association of Agricultural Economists, vol. 45(3), pages 337-353, May.
    5. Lenis Saweda O. Liverpool-Tasie & Hiroyuki Takeshima, 2013. "Input promotion within a complex subsector: fertilizer in Nigeria," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 581-594, November.
    6. Tesfamicheal Wossen & Thomas Berger & Salvatore Di Falco, 2015. "Social capital, risk preference and adoption of improved farm land management practices in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 46(1), pages 81-97, January.
    7. Nicole M. Mason & Thomas S. Jayne, 2014. "Fertiliser subsidies and smallholder commercial fertiliser purchases: crowding out, leakage, and policy implications for Zambia," Journal of Agricultural Economics, Wiley Blackwell, vol. 65(2), pages 527-528, June.
    8. Ricker-Gilbert, Jacob E. & Mason, Nicole M. & Jayne, Thomas S. & Darko, Francis Addeah & Tembo, Solomon, 2013. "What are the effects of input subsidy programs on equilibrium maize prices? Evidence from Malawi and Zambia," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149259, Agricultural and Applied Economics Association.
    9. Wooldridge, Jeffrey M., 2007. "Inverse probability weighted estimation for general missing data problems," Journal of Econometrics, Elsevier, vol. 141(2), pages 1281-1301, December.
    10. Mason, Nicole M. & Ricker-Gilbert, Jacob, 2013. "Disrupting Demand for Commercial Seed: Input Subsidies in Malawi and Zambia," World Development, Elsevier, vol. 45(C), pages 75-91.
    11. Christopher S. McIntosh & Jeffrey H. Dorfman, 1992. "Qualitative Forecast Evaluation: A Comparison of Two Performance Measures," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(1), pages 209-214.
    12. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    13. Jacob Ricker-Gilbert & Nicole M. Mason & Francis A. Darko & Solomon T. Tembo, 2013. "What are the effects of input subsidy programs on maize prices? Evidence from Malawi and Zambia," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 671-686, November.
    14. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    15. T.S. Jayne & Shahidur Rashid, 2013. "Input subsidy programs in sub-Saharan Africa: a synthesis of recent evidence," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 547-562, November.
    16. Jacob Ricker-Gilbert & Thomas Jayne & Gerald Shively, 2013. "Addressing the 'Wicked Problem' of Input Subsidy Programs in Africa," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 35(2), pages 322-340.
    17. Chirwa, Ephraim & Dorward, Andrew, 2013. "Agricultural Input Subsidies: The Recent Malawi Experience," OUP Catalogue, Oxford University Press, number 9780199683529.
    18. Bola Amoke Awotide & Aziz Karimov & Aliou Diagne & Tebila Nakelse, 2013. "The impact of seed vouchers on poverty reduction among smallholder rice farmers in Nigeria," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 647-658, November.
    19. Lunduka, Rodney & Fisher, Monica & Snapp, Sieglinde, 2012. "Could farmer interest in a diversity of seed attributes explain adoption plateaus for modern maize varieties in Malawi?," Food Policy, Elsevier, vol. 37(5), pages 504-510.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mason, Nicole & Tembo, Solomon, 2015. "Do input Subsidies Reduce Poverty among Smallholder Farm Households? Panel Survey Evidence from Zambia," 2015 Conference, August 9-14, 2015, Milan, Italy 212233, International Association of Agricultural Economists.
    2. Mason, Nicole M. & Tembo, Solomon T., 2014. "Do input subsidies reduce poverty among smallholder farm households? Evidence from Zambia," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170617, Agricultural and Applied Economics Association.
    3. Mason, Nicole M. & Tembo, Solomon T., 2015. "Do Input Subsidy Programs Raise Incomes and Reduce Poverty among Smallholder Farm Households? Evidence from Zambia," Food Security Collaborative Working Papers 198702, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. Jayne, T.S. & Mason, Nicole M. & Burke, William J. & Ariga, Joshua, 2016. "Agricultural Input Subsidy Programs in Africa: An Assessment of Recent Evidence," Food Security International Development Working Papers 245892, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    5. Nicole M. Mason & Ayala Wineman & Lilian Kirimi & David Mather, 2017. "The Effects of Kenya's ‘Smarter’ Input Subsidy Programme on Smallholder Behaviour and Incomes: Do Different Quasi-experimental Approaches Lead to the Same Conclusions?," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(1), pages 45-69, February.
    6. Jayne, Thomas S. & Mason, Nicole M. & Burke, William J. & Ariga, Joshua, 2018. "Review: Taking stock of Africa’s second-generation agricultural input subsidy programs," Food Policy, Elsevier, vol. 75(C), pages 1-14.
    7. Nicole M. Mason & Thomas S. Jayne & Nicolas van de Walle, 2017. "The Political Economy of Fertilizer Subsidy Programs in Africa: Evidence from Zambia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(3), pages 705-731.
    8. Fujimoto, Takefumi & Suzuki, Aya, 2021. "Do Fertilizer and Seed Subsidies Strengthen Farmers' Market Participation? the Impact of Tanzania NAIVS on Farmers' Purchase of Agricultural Inputs and Their Maize-Selling Activities," 2021 Conference, August 17-31, 2021, Virtual 315044, International Association of Agricultural Economists.
    9. Nicole M. Mason & Ayala Wineman & Solomon T. Tembo, 2020. "Reducing poverty by ‘ignoring the experts’? Evidence on input subsidies in Zambia," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(5), pages 1157-1172, October.
    10. Mason, Nicole M. & Wineman, Ayala & Kirimi, Lilian & Mather, David, 2016. "The Effects of Kenya’s ‘Smarter’ Input Subsidy Program on Smallholder Behavior and Incomes: Do Different Quasi-Experimental Approaches Lead to the Same Conclusions?," Food Security Collaborative Working Papers 232090, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    11. Saenz, Mariana & Thompson, Eric, 2017. "Gender and Policy Roles in Farm Household Diversification in Zambia," World Development, Elsevier, vol. 89(C), pages 152-169.
    12. Houssou, Nazaire & Andam, Kwaw S. & Collins, Asante-Addo, 2017. "Can better targeting improve the effectiveness of Ghana's Fertilizer Subsidy Program? Lessons from Ghana and other countries in Africa south of the Sahara," IFPRI discussion papers 1605, International Food Policy Research Institute (IFPRI).
    13. Holden, Stein T., 2018. "The Economics of Fertilizer Subsidies," CLTS Working Papers 9/18, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 16 Oct 2019.
    14. Harou, Aurélie P., 2018. "Unraveling the effect of targeted input subsidies on dietary diversity in household consumption and child nutrition: The case of Malawi," World Development, Elsevier, vol. 106(C), pages 124-135.
    15. Takeshima, Hiroyuki & Liverpool-Tasie, Lenis Saweda O., 2015. "Fertilizer subsidies, political influence and local food prices in sub-Saharan Africa: Evidence from Nigeria," Food Policy, Elsevier, vol. 54(C), pages 11-24.
    16. Sylvester Amoako Agyemang & Tomáš Ratinger & Miroslava Bavorová, 2022. "The Impact of Agricultural Input Subsidy on Productivity: The Case of Ghana," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(3), pages 1460-1485, June.
    17. Ricker-Gilbert, Jacob & Jones, Michael, 2015. "Does storage technology affect adoption of improved maize varieties in Africa? Insights from Malawi’s input subsidy program," Food Policy, Elsevier, vol. 50(C), pages 92-105.
    18. Jongwoo Kim & Nicole M. Mason & David Mather & Felicia Wu, 2021. "The effects of the national agricultural input voucher scheme (NAIVS) on sustainable intensification of maize production in Tanzania," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(3), pages 857-877, September.
    19. Zinnbauer, Maximilian & Mockshell, Jonathan & Zeller, Manfred, 2018. "Effects if Fertilizer Subsidies in Zambia: A Literature Review," MPRA Paper 84125, University Library of Munich, Germany.
    20. Sinafikeh Asrat Gemessa, 2022. "An alternative approach to measuring the welfare implications of input subsidies: Evidence from Malawi," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(1), pages 112-138, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:97:y:2017:i:c:p:251-265. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.