Department of Agricultural, Food, and Resource Economics Feed the Future Innovation Lab for Food Security Policy

Thomas S. Jayne, Nicole M. Mason, William J. Burke, and Joshua Ariga. 2016. Agricultural Input Subsidy Programs in Africa: An Assessment of Recent Evidence. Feed the Future Innovation Lab for Food Security Policy Research Paper 29. East Lansing: Michigan State University

EXECUTIVE SUMMARY
This study reviews the evidence regarding the recent wave of smart input subsidy programs in Africa and identifies components of a holistic and sustainable agricultural productivity growth strategy that could improve the contribution of input subsidy programs to African governments’ national development objectives.

African governments’ commitment after the Abuja African Fertilizer Summit (2006) to increase fertilizer use from 8 to 50 kg of nutrients per hectare by 2015 reinforces the importance of inorganic fertilizer for increasing crop productivity and attaining food security in Africa. The impacts of achieving this target, however, will depend greatly on the agronomic efficiency of applied fertilizer. Many African governments’ efforts to raise agricultural productivity have focused on programs to increase fertilizer use. Relatively little effort has been made in recent decades to help African farmers raise the efficiency with which they use fertilizer.

Over the past decade, targeted input subsidy programs have constituted the main tool by which many African governments have sought to raise fertilizer use; in many countries, these programs have become the centerpiece of state agricultural development and food security strategies. While they have produced important benefits on national food production and food security, these impacts have been attenuated by generally low crop response to fertilizer use and to implementation features that depress the programs’ contribution to overall fertilizer use. These limitations in turn have diminished the subsidy programs’ contribution to poverty reduction and sustainable agricultural productivity growth. Low crop response to fertilizer has also impeded the growth of commercial demand for fertilizer in Africa. There is strong evidence that farmers will demand more fertilizer when they are able to obtain higher crop response to fertilizer and therefore make its use more profitable.

A more holistic strategy for raising smallholder crop productivity – focusing on sustainably raising the efficiency of fertilizer use as well as the quantity of fertilizer used – will more effectively achieve the region’s agricultural, food security, and poverty reduction objectives. Such a holistic strategy may include input subsidy programs, especially if they are implemented according to smart subsidy criteria, which has often proven difficult. Other and probably more important components of a holistic agricultural productivity strategy will include greater public investment in coordinated systems of agricultural research, development, and extension that emphasize bi-directional learning between farmers of varying resource constraints and agro-ecologies, extension workers, researchers, and agro-dealers. The agricultural systems of Africa are undergoing rapid change with regard to population densities, land scarcity, relative factor abundance and prices, land degradation, climate variability, and new technologies. Because African farming systems are dynamic, yesterday’s best agronomic and crop management practices are unlikely to be suitable for today. Existing public agricultural research, development, and extension systems are profoundly under-resourced, often demoralized, and in a de facto sense, sometimes defunct. Effective agricultural science and extension programs are necessary to interactively work with farmers to identify new best practices to maintain and increase crop productivity in the face of these dynamic changes in the economic and biophysical environments. Moreover, because of substantial micro-level variation in these environments, effective crop science and extension systems must be localized to properly tailor agronomic best practices to heterogeneous environments.

While African governments’ efforts to raise fertilizer use are laudable, expenditures on input subsidy programs in most cases appear to produce substantially less impact on national development objectives than their potential. The gap between existing and realistically achievable impacts reflects both informational/knowledge barriers and political economy barriers. While the contribution of input subsidy programs (and fertilizer use in general) to sustainable growth could be much greater with strong and sustained government commitment to complementary public goods investments as well as to government redesign of certain aspects of subsidy programs, it is necessary to take a hard country-by-country assessment of the feasibility of achieving these outcomes in the foreseeable future.