Department of Agricultural, Food, and Resource Economics Food Security Group

Over a decade ago, the Malian government launched a fertilizer subsidy program to expand fertilizer use, boost productivity, and ultimately, improve food and nutrition security. The program specifically targets key crops in the socio-economic development of Mali: rice, cotton, maize, millet, and sorghum. All farmers of target crops are eligible to obtain subsidized fertilizer at a quantity proportional to the number of hectares they expect to plant to those crops. Subsidy rates differ by crop. We hypothesize that the fertilizer subsidy in Mali changes the agricultural landscape by distorting the incentives to allocate land both among target crops and between target and non-target crops, with unintended consequences for crop diversification. We apply two econometric strategies to a farm household dataset collected in 2017/18 in the most productive agricultural zones of Mali and test the effects of the fertilizer subsidy program on indicators of crop species diversity. Findings from propensity score analysis and control function approaches reveal that the fertilizer subsidy program incites households to allocate more of their land to target crops, resulting in a greater concentration of area in target crops and reduced evenness of the area distribution among them. These findings raise concerns about how best to achieve food and nutrition security, when a costly program such as this favors a non-food crop (cotton) and starchy staples over other nutrient-dense or high value crops. The environmental sustainability of a program that reduces crop species diversity in an agricultural landscape is also questionable.