Over the last decade, subsidies for fertilizer and hybrid maize seed have re‐emerged as a cornerstone of the Government of the Republic of Zambia's (GRZ's) agricultural development and poverty reduction strategies. This article reviews the Farmer Input Support Programme (FISP) and other GRZ input subsidy programs since structural adjustment. It then synthesizes existing and presents new empirical evidence on the programs’ targeting outcomes and effects. Results suggest that although 73% of smallholder households cultivate less than 2 hectares of land, and that these households constitute 78% of the smallholder farms below the US$1.25/capita/day poverty line, the majority (55%) of FISP fertilizer goes to households that cultivate larger areas. Other factors constant, wealthier households receive more subsidized inputs. Subsidized fertilizer promotes maize intensification and extensification (at the expense of fallow land), but an additional kg of subsidized fertilizer only raises maize output by 1.88 kg on average. As a result of low maize–fertilizer response rates, poor targeting, crowding out, and diversion of fertilizer intended for the program, financial benefit–cost ratios for FISP fertilizer are well below one. The article concludes with recommended reforms to FISP, including that it be downsized and the savings invested in known drivers of pro‐poor agricultural growth.
<p>Zambia, and in particular Eastern Province, has one of the highest levels of malnutrition in the world with 40% of the children having stunted growth. Agricultural diversification and commercialization remain critical for improving the nutrition status of children. However, the impact may vary according to the level of the two agricultural interventions. Results from the dose response function using generalised propensity score method showed that for commercialization, there is highest risk of stunting at medium commercialization levels at 50%. A farm at this point can improve nutrition status by moving either towards high or towards zero levels. Commercialization has a negative effect on short-term nutrition outcomes leading to underweight and wasting. This could indicate that in areas with less everyday access to a range of food items, capital accumulation may not help to avoid deficiencies in child nutrition. In combination with our findings on diversification, two policy options can be recommended. Either the households specialize in cash crops to increase income, or they go into subsistence farming with high levels of diversification. Other off-farm income sources are suggested for resilience in case of yield shocks.<strong></strong></p>
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