This Campbell systematic review examines the effects of input subsidies on agricultural productivity, beneficiary incomes and welfare, consumer welfare and wider economic growth. The review summarizes evidence from 15 experimental and quasi‐experimental studies and 16 studies that use computable models, the majority concerning sub‐Saharan Africa.
This review examines studies that evaluate the impact of agricultural input subsidies, including subsidies for agricultural machinery, seeds or fertilisers, on farmers, farm households, wage labourers or food consumers in low‐ or lower‐ middle‐income countries. It includes 15 experimental and quasi‐experimental studies and 16 simulation modelling studies. The majority relate to sub‐Saharan Africa (15 to Malawi) and to subsidised fertilizers and seeds.
Fertiliser and seed subsidies are associated with increased use of these inputs, higher agricultural yields and increased income among farm households, but evidence of their effects on poverty is limited. There is much evidence that subsidy schemes are prone to inefficiency, bias and corruption. Models show that introducing or increasing subsidies generally results in positive effects for consumers and wider economic growth. However, the models indicate that the way subsidies are funded, world input prices and beneficiary targeting all have important influences on predicted outcomes. The authors were not able to find any studies examining subsidies for machinery.
Plain language summary
Agricultural input subsidies raise input use, yields and farm income.
The review in briefAgricultural input subsidies raise input use, yields and farm income, but the evidence base is small and comes from a limited number of schemes and countries.
What is this review about?Greater use of improved seeds and inorganic fertilisers, and increased mechanisation, could boost agricultural productivity in some low‐ or lower‐middle‐income countries, but there is disagreement about whether subsidising these inputs is an effective way to stimulate their use.This review examines the evidence for impacts of input subsidies on agricultural productivity, beneficiary incomes and welfare, consumer welfare and wider economic growth.
What are the main findings of this review?What studies are included?This review examines studies that evaluate the impact of agricultural input subsidies, including subsidies for agricultural machinery, seeds or fertilisers, on farmers, farm households, wage labourers or food consumers in low‐ or lower‐ middle‐income countries. It includes 15 experimental and quasi‐experimental studies and 16 simulation modelling studies. The majority relate to sub‐Saharan Africa (15 to Malawi) and to subsidised fertilizers and seeds.What are the main results of this review?Fertiliser and seed subsidies are associated with increased use of these inputs, higher agricultural yields and increased income among farm households, but evidence of their effects on poverty is limited. There is much evidence that subsidy schemes are prone to inefficiency, bia...