Working Paper: NBER ID: w31704
Authors: Naresh Kumar; Rolly Kapoor; Shilpa Aggarwal; Dahyeon Jeong; David Sungho Park; Jonathan Robinson; Alan Spearot
Abstract: Many countries subsidize agricultural inputs but require farmers to travel to retailers to access inputs, just as for normal purchases. What effect do travel costs have on subsidy take-up and input usage, particularly for remote farmers? We analyze Malawi's Farm Input Subsidy Program (FISP), and show that travel-cost-adjusted prices are substantially higher in remote areas. However, subsidy redemption is nearly universal. We make use of a policy change in 2017-19 which took centralized control of beneficiary selection and find that FISP eliminates the sizeable remoteness gradient that exists for non-beneficiaries. Our results demonstrate that subsidy programs may narrow spatial inequities.
Keywords: No keywords provided
JEL Codes: O12; O13; Q12; Q16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| remoteness (R39) | subsidy redemption (H23) |
| remoteness (R39) | input usage (C67) |
| remoteness (R39) | input usage (non-beneficiaries) (H53) |
| FISP program (F53) | remoteness gradient in fertilizer usage (R12) |
| FISP program (F53) | equalizing access across different regions (I24) |