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Input Subsidies, Cash Constraints, and Timing of Input Supply
Author(s) -
Holden Stein T.,
Lunduka Rodney W.
Publication year - 2014
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aat059
Subject(s) - subsidy , cash , fertilizer , economics , agricultural economics , willingness to pay , shadow price , distribution (mathematics) , preference , econometrics , microeconomics , finance , mathematics , agronomy , market economy , mathematical optimization , mathematical analysis , biology
Is low input use by poor, smallholder farmers caused by time‐inconsistent behavior or by limited ability to buy inputs? Are input subsidies the best solution to stimulate input demand or are there smarter solutions? These issues are investigated by combining survey data, stated preference questions, and randomized experiments in Malawi. The demand for fertilizer at harvest time and at planting time, farm gate shadow prices for fertilizer, and the gap between the willingness‐to‐accept (WTA) and willingness‐to‐pay (WTP) prices for a standard input package were investigated. Significant effects of timing and of cash constraints were found, suggesting the possibility that smarter designs exist, such as distribution of smaller packages from harvest time to planting time.