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Do fertilizer subsidies crowd out organic manures? The case of Malawi
Author(s) -
Holden Stein,
Lunduka Rodney
Publication year - 2012
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.2012.00584.x
Subject(s) - manure , fertilizer , subsidy , tobit model , endogeneity , probit , agriculture , agricultural science , environmental science , agronomy , intensity (physics) , economics , agricultural economics , mathematics , econometrics , biology , ecology , physics , quantum mechanics , market economy
We assess the impacts of the Malawian Farm Input Subsidy Program on manure use at the farm plot level using more than 3,000 farm plot observations from six districts in central and southern Malawi over three years (2006, 2007, and 2009). The probabilities and intensities of manure use were investigated with the correlated random effects (CRE) probit and tobit models. The endogeneity of access to fertilizer subsidies and fertilizer use intensity was controlled for with a control function approach. Both the probability of manure use and intensity of manure use were positively correlated with the intensity of fertilizer use. A 1% increase in fertilizer use intensity is associated with a 1.94%–1.96% increase in the intensity of manure use outside the subsidy program and a 0.62%–1.66% increase in manure use with the subsidy program. A 1% increase in average fertilizer price was associated with a 0.43%–0.76% increase in the probability of manure use and a 3.5%–5.3% increase in the intensity of manure use.