Bethuel Kinuthia on input subsidy schemes and agricultural productivity in Tanzania

Bethuel Kinuthia gave a presentation on 13 May 2020, as part of the Sustainable development solutions for Tanzania – strengthening research to achieve SDGs project. The presentation was held as a webinar.

Abstract - The impact of input subsidy schemes on agriculture productivity and welfare in Tanzania

This paper examines the impact of government input subsidies on farmers’ agricultural production and welfare. In particular, the paper focuses on the 2009 Tanzanian government reform program titled National Agricultural Input Voucher Scheme (NAIVS) that was aimed at addressing food crisis and rising food prices.

NAIVS provided fertilizer and seed subsidies to poor farmers growing on maize and rice with the objective of boosting production. Further, the program thrived on political goodwill of the government and parliament and was largely private sector friendly.

The analysis is based on the Living Standards Measurement Study-Integrated Surveys on Agriculture (LSMS-ISA) for the period 2008-2014 and uses difference in difference and propensity score matching methods. The results show that the input subsidy program had an effect on maize and rice production in the short run and maize in the long run.

However, the program did not affect farmers’ welfare. In addition, the use of extension services did not have much effect on the farmers who got the input vouchers. The results show that this programme partly achieved the expected outcomes in Tanzania.

About the speaker

Bethuel Kinyanjui Kinuthia is a senior lecturer in the University of Nairobi, School of Economics. Apart from teaching, he does research on economic development in developing countries. Currently, his projects are related to microeconomics in trade and labour dynamics, agriculture dynamics, cash transfer programmes, financial inclusion and inequality in East Africa and South East Asia. He has a PhD from Leiden University in the Netherlands and MA and BA in Economics from the University of Nairobi, Kenya.