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It is often argued that subsidizing fertilizer and other inputs is desirable both to boost agricultural production and to help poor farmers. This analysis of Malawi's huge Farmer Input Subsidy Program highlights a tension between these two objectives: The more FISP increases fertilizer use and thereby raises output, the greater the distortion and hence the lower the welfare gains from the program. Indeed, the empirical results indicate that up to 59% of every Kwacha spent on the FISP is wasted, in the sense that the fertilizer is not sufficiently valued by the beneficiaries. Cashing out the program is shown to have desirable distributional implications.

Agricultural Productivity --- Agricultural Sector Economics --- Agriculture --- Analysis of Economic Growth --- Development Patterns and Poverty --- Economic Management --- Fertilizers --- Income Distribution --- Inequality --- Macroeconomics and Economic Growth --- Poverty Reduction --- Public Expenditure, Financial Management and Procurement --- Public Sector Governance --- Rural Development --- Rural Policies and Institutions --- Taxation & Subsidies

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Zonder onderwerpscode: wereldeconomie, ontwikkelingsproblematiek

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This paper considers the welfare and distributional consequences of higher relative food prices in rural India through the lens of a specific-factors, general equilibrium, trade model applied at the district level. The evidence shows that nominal wages for manual labor both within and outside agriculture respond elastically to increases in producer prices; that is, wages rose faster in rural districts growing more of those crops with large price run-ups over 2004-09. Accounting for such wage gains, the analysis finds that rural households across the income spectrum benefit from higher agricultural commodity prices. Indeed, rural wage adjustment appears to play a much greater role in protecting the welfare of the poor than the Public Distribution System, India's giant food-rationing scheme. Moreover, policies, like agricultural export bans, which insulate producers (as well as consumers) from international price increases, are particularly harmful to the poor of rural India. Conventional welfare analyses that assume fixed wages and focus on households' net sales position lead to radically different conclusions.

Agribusiness --- Agriculture --- Economic Theory & Research --- Emerging Markets --- General Equilibrium --- Labor Policies --- Markets and Market Access --- Rural Development --- Specific-factors Model --- Trade

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School enrollment --- Malnutrition in children --- Children with social disabilities --- Economic development --- Educational surveys --- Child Nutrition Disorders. --- Economic aspects --- Education (Elementary) --- Effect of education on. --- Effect of education on

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Zonder onderwerpscode: wereldeconomie, ontwikkelingsproblematiek