Authors
Naresh Kumar, Rolly Kapoor, Shilpa Aggarwal, Dahyeon Jeong, David Sungho Park, Jonathan Robinson, Alan Spearot
Publication date
2023/9/25
Issue
w31704
Publisher
National Bureau of Economic Research
Description
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.
Total citations
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