INPUT SUBSIDIES AND THEIR EFFECT ON CROPLAND ALLOCATION, AGRICULTURAL PRODUCTIVITY, AND CHILD NUTRITION: EVIDENCE FROM MALAWI

Governments in sub-Saharan Africa have introduced a new brand of agricultural input subsidies which has led to their resurgent interest. This dissertation is composed of three essays evaluating the effects of Malawi's Farm Input Subsidy Program on cropland allocation decisions, agricultural productivity, and child nutrition. Essay 1 explores the impact of input subsidies on cropland allocation decisions among rural farm households in Malawi using the nationally-representative Third Integrated Household Survey. To control for the possible endogeneity of program participation, an instrumental variable approach is employed. The results indicate that program participation leads to a substantial decrease in the share of land allocated to maize, which suggests intensification in the production of maize. Participation also leads to an increase in the share of land allocated to tobacco and legumes, which suggests a shift toward the production of cash crops and greater cultivation of secondary intercrops. In addition, participation is associated with increased agricultural productivity. Essay 2 investigates whether there are gendered gains in agricultural productivity from participating in the subsidy program and evaluates the effects at each decile of the productivity distribution. The findings suggest that male farmers benefit from participation with those at the lower end of the productivity distribution incurring the largest gains. However, female farmers do not achieve productivity gains from participation which suggests that they face additional constraints to productivity apart from non-labor input use. Essay 3 investigates the effects of input subsidies on child nutrition and determines whether the effects on nutrition are transmitted via generic effects or specific effects. The traditional approach used to address early childhood nutrition has been through social protection programs. While there is a large literature evaluating their role in early childhood nutrition, little research has been done evaluating the role of agricultural interventions. The evidence points to improved nutritional status of preschool children in rural settings. However, the evidence shows that participation in the input subsidy program is associated with greater non-food consumption rather than food expenditures. This suggests that the input subsidy program increases household incomes and improves nutrition through means other than direct food consumption.