In a previous post I wrote about the potential significance of new “smart subsidies” for agricultural inputs in Sub-Saharan Africa. Zambia, Tanzania, and Malawi have initiated such programs to help populations of small farmers acquire mineral fertilizer and hybrid seed at a lower cost. One key objective is to increase staple cereal yields from these farms, with consequent improvement to household and national food security.
The policy question I posed in my last post was if and how these efforts to raise productivity could become a recurring, effective, domestic and international strategy to address chronic and acute food security in many sectors of the developing world. We now have evidence to help answer that question.
From new research on the Malawi small farmer input subsidy program and child stunting and wasting, this post describes results and implications.
Our recent work establishes that Malawi’s subsidy program – which began in 2006 and is now entering its tenth year – has substantively improved health outcomes for Malawian children. The research is part of an ongoing collaboration between the University of Illinois and the University of Vermont’s Gund Institute for Ecological Economics.
One key dimension of this research is how it relates new data on variable subsidy allocation rates to different parts of Malawi over time to measures of child height and weight for more than 30,000 children born between 1995 and 2011. Height and weight growth measures are widely used to assess early childhood development; these measures have also proved to be strong predictors of education and health outcomes later in life. (The 2013 article “Adult consequences of growth failure in early childhood” provides a good summary of work on child anthropometrics and later life outcomes).
The intuition behind the study is as follows. First, different rural regions of Malawi received different levels of subsidy (measured in discount vouchers for fertilizer and hybrid seed) over significant spans of time. Second, children born after the start of the subsidy program (post-2005) should show benefits (if they exist), while children born before the program’s inception should not. We use the spatial variation in amounts of allocation and the temporal variation in when children were born to test for the program’s effects. We link data on sub-district subsidy allocation amounts to more than 30,000 geo-referenced observations of children born in rural Malawi between 1995 and 2010.
We find strong positive effects of Malawi’s farm subsidy program on child heights. Our estimates suggest that each one-unit increase in the per household voucher allocation rate (equivalent to allocating one additional bag of mineral fertilizer to every household) is associated with an increase of approximately 0.17 standard deviations in children’s height-for-age z-score, and a 5 percent decrease in a child’s likelihood of being stunted. We find a 9 percent increase, on average, in children’s height-for-age z-scores attributable to the subsidy program. Effects are robust to the inclusion of Traditional Authority fixed effects, birth year cohort controls, and a range of administrative and child and household controls.
Our explanation of the mechanism subtending this effect is that households receiving the subsidies are increasing the supply of maize that they use for self-provisioning. Given that only 20 percent of Malawian farm households reported selling maize in markets (according to representative national surveys conducted in 2005 and 2010), and that research published in 2013 found that 66 percent of Malawian small farm households ran out of maize from their own production before the next harvest, we expect that subsidies have shortened the hunger season – when household stocks of maize run low – for some rural households. The less food a household must purchase during the season when prices are at their highest, the more money a household retains for other expenses, including non-maize staples, sources of protein, or health services.
Research elsewhere has identified modest increases in household maize production attributable to the subsidy, in the range of 200-400 additional kilos of maize per hectare. Because mean household landholdings for farms in these regions are 1.08 hectares and mean per capita annual maize consumption is 133 kilos, a production increase of 200 to 400 kilos could signify annual maize self-sufficiency for between two and three additional members of each household. If many of these households before the subsidy were forced to cope with an annual maize deficit, then the subsidy could be improving nutrition and quality of life by decreasing the length and severity of that shortfall.
We must bear in mind that Malawi may present a special case among countries implementing small farmer input subsidies. With a large and growing population, a single production season, and a long-term decrease in per capita farm acreage devoted to maize production, Malawi’s economy is nonetheless centered in the production of maize. Maize comprises the majority of the diet, and most households consume what they grow and do not market the crop. The pathways, therefore, linking increases in production may be particular to Malawi. Nonetheless, the health impact we observe from the subsidy program there is important and should be investigated in other nations where similar experiments are underway.
Of course, production and income increases could affect children directly through improvements in calorie quantity or quality or access to health services or indirectly through improvements in diet and health of mothers during pregnancy. Ongoing research by our team seeks to understand the specific pathways at work.
Photo of woman selling grain in Malawi market courtesy T.H. Larson