Scarce resources make the evaluation of aid projects incredibly important, as many governments must do more with so much less. This is aptly demonstrated in Africa’s input subsidy programs (ISPs), programs that provide agriculture inputs such as fertilizer at a steep discount. The Zambian government spends 90% of its agriculture budget on ISPs. Unfortunately that leaves a very small percentage for other agriculture development projects. Some may argue spending such a large amount on subsidies fails to help improve agriculture development and food security in the African nation.
Zambia is not alone in the push for ISPs. Based on initial analysis of Malawi’s subsidy program, ten Sub-Saharan countries have designated significant budgetary commitment to input programs. African countries spend a combined $2 billion annually on ISPs. However, more recent analyses have shown these programs are not as effective as originally thought.
While input subsidy funding has increased, funding for other agriculture development initiatives suffers. Research and development and agricultural management programs are two areas that have had their budgets hacked to make up the difference. These other development initiatives are considered to be more effective methods for increasing agriculture production.
Subsidy programs are not as effective in African nations for several reasons. For one, fertilizers are not as effective if much of the soil in these nations. The soil does not absorb fertilizer well and as a result its full potential cannot be reached. Also, many of these programs are not effectively run. In Zambia, for instance, one-third of fertilizer subsidies are consistently late. Farmers therefore are unable to plant their crops during the ideal time period, causing yield losses.
A recent panel discussion hosted by International Food Policy Research Program (IFPRI) on ISPs discussed the political opportunities ISPs hold. They are a visible and positive program that politicians use. The quantitative nature of the program makes demonstrating success easy. This is despite the existence of more effective agriculture development initiatives. The positive political nature of ISPs also makes their elimination difficult and a political circus.
Of course, the best way to make ISPs more effective is to increase funding in complementary agriculture development projects such as research and development, seed technology, infrastructure improvement, and extension services. Unfortunately, a funding boost in these programs is unlikely if the government is already spending the majority of its budget on ISPs.
– Callie D. Coleman