CLTS Working Papers, Centre for Land Tenure Studies, Norwegian University of Life Sciences
Input subsidies and demand for improved maize: Relative prices and household heterogeneity matter!
Abstract: This study uses simple non-separable farm household models
calibrated to household, market, farming and policy context conditions in
Central and Southern Malawi. The models are used to simulate how household
characteristics, design and access to input subsidies affect the demand for
improved maize seeds; how increasing land scarcity affects the cropping
system and demand for improved maize; and how access to improved maize
seeds affects household welfare with varying access to input subsidies. The
model simulations demonstrate that a) there is a high risk that access to
subsidized improved maize seeds can crowd out commercial demand for
improved maize seeds but the effect is very sensitive to household
characteristics, market characteristics and relative prices; b) increasing
land scarcity increases the demand for improved maize seeds and improved
maize facilitates intensification among others through intercropping of
maize with legumes such as beans and pigeon peas; c) the welfare effects
depend on households’ ability to utilize the potential of the improved
varieties by combining them with complementary inputs.
Keywords: Improved maize varieties; input subsidies; impact on seed demand; land scarcity; intensification; cash constraints; household welfare; (follow links to similar papers)
JEL-Codes: Q12; Q16; Q18; (follow links to similar papers)
38 pages, June 3, 2013
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