Do vouchers improve government fertilizer distribution? Evidence from Nigeria

• Published in: Agricultural economics 2014-07, Vol.45 (4), p.393-407
• Main Author: Liverpool‐Tasie, Lenis Saweda O
• Format: Article
• Language: English
• Subjects: bags; Developing countries; farmers; Fertilizer subsidies; Fertilizers; Input vouchers; LDCs; Nigeria; prices; product quality; Q12; Q13; Q18; School choice; Sub-Saharan Africa
• ISSN: 0169-5150; 1574-0862
• DOI: 10.1111/agec.12094

Government distribution of subsidized fertilizer in Sub‐Saharan Africa is often characterized by cumbersome administrative processes and diversion of the product from the proclaimed beneficiaries. This study uses propensity score matching techniques to analyze an input voucher program in Nigeria that was meant to demonstrate an alternative and more efficient distribution mechanism for subsidized fertilizer. We find that participants in the 2009 voucher program received more bags of subsidized fertilizer than nonparticipants and also paid significantly lower prices compared to those who purchased directly from the market. On average, however, participating in the voucher program did not improve the timeliness of fertilizer receipt or the quality of the product. Where statistically significant, participating in the program increased the likelihood that the product was received late and that some complaint about the product's quality was made. As many developing countries; particularly in Sub‐Saharan Africa adopt the use of input vouchers or scale up already existing programs, this study demonstrates when the distribution of subsidized fertilizer via vouchers improves farmers’ timely access to good and more affordable fertilizer. It highlights some key issues to be considered in order to expand the dimensions of success of well‐targeted input voucher programs