Access to input subsidies through cooperatives: Does it improve the economic performance of farmers in the western province of Zambia?

B.Sc. GOSPEL IYIOKU, BSc

Master's thesis

Abstract:

Input Subsidy Programs (ISPs) have been receiving a great deal of recognition among farming households. These programs are means of making inputs readily available to farmers and increase their production. Literature suggests that Farmer Input Support Program (FISP) might be inadequate to improve the economic well-being of smallholder farmers as the poverty rate in rural areas in Zambia (currently at 82%) has been increasing over the years. Agricultural cooperatives serve as channels for the Government of Zambia to reach and assist smallholder farmers. Even though the FISP essentially targets smallholder farmers, it is claimed that only the more surplus scale farmers benefit from it. The study's main aim was to analyse the inclusion of members in farmers groups and input subsidies through cooperatives on their economic performance. Maize farmers and the current FISP was studied in the Western province of Zambia. Specifically, the study centred on evaluating how cooperatives internally managed input subsidies, analysis of the determinants that influence access to input subsidy through the cooperative and analysis of the effect of the input subsidy on the economic performance of beneficiaries and non-beneficiaries. One hundred eighty-seven maize farmers (111 – beneficiaries; 76 – non-beneficiaries) were selected from Limulunga and Mongu districts. The result of the Probit regression model showed that household and farm characteristics (farm size; cooperative experience), linkages within the cooperative (share investment; active participation) and social characteristics (reciprocity of relationship) had a significant positive influence on access to input subsidy in the cooperative. The Propensity Scores Matching (PSM) algorithms for analysing the effect of input subsidy indicated that beneficiaries of input subsidy among maize farmers in the cooperative reach significantly higher economic benefits than non-beneficiaries.

Keywords

Yield, Fertilizer Productivity, Propensity Score Matching, Agricultural Cooperatives, Zambia

Language used: English

Date on which the thesis was submitted / produced: 23. 4. 2021

Thesis defence

• Supervisor: Ing. Jiří Hejkrlík, Ph.D.

Czech University of Life Sciences Prague

Faculty of Tropical AgriSciences

Master programme / field:
Tropical Agriculture / International Development and Agricultural Economics