Rethinking Agricultural Input Subsidies in Poor Rural Economies

{jathumbnail off}Poor_Rural_EconomiesAgricultural input subsidies were a common element in agricultural development in poor rural economies in the 1960s and 70s, including successful green revolutions. Although subsidies have continued, to a greater and lesser extent, in some countries, conventional wisdom as well as dominant donor thinking in the 80s and 90s was that subsidies had been ineffective and inefficient policy instruments in Africa, which contributed to government overspending and fiscal and macroeconomic problems.

Recent years have seen a resurgence of interest in agricultural input subsidies in Africa, together with the emergence of innovative subsidy-delivery systems. These developments, together with new insights into development processes, make it necessary to revisit the conventional wisdom on subsidies.

This should include an examination of the various development opportunities and constraints facing African farmers, a review of recent experience with input subsidies, and a thorough reexamination of the role played by agricultural input subsidies in the Asian green revolution.