Agricultural input subsidies for improving productivity, farm income, consumer welfare and wider growth in low- and lower-middle-income countries: a systematic review

In recent decades, agricultural productivity in low- and lower-middle-income countries, particularly in Africa, has fallen increasingly behind that of upper middle-income countries. Adequate use of agricultural inputs such as improved seeds and inorganic fertilisers has been identified as one way of enhancing agricultural productivity.

However, these inputs can be financially unaffordable or unattractive to many poor farmers in developing countries. Agricultural input subsidies aim to make inputs available to users at below market costs as a way of incentivising adoption, increasing agricultural productivity and profitability, increasing food availability and access and ultimately reducing poverty and stimulating economic growth. They were common in poor rural economies in the 1960s and 70s. Their use declined in the 1980s and 90s, but recent years have witnessed a resurgence of interest and investment, mainly in Africa. There remains considerable debate about the effectiveness and efficiency of their use and the conditions under which they may or may not work.