Policy options for smart subsidies in Malawi

Input subsidy programs, through which farmers receive fertilizer (and in some cases seed) at below-market prices, were popular in many African countries in the post-independence era. They were largely phased out during the 1990s, however, because the emerging consensus at that time was that they only weakly contributed to agricultural productivity growth, food security, and poverty reduction goals and imposed major burdens on national treasuries that crowded out other important public expenditures to support agricultural development.