Do input subsidy programs “crowd in” or “crowd out” commercial market development? Modeling fertilizer demand in a two‐channel marketing system

By Zhiying Xu, W. Burke, T. Jayne, J. Govereh. 2009

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Review: Taking stock of Africa’s second-generation agricultural input subsidy programs (2018, background): “…use (risk premiums, added weeding costs, transportation costs, etc.), a VCR of two is typically used as the benchmark for reliably profitable adoption (e.g., Xu et al., 2009; Sauer and Tchale, 2009), dating back to work by the Food and Agriculture Organization (1975) and Anderson et al. (1977).”
Cropland Allocation Effects of Agricultural Input Subsidies in Malawi (2012, result): “Furthermore, assetpoor households were more likely to receive no coupon than better-off households, which is consistent with reports by Ricker-Gilbert et al. (2011) and Xu et al. (2009) regarding subsidy beneficiaries in Malawi and Zambia, respectively.”
Agricultural Growth and Investment Options for Poverty Reduction in Rwanda (2010, unknown): “This finding is consistent with previous reports indicating that public-sector efforts at improving input supply can crowd out the private sector and reduces overall fertilizer use in some areas (Xu et al. 2009; Kelly et al. 2003).”
Disrupting Demand for Commercial Seed: Input Subsidies in Malawi and Zambia (2013, background): “It builds on previous studies that estimate the displacement effects of fertilizer subsidies on commercial fertilizer purchases in Zambia (Xu et al. 2009; Mason 2011) and in Malawi (Ricker-Gilbert, Jayne, and Chirwa 2011).”