Participation in the targeted subsidy program and fertiliser usage in Togo

Abstract

Over the last decades, many African countries have reintroduced subsidy programs in an innovative form called 'smart subsidy'. In this context, Togo has implemented, from 2017 to 2019, a targeted fertiliser subsidy program. This article aims to assess the determinants and the effect of participation in the program. Using the instrumental variables approach, the analysis was carried out on data from nationwide surveys covering 2,319 agricultural households. The results show that determinants of access to the subsidy program are age, access to extension service, improved seeds use, possession of a mobile phone, and a short distance to the fertiliser point of sale. Moreover, participation in the subsidy program increases fertiliser use per hectare by 56%. However, this effect varies according to gender, age, and farm size. These findings have implications for better design and implementation of subsidy programs. The results suggest that to maximise the expected effects of the subsidy, the program should primarily target young household heads, female household heads, and households with small farm sizes.