Effects of input subsidies on cropland allocation and diversification in Botswana’s subsistence economy

Abstract

ABSTRACT Input subsidy programs (ISPs) are an important agricultural development strategy in sub-Saharan Africa (SSA). Past studies have focused on the impact of ISPs on crop production, food security and poverty. Little attention has been devoted to assessing their impact on crop diversification, which is a strategy for managing production risk and improving soil fertility under cereal-based smallholder production environments in SSA. Meanwhile, there is growing debate on whether ISPs may conflict with the crop diversification strategy by promoting crop concentration. We estimate cropland allocation and diversification models to test this hypothesis for two ISPs in Botswana, Accelerated Rainfed Arable Programme (ARAP) and Integrated Support Programme for Arable Agriculture Development (ISPAAD), using panel data of agricultural regions and the cropping seasons of 1978/79 to 2013/14. Results reveal that ISPs have induced increased concentration on cereals, away from beans/pulses and oil crops, leading to reduced cropland diversification. ARAP induced a 6.7 percentage point rise in cereal area share and a 5.2 (1.4) percentage point fall in beans/pulses (oil crops) area share. Similarly, ISPAAD induced a 4.4 percentage point rise in cereal area share and a 4.1 percentage point fall in beans/pulses area share. By discouraging legume production, ISPs may lead to soil fertility loss, as legumes may help rebuild nitrogen stocks in soils.