Effect of targeted fertiliser subsidy on poverty reduction in Togo

Abstract

The reintroduction of innovative forms of input subsidies in sub-Saharan Africa (SSA) following the food crisis of 2008 raises concerns about their effectiveness in the fight against poverty. In this context, this paper examines the effect of the targeted fertiliser subsidy implemented in Togo from 2017 to 2019. For this purpose, the propensity score matching and instrumental variables regression approaches were used to control for potential selection and endogeneity bias. Nationwide crosssectional survey data covering 2 319 smallholder farmers in Togo suggests that participation in the targeted fertiliser subsidy programme significantly improved beneficiaries’ poverty status through increased income, leading to a decline in poverty incidence, gap and severity. However, the magnitude of the effect is very small compared to that in some other West African countries. Therefore, to enhance the effect of targeted subsidy policy on income and poverty status, there is a need to improve the rate and composition of the subsidy.