Abstract:
This paper estimates the impact of the ISPAAD input subsidy program on cultivated
area, output and productivity in Botswana’s subsistence economy, using panel data for
five agricultural regions and the cropping seasons of 1978/79 to 2013/14. The paper
also assesses programme cost effectiveness and draws implications for programme
sustainability. Results show that the programme has induced increases of 78%, 87%,
40%, 168% and 46% in total acreage, cereal acreage, non-cereal acreage, cereal output
and cereal yields, respectively. Therefore, the programme may have impacted positively
on food security and welfare among subsistence households. However, it was found
to not be cost effective in that the value of crops produced was equivalent to only 51%
of public expenditure on land cultivation and seasonal inputs. Moreover, the ratio of
the value of incremental cereals produced to programme expenditure on cereals was
estimated at 26%. Therefore, public expenditure patterns suggest that ISPAAD’s
positive impacts on crop production and food security will not be sustained beyond the
programme implementation period. Some farmers would exit farming if production costs
on land cultivation alone were to be privatised, rather than being borne by Government.
The main conclusion is therefore that ISPAAD is not cost effective, and is fiscally and
economically unsustainable.
Description:
The series comprises of papers which reflect work in progress, which may be of interest
to researchers and policy makers, or of a public education character. Working papers
may already have been published elsewhere or may appear in other publications.
