The effects of Kenya’s ‘smarter’ input subsidy program on crop production, incomes, and poverty

Kenya joined the ranks of sub-Saharan African (SSA) countries implementing a targeted input subsidy program for inorganic fertilizer and improved seed in 2007 with the establishment of the National Accelerated Agricultural Inputs Access Program’s “Kilimo Plus” initiative. Implemented from 2007/08, Kilimo Plus aimed to provide 50 kg each of basal and top dressing fertiliser, and 10 kg of improved maize seed to resource poor smallholder farmers with the goals of increasing access to inputs, raising yields and incomes, improving food security, and reducing poverty. But did the program achieve its goals, and what are the lessons learned from Kilimo Plus and other targeted input subsidy programs (ISPs) in SSA for the design and implementation of future county-level input policies and programs in Kenya? Results suggest that, despite replacing what would have been commercial fertilizer purchases by farmers, Kilimo Plus did substantially increase maize production and reduce poverty depth and severity of recipient households. Moreover, the program’s positive effects are somewhat larger than those of targeted ISPs in Malawi and Zambia. Much of Kilimo Plus’s relative success vis-à-vis the Malawi and Zambia programs is likely due to its effective targeting of relatively resource-poor farmers and its implementation through vouchers redeemable at private agro-dealer shops. Kenyan counties considering implementing ISPs should bear in mind these findings, but also carefully weigh the cost effectiveness of ISPs relative to other much-needed investments, including rural roads and agricultural research, development, and extension. Indeed, since Kilimo Plus alone is not sufficient to bring households out of poverty, a more holistic approach to improving production and sustainable intensification is required. This may imply use of vouchers for other crops and inputs, particularly those which enhance soil health such as lime, as well as an increase in complementary public/private investments in research, extension, irrigation, transport infrastructure, information, and affordable and appropriate innovations. Policy Brief No. 11 October, 2015