Impacts of subsidized hybrid seed on indicators of economic well-being among smallholder maize growers in Zambia

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Abstract

We test the hypotheses that subsidies on hybrid seed change maize production, total household income, the severity of poverty, and relative deprivation among smallholder maize growers in Zambia. The analysis contributes to the literature by measuring the quantitative effects of seed (as compared to fertilizer) subsidies on indicators of household well-being rather than input demand. We apply a combination of econometric approaches to a nationally representative, balanced panel of smallholder maize-growing households, and invoke the chain rule to generate quantitative estimates of impacts per kilogram of subsidized seed. Our findings demonstrate that in the initial years of the program, subsidized seed enhanced the well-being of smallholder maize growers according to each indicator, but by small magnitudes. Simple calculations suggest high private and social benefit-cost ratios when benefits are measured in terms of household income, although magnitudes are sensitive to seed price and administrative costs.

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