Impact of growth enhancement support scheme on productivity, welfare and income distribution of smallholder maize farmers in Kano

In an effort to unlock the productive potential of the agricultural sector in Nigeria, in 2011 the government implemented the Growth Enhancement Support Scheme (GESS) in all the thirty six states of Nigeria including Abuja Federal Capital Territory. GESS is an innovative input subsidy programme that uses phone technology to reach farmers directly with subsidized fertilizer and improved maize seeds. The overall objective of GESS programme was to raise the productivity of millions of smallholder farmers and bring them out of poverty while providing wider food security. Available empirical evidence on the effectiveness of GESS in achieving these objectives across the country is mixed, suggesting more empirical studies. This study contributes to literature on impact of farm input subsidy programme’s by examining the impact of GESS on productivity, welfare and income distribution of smallholder maize farmers in Kano state. The study adopted a cross-sectional research design and a two-stage sampling with stratification was used to draw a representative sample of GESS participants and non-GESS participants for the study. A total of 170 GESS participants and 220 non -participants were sampled across the state to address three objectives: (i) to examine the impact of GESS on maize productivity of smallholder farmers in Kano state, (ii) to examine the impact of GESS subsidy programme on welfare of the smallholder maize farmers in Kano State and finally, (iii) to examine the impact of GESS on income distribution of smallholder maize farmers in Kano state. The study employed Propensity Score Matching (PSM) and Instrumental Variable (IV) method to address objective one, while Propensity Score Matching and Binary logistic Regression with Instrumental Variable Method were used to address objective two and conditional Instrumental Variable Quantile Treatment Effect Model (IV- QTE) was used to address objective three. The result from the impact of GESS on maize productivity indicated that GESS significantly increased maize yield of participants by 37.7% (p ≤ 0.05¿ . Other factor that were positive and significantly correlates with maize productivity were membership to commodity associations, years of education, household size and age of household head while distance to farm correlates negatively with maize productivity. The results from the impact of GESS on household welfare show that the incidence of multidimensional poverty of the sampled population was high (64%). Implying that on average, 64% of the sampled population were multidimensional poverty index poor (MPI poor). While the incidence of multidimensional poverty of GESS participants was 59%, the mean MPI intensity was 0.45 and multidimensional poverty index was 0.29. The result from PSM indicates that GESS significantly decreased household multiple deprivation within the range of -0.05 to -0.06 depending on the matching method used. While the result from the binary logistic regression with instrumental variable method indicates that GESS subsidy decreased the probability of households to be MPI poor by 16.8 percentage points at p≤ 0.1, indicating that the impact of GESS programme on MPI was weak. The findings also show that off farm income, market participation, age of household head, education level and membership of commodity association negatively influence MPI. These factors ought to be accorded priority in subsequent design of poverty reduction programmes in the future. The results from IV-QTE shows that the impact of GESS subsidy was statistically higher at the lower tail of income distribution and the fraction of the poor who benefited more from the GESS programme vary by age, years of education, market participation and area cultivated. The results suggest that GESS subsidy was pro-poor with respect to farmers’ income. Overall, the findings of the study suggest that although GESS subsidy improved average productivity, it had little effect on farmers’ welfare. Improving the distributional outcome of the programme by effective targeting of vulnerable and poorer households would maximize programme’s contribution to food security, farmers’ income and poverty reduction. The study recommends that further research should focus on the estimation of overall increase in maize production as a result of GESS and to determine whether total benefits outweighs the costs.

Federal Ministry of Education and Tertiary Education Task Fund