Agricultural input subsidy and outcomes for farmers in Tanzania

This paper examines the impact of the government input subsidy-the National Agriculture Input Voucher-on farmers' production and welfare in Tanzania as well as the factors that influence agricultural production in the country. The analysis is based on the Living Standards Measurement Study-Integrated Surveys on Agriculture for 2008-13. The study uses panel fixed effects and difference-in-difference and propensity score matching methods to examine the two objectives. The results show that the input subsidy programme resulted in an initial increase in maize and rice production but not in the long run and only in a few regions. In addition, there was a decrease in total production in the southern region and the programme had little effect on farmers' welfare. The results show that this programme only partly met the expected outcomes in Tanzania due to mistargeting, inaccurate identification of households, and poor implementation.