Agricultural extension and input subsidies to reduce food insecurity. Evidence from a field experiment in the Congo

Koen Leuveld, Eleonora Nillesen, Janneke Pieters, Martha Ross, Maarten Voors & Soazic Elise Wang Sonne

#2018-009

Small holder farming in sub-Saharan Africa is plagued by low productivity levels and high malnutrition. Extension services aim to increase knowledge and uptake of new technologies to boost yields. However, despite the potential benefits adoption rates are still low. One explanation may be that providing training and demonstration trials alone is not enough to increase input demand needed to raise productivity. Lifting multiple barriers simultaneously could prove to be more effective. We use a field experiment in eastern DRC to test whether adding input subsidies to an extension programme provides synergistic benefits. Specifically, in a sample of 64 villages that received an agricultural extension programme, a random half was given the opportunity to buy subsidised input packages. We estimate the impact of the subsidy scheme on knowledge, input use, yields and food security indicators. We find robust evidence on input use at the extensive margin: providing subsidies increases fertiliser uptake by 5 percentage points, while uptake of inoculant increases by 3 percentage points, one year after the subsidy scheme was introduced. These effects are substantial given the extremely low baseline use (3% in both cases) of fertiliser and inoculant even after the extension intervention. In addition, villages further away from these markets have lower adoption rates as cost of access increase. Our results caution against overoptimistic views on the downstream effects of productivity enhancing technologies and that investments in structural changes in markets are likely needed to stimulate growth in the agricultural sector.

Keywords: agricultural extension, input subsidies, impact evaluation, food security, DRC

JEL codes: O13, O33, Q12