PRESENTATION ABSTRACT: "Matching Financial with Technological Innovations in Southern Africa," by Dean Yang

Several sub-Saharan African countries have implemented large-scale fertilizer subsidy programs to boost food security and small farm productivity, including Kenya, Malawi, Rwanda, and Zambia. Motivated by the recent escalation in food prices, other countries in the region and around the world are also considering fertilizer subsidies, making it all the more important to shed light on the impacts that such programs have on both short- and longer-term farm output and household consumption. An open question is whether one-time or temporary provision of subsidized fertilizer can set households on a long-run positive growth path, or whether input utilization and farm output eventually return to previous levels after subsidies are phased out. This graduation question is especially important from the perspective of long-term poverty dynamics in Africa.

New research in southern Africa is exploring whether innovations in financial services in rural areas can magnify the impact of fertilizer subsidies by giving farmers the ability to parlay their temporary subsidy-induced income gains into long-term continued self-financing of inputs. The particular focus is on commitment savings devices that help shield savings from being dissipated due to self-control problems or demands from one’s social network. The presentation will cover existing evidence on the impact of commitment savings devices in Africa and elsewhere, and will describe the outlines of a nascent research initiative in Mozambique.