Agricultural Subsidies, Productivity and Rural Assets: The effect of Farmer Input Support Programme (FISP) on small scale farmers in Mwembeshi- Chibombo District of Zambia

In this study, we consider the effect Farmer Input Support Programme (FISP) on asset accumulation for small-scale farmers in Mwembeshi (Chipwili), Chi-bombo district of Zambia. Further, we estimate the determinants of maize productivity among the farmers in this area. Data collection was through a well-structured questionnaire administered on 150 respondents selected through random sampling technique resulting into two equal samples of bene-ficiaries and non-beneficiaries of the FISP. Same questions were administered on both groups (appendix 1) and resulted into a data set used in the analysis. The methods of analysis used were descriptive statistics for each sample group, gross margin analysis (GMs) for national data and linear/log production func-tion analysis using the Ordinary Least Square (OLS) criterion applied on the whole sample. Major findings indicate farmers were middle aged (43) with average expe-rience of 13 years in maize farming. There was high level of illiteracy as about 50% of total respondents had primary education while 31, 15 and 4% had sec-ondary, no formal education and tertiary education respectively. About 98% of farmers grow maize but mainly on subsistence level as the mean cultivated size was 1. 9 Ha. Less than half of the sample possesses oxen; a critical asset. Maize was their major source of income averaging ZMK1 250 000 per annum. There was distress selling at ZMK 42 000/50Kg bag. Maize farming was not profita-ble for small scale farmers in the study based on 2008 figures. Results further showed that incomes are determined by output while the latter is determined by output/Ha. Fertiliser and oxen in turn determine the productivity of the farmers though price may also play a bigger role. Member-ship to FISP may lead to a 29% growth in productivity than otherwise. Similar-ly, access to oxen may change output per Ha by 28% while 1 Kg of fertilizer per Ha may lead to 0.52 % change in productivity. Farmers in this area are less productive by 6-10 times of world average and they apply less fertiliser averag-ing between 11-41% of the Zambian recommended rate. The beneficiaries en-joy extra output of 13X50Kg bags/Ha. The group average output per Ha is 17X50Kgs. There are significant differences in production related activities between the groups. The majority of small-scale farmers demonstrated low access to assets hence the perpetual poverty. On top of that, they are also food insecure. How-ever, through its mode of transmission - the fertiliser subsidy which is used in larger quantity by the beneficiaries- the FISP has effectively helped members accumulate assets though not sufficient enough to propel them out of poverty. The capacity for the small-scale farmers to purchase fertiliser from the private sector has remained low. Further, the structural inefficiencies reported using 2008 floor prices still engulf the small-scale farmers. Although not much can be said about the real effect of the programme in the absence of baseline in-formation on the small scale farmers in the area, FISP is a necessary but not sufficient instrument in rural poverty fight that is accentuated by food insecurity. Relevance to Development Studies This study contributes to the little knowledge on the effect of government funded intervention measures on rural agricultural assets and consequently comprehending rural poverty in terms of access to assets and capabilities of the marginalized rural masses in the Zambian context. The knowledge would help in understanding lasting effects of such interventions since the possession of assets reflects the long term capabilities of the rural masses in terms of how they are acquired and used to further generate wealth. Current income-based measures may not reflect the actualities on the ground as this category of peo-ple does not earn steady incomes. This study ‘goes beyond the averages’1 that epitomize most researches. Coincidentally, agriculture is likely to be the new development paradigm for the Low Income Countries because of its potential and the opportunities it enjoys. Therefore, well targeted, sustainable and asset enhancing farmer input support programmes may just make a difference in the development of these countries whose meager government resources will be a larger part of this process for a long time to come. That is what this study has tried to show.