Impact of Fertilizer Price Subsidy on Agricultural Growth in Togo

Abstract

Fertilizer subsidy policy remains a major plank of inputs policies in Africa. Its objective is to improve agricultural productivity and reduce poverty among farmers. This article examines the impact of fertilizer prices subsidy on agricultural growth in Togo. The Autoregressive distributed lag (ARDL) modelling approach is used to analyse both short and long run impacts of fertilizer subsidy on agricultural growth. Using data from national and international sources over the period 1985 to 2016, the results show that, the impact of fertilizer price subsidy on agricultural growth is limited. The price subsidy did not significantly enhance agricultural growth neither in the short nor in the long run. Moreover, the results highlight the fact that factors, which play a major role in agricultural growth are expenditure, arable land and labour force. To improve the efficiency of fertilizer subsidy, the government should drop price subsidy policy at global level and experience alternative options, which would facilitate fertilizer access to poorer and more marginal farmers.