Applied Micro Seminar : Every Tuesday
Time: 12:15 pm – 13:30 pm
Date: June, 2
Room : 3001

Tanguy BERNARD  (Université de Bordeaux, BxSE ; IPORA) “Targeting Social Returns: Non-linear Subsidies and Food Safety in Smallholder Agriculture”

Abstract :Smallholder adoption of agricultural technologies remains low despite widespread input subsidies. The literature focuses on subsidy levels and extensive-margin adoption, overlooking how subsidy structure may shape intensive adoption under externalities. We study Aflasafe, a biological control product that cuts aflatoxin (a carcinogenic fungal toxin) by over 80 percent in maize, yet sees negligible smallholder adoption. Contamination is invisible and informal markets do not reward safer grain, so farmers face stronger incentives to treat the share of their maize that they consume at home than the share they sell on markets, where the health benefit accrues to anonymous consumers. The conventional flat-per-unit subsidies can therefore raise entry but leave the externality-relevant intensive margin untouched.
In a two-season randomized experiment in Nigeria (2,121 farmers, 92 villages) we compare a flat 50 percent subsidy with a non-linear “buy 5, get 5 free” schedule at identical fiscal and out-of-pocket cost at full adoption (10 bags), isolating structure from level. Flat subsidies raise extensive-margin adoption but not intensity. The non-linear schedule raises full-field treatment by 15.6 pp, with an additional 16.5 pp when paired with a planting-time cash transfer, and is three times more cost-effective. A simple decomposition bounds a rational marginal-cost-kink channel from above; the residual is consistent with choice architecture and behavioural framing.

Joint work : Jérémy Do Nascimento Miguel (Université de Bordeaux, BxSE; IPORA), Yanyan Liu (IFPRI), Tesfamichael Wossen (IITA)

Organizers:
Benoît SCHMUTZ (Pôle économie du CREST)
Clément MALGOUYRES (Pôle économie du CREST)

Sponsors:
CREST