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Subsidies, Savings, and Sustainable Food Security: A Field Experiment in Mozambique

a PSC Research Project

Investigator:   Dean Yang

What are the short- and long-run impacts of fertilizer subsidies on smallholder farmers? Do subsidies have greater long-run impacts when they are provided in combination with innovative savings facilities? This research seeks to shed light on these questions using a field experiment among farmers in rural Mozambique. In partnership with a local financial institution, we will randomize offers of fertilizer subsidies to farm households, alongside randomization of savings accounts. Of particular interest, we seek to establish the importance of ?commitment? savings accounts that allow account holders to request that funds not be released until a given date (e.g., immediately prior to the planting season, so that funds are preserved for farm input purchases). Such accounts can be important if farmers have self-control problems or face pressure to share assets with others in their social network. Analysis of project impacts will rely on administrative data from the partner financial institutions alongside baseline and follow-up surveys of participating farm households.

Funding Period: 07/01/2009 to 12/31/2013

Country of Focus: Mozambique

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