assumptions about maize yield response to fertilizer, the authors do find that the program has generated a positive, though modest benefit-cost ratio in three of the four years since the subsidy program was initiated.

Despite the reported increase in maize production, it is not clear that the program has enhanced food security. Domestic maize prices have been high in three out of four years of the program, incurring a major hardship for poor people, including the 60 percent of farmers who are net maize buyers. There is a tendency for the program to focus on production objectives and producer welfare, but to ignore consumers, and thus the conditions necessary for overall food security. Also, based on farm panel data over a 6 year period, Ricker-Gilbert and Jayne (2011) find that the receipt of the subsidy in multiple prior years had little enduring effect on recipient households‘ incomes or asset wealth after they stopped receiving the subsidy.

Targeting has posed continuous difficulties. Household surveys suggest that the 2006/7 program was highly variable across locations in terms of targeting criteria, but that there was a tendency to reach households which were productive full-time farmers. Female-headed and poorer households were less likely to receive coupons (Holden et al. 2010b). Holden and Lunduka (2010b) also report the presence of secondary markets for coupons—not from households that initially received the coupons, but from other leakages in the distribution system. The secondary market for fertilizer coupons also favored wealthier households. The authors ask whether targeting is more effective at reaching poor and vulnerable people than would be a general subsidy.

Given the type of household reached it is not surprising that the voucher program displaces commercial sales. If the voucher for subsidized fertilizer is received by a farmer who would otherwise have bought fertilizer at a commercial price, then the voucher program may shift the composition of retailer‘s profits from commercial fertilizer to subsidized fertilizer, with uncertain effects on the total quantity of fertilizer applied to the farmer‘s field. Ricker-Gilbert, Jayne and Chirwa (2011) found that the displacement rate is considerably lower among the poorest farmers. They report an overall displacement rate of commercial fertilizer by subsidized fertilizer of 0.29, meaning that each additional kilogram of subsidized fertilizer distributed under the government program contributes an additional 0.71 kilograms to total fertilizer use.

Some ―crowding out‖ of commercial suppliers by government subsidy programs has also been demonstrated in Zambia, where an additional kilogram of fertilizer distributed under the subsidy program added 0.92 kg to the amount of fertilizer used by farmers (Xu et al. 2009). Where the private sector was already active, this leverage was only 0.12, suggesting that the subsidy program led to the withdrawal of some private retailers. By contrast, where fertilizer was targeted to areas where the private sector was inactive, and to poorer households, the leverage was as much as 1.7 kg per household, suggesting the potential for ―crowding in.‖ As can be expected given the history of fertilizer subsidies in Sub-Saharan Africa, program sustainability continues as a major issue. The costs of the Malawi program have exceeded the planned budget and represented 72 percent of the total budget of the Ministry of Agriculture, and 16 percent of the national budget, in 2009. Mann‘s (2007) concludes that the AISP, similar to the subsidies of the 1980s, is too large to be sustained, and three times as costly as the earlier Starter Pack Program, which had achieved considerable success (but was rejected by donors as too expensive). Malawi and Zambia have implemented nearly continuous fertilizer subsidy programs each year for the past several decades and no feasible exit strategy is apparent.

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