Input Subsidies and Women Entrepreneurship: Evidence from Tanzania

Abstract

ABSTRACT In many parts of the world, women face barriers to accessing improved agricultural inputs. In Tanzania, a program called the National Agricultural Input Voucher Scheme (NAIVS) was implemented from 2008 to 2014 to provide smallholder farmers with vouchers to purchase inputs at a subsidized price, with the goal of improving productivity and increasing income and food security. Using data from the Tanzania Living Standards Measurement Study panel, we analyzed the effects of NAIVS on female-headed households’ market participation, sales, and profitability. The analysis showed that NAIVS increased market participation of female-headed households by 11%, particularly in downstream positions in domestic value chains. However, there were no discernible effects on sales and profitability, indicating that although the program reduced input costs, production costs remained high enough to offset the efficiency gains from the subsidized inputs.