Study warns fertilizer subsidies alone may limit Tanzania’s farm growth over time
New research says Tanzania should match fertilizer subsidies with stronger investment in irrigation, research and improved seeds to support lasting agricultural growth.
TANZANIA – Fertilizer subsidies have helped increase Tanzania’s agricultural output in the short term, but a new study warns that relying on them without wider investment could reduce the sector’s long term growth.
Researchers from the University of Dodoma found that government spending on fertilizer subsidies supports agricultural growth in the short term. However, the study says the same approach may have the opposite effect over time if the country does not invest more in irrigation, improved seeds, research and extension services.
The study, published in the Journal of Agricultural Economics and Policy, examined fertilizer subsidy spending between 1995 and 2024. Researchers Noah G. Sikwese, Lutengano Mwinuka and Joel J. Mmasa used an Autoregressive Distributed Lag model to assess both the short term and long term effects of government expenditure on fertilizer subsidies.
The findings show that higher subsidy spending increases agricultural Gross Domestic Product in the short term. However, the researchers found that a one percent increase in fertilizer subsidy expenditure reduces agricultural growth by 4.25 percent in the long term.
The study links this outcome to weak implementation, poor allocation of resources and reduced investment in other areas that support farm production. The researchers say delays in fertilizer distribution also reduce the value of subsidies because many farmers receive inputs after the best planting period.
The report says Tanzania should treat fertilizer subsidies as one part of a wider agricultural development plan instead of relying on them as the main support measure. It recommends stronger investment in irrigation systems, improved seed development, agricultural research and extension services to support higher productivity over time.
The researchers also call for closer coordination among agro dealers to improve fertilizer distribution and ensure farmers receive inputs on time. They add that linking subsidy programmes with modern farming technologies would improve results while reducing waste in public spending.
The findings come as governments across Africa continue to spend large amounts on agricultural input subsidy programmes to improve food production, strengthen food security and increase farmers’ incomes. The researchers say policymakers should rely on evidence when designing future agricultural support programmes.
The study concludes that fertilizer subsidies remain an important tool for helping farmers access essential inputs. However, lasting agricultural growth will depend on combining subsidies with stronger investment in irrigation, research, technology and efficient delivery systems.
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