Farmer groups are considered potentially effective mechanisms to increase farmer livelihood by reducing information asymmetries and transaction costs. In many countries, farmers are coordinated in groups for participation in poverty reduction programs. This is common practice in many input voucher programs in Sub-Saharan Africa. While the effect of farmer groups on certain outcomes such as price received and marketing has been studied, few studies, if any, have examined the effect of intragroup dynamics on farmer experience of input voucher programs. Consequently, this research uses a fertilizer voucher scheme in Nigeria to explore whether different methods of distributing fertilizer through farmer groups can affect an intervention’s ability to increase farmer access to agricultural inputs. To receive a fertilizer voucher in a pilot targeted subsidy program in Nigeria, all farmers were required to be members of an organized group. However, for fertilizer distribution among one set of participants, individual farmers were given their allotted share directly, whereas farmers in the other set received their fertilizer indirectly through a group representative. Where fertilizer was given to a group representative for further distribution to members, respondents with close links to their farm group president received more bags of fertilizer than did those without. When fertilizer was given directly to farmers, such results did not occur. Separating the factors that determined if farmers received fertilizer from those that determined how much fertilizer they received once they participated in the program, strong evidence of intragroup dynamics was found only for the quantity of subsidized fertilizer received. The different outcome suggests that whereas groups may facilitate the process of farmer identification and coordination, intragroup dynamics may affect their efficacy for providing equal access to inputs for members. With intentions to adopt and scale up voucher programs in various food security and poverty-alleviation programs across developing countries, it is important to understand the role that social capital and intragroup dynamics plays in the successful implementation of such programs.
A case study of targeted subsidies in Nigeria
International Food Policy Research Institute (IFPRI)