Agricultural input subsidies, extension services, and farm labour productivity nexus: Evidence from maize farmers in Tanzania

Abstract

AbstractThis paper examines the effect of agricultural input subsidies (AIS) and agricultural extension services (AES) on farm labour productivity in plots planted with maize in Tanzania, using panel data from the National Panel Survey in Tanzania. To control for the endogeneity of the two programmes, a control function and instrumental variable approach is used to estimate the effects of AIS and AES on farm labour productivity. The results show that AIS and AES are significant in raising labour productivity in maize‐planted plots. Similarly, AIS and AES are also effective in increasing land productivity in these plots. Moreover, each programme has comparable effects on land productivity and farm labour productivity. These findings imply that public investments in AIS and AES are effective in raising farm productivity.