scale fertilizer subsidy program in Tanzania with respect to its ability to meet its stated targeting criteria and the effect of subsidy receipt on both smallholder commercial fertilizer demand and total fertilizer use. We find that the majority of subsidy recipients met the targeting criteria in practice in regards to area cultivated to maize and that few of them had used inorganic fertilizer on maize or rice in the previous five years. However, we also find that depending on the year, between 25 to 37% of households receiving a fertilizer voucher did not use it, implying that these households did not gain the experience using fertilizer on maize or rice as envisioned by NAIVS. We find that receipt of one kilogram of subsidized fertilizer has a small (0.11 kg) but significant positive effect on smallholder commercial fertilizer demand. This implies that NAIVS is the only large-scale fertilizer subsidy program in Sub-Saharan African during the 2008-2014 period that managed to avoid ‘crowding-out’ of smallholder commercial fertilizer demand at a national level, on average. When we adjust the effect of household receipt of subsidized fertilizer on total smallholder fertilizer use (given that 25 to 37% of subsidized fertilizer was not actually used by intended recipients) the adjusted effect of an extra kilogram of subsidized fertilizer on total fertilizer use in 2012/13 (2008/09) was 0.827 kg (0.697 kg).
Keywords: Africa, fertilizer subsidy, smallholder agriculture