Catalysts of agricultural supply markets: The case for smart subsidies in Zambia
The decision to purchase new productive technologies, however promising, presents great risks for the rural poor. The result is that farmers are disinclined to purchase new technologies, and manufacturers, wholesalers and retailers are unwilling to invest in inventory and supply. To break this chain, smart subsidies can be used to accelerate demand and supply for critical production technologies. Properly administered incentives can attract commercial suppliers to actively address the needs of rural, underserved smallholder farmers without creating dependency. This article presents the case of smallholder farmers in Zambia to highlight how incentives can play a role in developing weak agribusiness service markets.
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