Farmer Groups, Input Access, and Intragroup Dynamics: A Case Study of Targeted Subsidies in Nigeria

Farmers' groups are thought to be one potentially effective mechanism to improve farmers' livelihoods 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 farmers' groups on certain outcomes such as received prices and marketing has been studied, few studies, if any, have examined the effect of intragroup dynamics on farmers' experience with input voucher programs. Consequently, this research uses a fertilizer voucher scheme in Nigeria to explore whether different methods of distributing fertilizer through farmers' groups can affect an intervention’s ability to increase farmers' 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, one set of participants (individual farmers) were given their allotted share of fertilizers directly, whereas farmers in the other set received their fertilizers indirectly through a group representative. Where fertilizers were 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 such close connections. When fertilizers were 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 these group's 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 play in the successful implementation of such programs.