Impact of input subsidies on technical efficiency of smallholder maize producers in North Eastern Zimbabwe: a propensity score matching approach

Despite extensive global research on subsidies in agriculture, empirical evidence on their impacts on smallholder technical efficiency in Sub-Saharan Africa and Zimbabwe remains scarce, limiting contextually relevant policy insights. In this study, we empirically analyze the impact of input subsidies on the technical efficiency of smallholder maize farmers using a randomly selected sample of 408 farmers in northeastern Zimbabwe. Technical efficiency was estimated using a translog stochastic frontier specification, while propensity score matching was employed to account for confounding factors in the impact evaluation. The overall mean technical efficiency across the sampled smallholder farms was 0.66, signifying a substantial untapped productivity potential. Technical inefficiency increased with farmer age, subsidy amount, and arable land size but decreased with greater maize farming experience, frequent extension contact, and livestock ownership. Critically, we found evidence that input subsidies negatively impact the technical efficiency of smallholder maize farmers in northeastern Zimbabwe. Smallholder farmers can boost productivity without expanding inputs by adopting efficient practices in the short term. This necessitates strengthening extension systems by increasing visits, quality, and coverage to disseminate best practices for input optimization. Concurrently, livestock’s efficiency gains warrant targeted veterinary support systems to reduce cattle mortality rates. The indefinite nature of the Pfumvudza input subsidy program fosters dependency and exacerbates technical inefficiency. Hence, we recommend transitioning to a rigorous, time-bound subsidy framework starting with full support, followed by a 50% subsidy reduction coupled with low-interest loans, and finally complete phase-out. Without reform, current subsidies risk perpetuating the inefficiencies they aim to resolve.