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Fig. 2 Simulations involving extension to farmer ratios as a percentage of agricultural budgets in Ethiopia, Kenya, Malawi and Tanzania Fig. 3 Simulations involving subsidy expenditures as a percentage of agricultural budgets in Ethiopia, Kenya, Malawi and Tanzania.
For three OECD countries (Australia, Canada and the United States), the subsidy elements of export credit operations were higher than their export subsidy expenditures.
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"Rationing might reduce subsidy expenditure, but it will come at the price of increased social tension," warned Moustapha Bassiouny, an economist at Egypt's Signet Institute.
Subsidy expenditure as a percentage of agricultural budgets spent on farm input subsidies.
Table 1 shows the EFR and subsidy expenditure as a percentage of agricultural budgets (SER) in each of the four countries.
In this section, we present the results of five simulations involving extension-to-farmer ratio and subsidy expenditure as a percentage of agricultural budgets.
The cost of the government subsidy is the aggregate subsidy expenditure, which is the total area insured ( AE cdot Pr left( {C,sigma,p} right) ) multiplied by the subsidy per unit of area ( p cdot sigma ).
The results suggest the powerful impact of subsidy expenditure on the probability of adoption; despite reducing EFR in Ethiopia by 75%, the probability of adoption increased by approximately 4% (from 26 to 30%).
(c) Combining different levels of the two policies: In a third category of comparisons, we combine different levels of subsidy expenditure and EFRs to reflect the fact that policies can be combined.
We therefore include multiple countries (Ethiopia, Kenya, Malawi and Tanzania) so as to include country-level policy variables obtained from secondary sources: (1) extension personnel-to-farmer ratios (EFR) and (2) subsidy expenditure as a percentage of agricultural budgets spent on farm input subsidies (SER).
The expected predicted probabilities of adoption under different extension and subsidy-expenditure scenarios were compared.
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