Berquist, Lauren Falcao, Benjamin Faber, Thibault Fally, Matthias Hoelzlein, Edward Miguel, Andres Rodriguez-Clare. (2022). “Scaling Agricultural Policy Interventions”, National Bureau of Economic Research (NBER) Working Paper #30704.
Policies aimed at raising agricultural productivity have been a centerpiece in the fight against global poverty. We propose a new approach for quantifying large-scale agricultural policy counterfactuals that can both complement and be informed by evidence from field and quasi-experiments. We develop a quantitative model of farm-level agricultural trade that captures important, but typically neglected features of this setting, including homogeneous goods and additive trade costs. We propose a new solution method in this environment that relies on rich but widely available microdata. We harness field and quasi-experiments for parameter estimation, and showcase our approach in the context of subsidies for modern inputs in Uganda. We find that the average welfare gain from treatment, for the same sample of households, falls by 20% when implemented at scale. At the same time, the effect for the poorest households increases at scale as the gains shift from land onto labor, reducing the regressivity of the local intervention by more than half. We further document how these forces are shaped by the granular economic geography often missing in existing quantitative models and by the geographical scale of implementation, with new implications for randomized saturation designs. Finally, we discuss practical considerations for combining our toolkit with evidence from field and quasi-experiments.