How Input Subsidies Boost Food Security in Developing Countries: Micro-Level Evidence From Zambia

While previous studies have examined the effects of input subsidies on income and yields, we study their impact on food security, measured through household dietary diversity, a key dimension of nutritional well-being—examined across specific pathways. Using nationally representative data from 7783 smallholder farmers in Zambia and an instrumental-variable-based causal mediation framework, we find that input subsidies improve household dietary diversity by 12.4%, of which 52.4% is mediated through household income. We also observed direct effects (81.3%) and indirect maize productivity effects (4.9%). Robustness checks using Judea Pearl's front-door criterion and instrumental variable regression analysis confirm the consistency of these results. Policy implications highlight the need for both short- and long-term strategies. In the short term, expanding access to subsidies for underserved farmers, strengthening extension services with nutrition-focused training, and improving credit and market access can ensure households translate income gains into more diverse diets. In the long term, diversifying cropping systems, investing in rural infrastructure and storage facilities, and developing agro-processing and value chains can build resilience and ensure that productivity gains translate into durable improvements in nutrition and livelihoods in Zambia and similar contexts.