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SNV launches paper on the role of demand side subsidies in agricultural PUE

Presented for the first time in an End User Subsidy lab webinar, SNV published a paper on the role of end user subsidies in Productive Use of Energy in the agri-sector.

The paper examines the role of demand-side subsidies (DSS) in overcoming end-user affordability constraints that hinder the adoption of agricultural productive use of energy (PUE) equipment. Developed through an extensive literature review and stakeholder interviews, the paper offers a nuanced approach to subsidy design, aligning subsidy tools with the specific affordability constraints within a given market ecosystem.

Productivity gains in smallholder agriculture can significantly improve rural livelihoods, but affordability constraints limit the use of productive equipment. The paper introduces this approach in three parts:

Nuances of affordability: The paper delves into the concept of affordability, establishing a foundation for understanding how subsidies can address specific end-user affordability challenges.

Agricultural PUE ecosystem maturity: Next the varying maturity levels of agricultural PUE ecosystems are explored. This helps us understand how specific affordability challenges and corresponding subsidy tools manifest differently across diverse settings.

Conceptual framework: Finally, a conceptual framework is presented designed to guide decision-making on when and how to apply demand-side subsidies concerning the maturity of the ecosystem.

This discussion paper is now public to foster dialogue and contribute to ongoing efforts in tackling end-user affordability challenges.

You can download the paper here.