Input subsidies have been suggested as a way of increasing agricultural production and thereby reducing poverty and improving food security. There has been a particular revival of interest in Africa, where sectoral performance has been relatively poor. The diagnosis has been as follows (see Wiggins and Brooks (2011) for supporting data). Food production in Africa has grown much more slowly than in Asia and Latin America. This has resulted in rising of cereals and other staples, and more people who are hungry and undernourished. Yields of staples have barely risen, largely since farmers have not applied fertiliser in sufficient amounts to take advantage of improved varieties. Farmers have not done so because inputs have been too costly and they have been too poor, with little or no access to credit. In order to break this impasse, it has been argued that it is necessary to subsidise the costs of inputs, thus creating a virtuous circle of higher yields, higher incomes, more food, and less hunger and poverty. Allied to this is the perception that a new generation of “smart” subsidies, such as those applied in Malawi, have managed to unlock this potential.