Can Burkina Faso’s Agricultural Mechanization Program Reduce Poverty in the Country

Agriculture plays a crucial role in the economy of Burkina Faso and other sub-Saharan African countries. It provides food for the population and is the primary source of employment in rural areas. The government of Burkina Faso has implemented a 2018–2027 Agro-Sylvo-Pastoral production sector policy to improve agricultural productivity and reduce poverty. This study uses a dynamic computable general equilibrium model linked to a microsimulation model, which evaluates the impact of subsidizing investment in agricultural capital on production, income, and poverty under three different fiscal financing scenarios. The results indicate that the agricultural mechanization subsidy program effectively reduces poverty, but the extent of the reduction varies depending on the financing method used. Financing the subsidy by reducing nonproductive public expenditure further reduces poverty, especially in rural areas. However, it is essential to supplement the subsidy policy with an agricultural extension service program for the program to have long-lasting effects.