Government fertilizer subsidy and commercial sector fertilizer demand: Evidence from the Federal Market Stabilization Program (FMSP) in Nigeria

We examine how the previous fertilizer subsidy program in Nigeria (FMSP) affected the demand for commercial fertilizer. We apply an endogenous double hurdle model to a pseudo-panel and cross-section data of farm households. The methodology accounts for potential endogeneity of commercial fertilizer price with subsidy. Our specification is also appropriate where few farmers report the use of both subsidized and commercial fertilizer. We find that 100 kg of subsidized fertilizer supplied to a farm household reduced the probability of its participation into commercial fertilizer market by 10–21% points, while not affecting fertilizer use upon participation.     

Fertilizers to support agricultural development in sub-Saharan Africa: what is needed and why

Substantial growth in inorganic fertilizer use is a prerequisite for sustained agricultural growth in sub-Saharan Africa. Increased fertilizer use can lead to modest but immediate and important increases in yields, while the profitability of other technologies will be stifled without adequate plant nutrients. Average fertilizer application rates in sub-Saharan Africa need to increase from 10 kg/ha to 50 kg/ha within 10 years to prevent mining of soil nutrients. That implies an 18% annual growth rate. This is substantially higher than trends in the region, but within a reasonable range of historically observed levels from other parts of the world. While over-use of fertilizers can create environmental problems, this is not a widespread problem in sub-Saharan Africa, and should not become one as a result of applying 50 kg/ha of inorganic fertilizers. Rather, near-term environmental concerns in agriculture in sub-Saharan Africa will stem from the lack of intensification. Farmer demand for fertilizers and the physical capacity to make fertilizers available are the two key issues that determine whether a 50-kg/ha goal will be attained. However, demand-side incentives cannot be separated from fertilizer supply possibilities. Several studies document that the simple physical availability of fertilizers to farmers, in the appropriate quantity, packages and at the appropriate time of year, remains a main constraint on increased fertilizer use in sub-Saharan Africa.     

Heterogeneous returns to chemical fertilizer at the intensive margins: Insights from Nepal

Increased fertilizer use is considered important for agricultural development in low-income countries. Promoting increased use of chemical fertilizer by lowering its price may be ineffective if demand is price inelastic. In theory, the price elasticity of demand depends on the returns to its use, but the evidence is scarce. Furthermore, while returns are often estimated for small changes in chemical fertilizer use, returns to larger changes in its use (intensive margins) are less understood. Through the inter-zonal comparisons in Nepal, we provide indicative evidence that greater returns to chemical fertilizer are associated with greater price elasticities of demand. Moreover, the evidence suggests that returns at the intensive margins, rather than returns to small changes, may largely account for inter-zonal differences in returns to chemical fertilizer within Nepal. The results suggest that better understanding the returns at the intensive margins is critical for effective agricultural inputs policies in developing countries.     

Understanding fertilizer adoption and effectiveness on maize in Zambia

Increased fertilizer use will likely be crucial for raising and sustaining farm productivity in Africa, but adoption may be limited by ineffectiveness under certain conditions. This article quantifies the impacts of soil characteristics on maize response to fertilizer in Zambia using a nationally representative sample of 1453 fields, combining economic, farm management and soil analysis data. Depending on soil regimes, average maize yield response estimates range from insignificant (0) to 7 maize kg per fertilizer kg. For the majority of farmers, the estimated average value cost ratio is between 1 and 2, meaning fertilizer use would be fiscally rational, barring uncertainty and transfer costs. Since transfer costs exist and outcomes are uncertain, however, many farmers may sensibly pause before deciding whether to adopt fertilizer. This suggests shifting the emphasis of chronically low fertilizer use in Africa away from explanations of “market failure” toward greater emphasis on improving fertilizer efficacy.     

Can food-for-work encourage agricultural production?

Food-for-work (FFW) is the most widely used type of public works program in Ethiopia through which a high share of the food aid is distributed. This paper assesses the impacts of FFW in Tigray, a chronically food insecure region in Ethiopia, in terms of relieving liquidity constraints and thereby improving input use in agriculture. A Heckman selection model on the adoption and intensity of fertilizer use demonstrated that FFW positively influenced the decision to adopt fertilizer and there was no evidence of disincentive effect.     

Are Kenyan farmers under-utilizing fertilizer? Implications for input intensification strategies and research

It is widely perceived that African farmers are under-utilizing inorganic fertilizer. However, very little long-term evidence from farmers’ fields, accounting for variations in agro-ecological conditions, has been assembled to back this claim or determine the conditions under which it is true. Using five waves of nationwide household survey data from Kenya covering 13 years, we estimate the relative and absolute profitability of nitrogen application rates on maize fields and compare these profitability conditions to observed nitrogen use patterns over time. In general, we find that farmers are consistently and steadily increasing towards risk-adjusted economically optimal rates of fertilizer application over time and that, in the most agriculturally productive areas, farmers’ application rates on maize sometimes exceed rates that maximize profitability. Fertilizer use rates may nevertheless be profitably raised in these areas, but doing so will require the adoption of complementary inputs and management practices that raise maize response rates to fertilizer application. This motivates a more holistic approach to input intensification strategies in the region.     

Potential of and constraints to the rice Green Revolution in Mozambique: A case study of the Chokwe irrigation scheme

This paper investigates the potential of and constraints to a lowland rice Green Revolution in Mozambique, using data from an agro-climatically favorable area, the Chokwe irrigation scheme. Our data show that, although the potential is high, the insufficient supply of irrigation water, excessively expensive chemical fertilizer, and moderately costly labor hinder the scheme from achieving that potential. First of all, an improvement in irrigation is crucial as it increases yield not only directly but also indirectly through its complementary relationship to chemical fertilizer. We also find that an improvement in credit access is important as it can increase the application of chemical fertilizer and labor by making the acquisition of these expensive inputs through markets possible. The unavailability of hired and exchange labor during peak seasons is another constraint to the intensive use of labor. The introduction of rice varieties with a shorter maturity duration would relax the timing of transplanting and thus spread out the peak seasons’ labor demand.     

Farmer groups and input access: When membership is not enough

This paper explores the efficiency of a targeted fertilizer subsidy program administered differently in two Nigerian states in 2009. An important dimension along which the otherwise similar programs differed was the fertilizer distribution strategy. Fertilizer distribution among program participants was done at the individual level for one set of farmers, while the fertilizer was given indirectly through a group representative for the other set. Where fertilizer was given to a group representative for further distribution to members, relatives of the farm group’s president received more bags of fertilizer than others. Where fertilizer was given directly to farmers such results did not obtain. This differential outcome suggests that while groups may facilitate the process of farmer identification and coordination, elite capture and intra group dynamics may affect their efficacy for providing equal access to inputs for members. Two-tier models enable us to model the potentially separate processes that determine participation in the voucher program and the amount of fertilizer received, upon deciding to participate. With intentions to adopt and scale up voucher programs in various food security and poverty alleviation programs across developing countries, it is important to understand when and how farmer groups can affect the successful implementation of such programs.     

What is the intrinsic value of fertilizer? Experimental value elicitation and decomposition in the hill and terai regions of Nepal

We use Becker-DeGroot-Marshak value elicitation methods to derive the intrinsic value that farmers in Nepal place on fertilizers. Eliciting values under three distinct procurement scenarios, we are able to decompose the total intrinsic value of fertilizer into a willingness-to-pay (WTP) to travel to procure fertilizer, a WTP for assured fertilizer supplies, and a WTP for the productivity benefits of fertilizer. Disaggregating our sample according to location (hills versus terai), we are able to estimate differences in total intrinsic value as well as value components along these geographical dimensions. While farmers in the hills are generally willing to pay more for urea than their counterparts in the terai, the total amount they are willing to pay is, on average, less than the market price for urea. We explore heterogeneity in valuations and discuss the implications of our findings on fertilizer procurement and distribution policies, as well as direct support policies that the Nepal government may consider. While support policies such as subsidies may encourage increased utilization of fertilizers, policies that lower barriers to private sector entry and increase the density of fertilizer retailers could also increase fertilizer utilization.     

Fertilizer supplies and foodgrain production in China, 1952–1982

Because organic fertilizer is limited, chemical fertilizer supply has to be increased drastically in the next few years if China is to cope with accelerated demands for foodgrain. Nevertheless, the combined application of both types of fertilizer has yielded a coherent trend of constant returns to scale over time. With marginal and average response rates remaining high, there is still room for increased use. Thus, the recent decentralization has led to higher demand for chemical fertilizers from Chinese peasants. However, it is doubtful whether such demand pressures will ever prevail over the established strategy of maximizing growth of heavy industries.     

农业投入与农业增长的灰色关联分析

运用灰色系统理论建立关联分析模型,对中国1981年～2008年间农业增长及其影响因素：农作物播种面积、农业劳动力、政府财政支农、农业贷款、农机总动力以及化肥使用量等因素进行了定量分析,认为农业投资、农机总动力和化肥使用量是促进中国农业增长的关键性生产要素,并提出了加快我国农业机械化进程,加强政府财政支农投资力度等提高我国农业生产能力的政策建议。     

How does population density influence agricultural intensification and productivity? Evidence from Ethiopia

This study uses household-level panel data on smallholder farmers in Ethiopia to estimate how rural population density (RPD) affects agricultural intensification and productivity. Our results suggest that higher RPD is associated with smaller farm sizes, and has a positive effect on input demand, represented by increased fertilizer use per hectare. Overall, increased input use does not lead to a corresponding increase in staple crop yields, and thus farm income declines as population density increases. This suggests a situation where farmers in areas of high RPD may be stuck in place, unable to sustainably intensify in the face of rising RPD and declining farm sizes.     

Measuring the commitment to reduce hunger: A hunger reduction commitment index

Can an index be constructed to assess governments’ commitment to reduce hunger? This paper argues for the need for such an index and outlines one way of constructing it. We use secondary data to construct the Hunger Reduction Commitment Index (HRCI) for 21 developing countries.We operationalise commitment around 3 themes: legal frameworks, policies and programmes and government expenditures, to find Malawi, the Gambia, Guatemala, Brazil and Senegal heading the list, with China, Nepal, Lesotho, Zambia and Guinea Bissau coming bottom. Rankings were robust to our choices about weighting and ranking methods.The paper demonstrates a viable method to measure political commitment and highlights the analytical importance of disentangling hunger commitment from hunger outcomes. Cross-tabulations of HRCI scores with hunger, wealth, administrative capacity and voice and accountability scores can guide action from different stakeholders (governments, civil society, donors). Finally, we show how primary data collection might be used to assess areas of strength and weakness in country specific commitments to reduce hunger.     

Adaptation to land constraints: Is Africa different?

Since the seminal works of Malthus and Boserup, scientists have long debated the impact of population growth and land constraints on the wellbeing of rural people. Today these concerns are particularly relevant to Africa, with its rapid population growth, very small farms, and chronic food insecurity. In this paper we examine adaptation to falling land-labor ratios using a comprehensive theoretical framework in which households faced with binding land constraints can respond in three ways: intensifying agricultural production, diversifying out of agriculture, and reducing fertility rates. Using cross-country data and drawing upon the existing literature, we reach three conclusions. First, population density is associated with reduced fallows and more intensive use of land but not fertilizer use or irrigation, indicating major challenges in achieving sustainable intensification or agricultural productivity growth. Second, there is little evidence of successful non-farm diversification in response to land pressures in Africa from domestic or international income sources. Third, rural Africans in land constrained countries desire smaller families, but have thus far benefited little from family planning policies. These findings underscore the need for a coordinated multi-sectoral approach to sustainably reduce poverty in the region.     

The effect of environmental regulations on Swiss farm productivity

This paper analyzes the evolution of Swiss farm productivity during the implementation of environmental policy reforms, when subsidization of farms became dependent on compliance with environmental regulations. We employ a production model formulation with technology parameters defined as the functions of subsidies, as well as individual farm characteristics. Our estimates for two groups of farms - dairy and crop farms - show that payment of subsidies via compliance in environmental regulations induced major changes in the production technology and productivity of inputs, especially land, labor and fertilizer. The overall effect of the subsidies on the output has been found to be negative. Additionally, we find that farms do not use their resources optimally, indicating some deficiencies in structural adjustments, primarily in the land and labor markets.     

东泰磷矿碎磨工艺改造研究与实践

分析了东泰磷肥磷矿现有碎磨系统的现状,提出新的碎磨工艺方案并将其应用生产实践中,为非金属矿的碎磨工艺改造提供了有益的借鉴。     

Fertilizer trade under market liberalization: preliminary evidence from Kenya

This paper reports results of a study aimed at identifying broad demand-side and supply-side influences on trade in inorganic fertilizers in Kenya, where, following decades of government control, the fertilizer market has been fully liberalized. Multiple regression analysis using data from a country-wide survey of fertilizer traders indicates that significant demand-side factors include agroecological conditions and maize market prices in the regions in which fertilizer traders operate. On the supply side, the number of years in fertilizer trading and access to credit are important. Implications for policy and research are drawn.     

The impact of farm input subsidies on maize marketing in Malawi

This paper investigates the effects of subsidised fertilizer on marketing of maize in Malawi. It uses the nationally representative two-wave Integrated Household Panel Survey (IHPS) data of 2010 and 2013. The results suggest that subsidised fertilizer on average increases farmers’ maize market participation as sellers, total quantity of maize sold, and maize commercialisation. In addition, participation in subsidised fertilizer programme is found to increase the probability of farmers to be net sellers and increases net quantity of maize sold. However, the study finds no evidence of effect on net quantity of maize bought and on household maize self-sufficiency. These results suggest that the farm input subsidy programme has contributed toward an increased level of maize market supply engagement for small farmers and in this sense, the policy has the potential to provide the wider external benefits. Furthermore, the results have implication on the sustainability of the subsidy programme, policy formulation and design of programmes for the agricultural sector and small farmers in developing countries.     

Ten striking facts about agricultural input use in Sub-Saharan Africa

Conventional wisdom holds that Sub-Saharan African farmers use few modern inputs despite the fact that most poverty-reducing agricultural growth in the region is expected to come largely from expanded use of inputs that embody improved technologies, particularly improved seed, fertilizers and other agro-chemicals, machinery, and irrigation. Yet following several years of high food prices, concerted policy efforts to intensify fertilizer and hybrid seed use, and increased public and private investment in agriculture, how low is modern input use in Africa really? This article revisits Africa’s agricultural input landscape, exploiting the unique, recently collected, nationally representative, agriculturally intensive, and cross-country comparable Living Standard Measurement Study-Integrated Surveys on Agriculture (LSMS-ISA) covering six countries in the region (Ethiopia, Malawi, Niger, Nigeria, Tanzania, and Uganda). Using data from over 22,000 households and 62,000 agricultural plots, we offer ten potentially surprising facts about modern input use in Africa today.