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Fertilizer market reform and the determinants of fertilizer use in Benin and Malawi

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  • Minot, Nicholas
  • Kherallah, Mylène
  • Berry, Philippe

Abstract

Most countries in sub-Saharan Africa have reduced or eliminated fertilizer subsidies and liberalized input marketing as part of the reform process that began in the early 1980s. The effect on fertilizer prices and use is one of the most frequently mentioned criticisms of liberalization. The effect of these reforms, however, has varied widely across countries. The study finds that fertilizer use is closely related to crop mix and access to inputs on credit, but not to household income.. In Benin, 88 percent of the fertilizer purchased by farmers is bought on credit through the integrated cotton marketing system managed by the parastatal SONAPRA. However, almost one third of this fertilizer is diverted to maize and other crops. In Malawi, tobacco is the most important cash crop among smallholders, but less than half the tobacco growers are able to purchase fertilizers on credit. Maize accounts for about 60 percent of the fertilizer use, compared to less than a third for tobacco. This difference in the tradability of the main crop being fertilized helps explain some of the difference in performance. The results demonstrate some of the paths by which cash crop and food crop production may be complementary. This can occur through the residual effect of fertilizer on food crop production, through the alleviation of cash constraints for the purchase of fertilizer, and through the availability of inputs on credit.Thus, the benefits of export liberalization must be weighed against the risk that it will weaken the enforceability of seasonal agricultural credit, with indirect consequences for food crop productivity.

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series MTID discussion papers with number 40.

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Date of creation: 2000
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Handle: RePEc:fpr:mtiddp:40

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Keywords: Cash crops Developing countries Case studies. ; Fertilizer industry. ; Subsidies. ;

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References

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  1. Reardon, Thomas & Kelly, Valerie A. & Yanggen, David & Crawford, Eric W., 1999. "Determinants Of Fertilizer Adoption By African Farmers: Policy Analysis Framework, Illustrative Evidence, And Implications," Staff Papers 11779, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  2. André Croppenstedt & Mulat Demeke, 1996. "Determinants of adoption and levels of demand for fertilizer for cereal growing farmers in Ethiopia," CSAE Working Paper Series 1996-03, Centre for the Study of African Economies, University of Oxford.
  3. Ephraim Nkonya & Ted Schroeder & David Norman, 1997. "Factors Affecting Adoption Of Improved Maize Seed And Fertiliser In Northern Tanzania," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1-3), pages 1-12.
  4. Coady, David P, 1995. "An Empirical Analysis of Fertilizer Use in Pakistan," Economica, London School of Economics and Political Science, vol. 62(246), pages 213-34, May.
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Citations

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Cited by:
  1. Rashid, Shahidur & Sharma, Manohar & Zeller, Manfred, 2002. "Micro-lending for small farmers in Bangladesh," MTID discussion papers 45, International Food Policy Research Institute (IFPRI).
  2. Sauer, Johannes & Tchale, Hardwick, 2006. "Alternative Soil Fertility Management Options in Malawi - An Economic Analysis," 2006 Annual meeting, July 23-26, Long Beach, CA 21423, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Delgado, Christopher L. & Rosegrant, Mark W. & Wada, Nikolas & Meijer, Siet & Ahmed, Mahfuzuddin, 2002. "Fish as food," MTID discussion papers 52, International Food Policy Research Institute (IFPRI).
    • Delgado, Christopher L. & Rosegrant, Mark W. & Wada, Nikolas & Meijer, Siet & Ahmed, Mahfuzuddin, 2002. "Fish as food," MSSD discussion papers 52, International Food Policy Research Institute (IFPRI).
  4. Shahabuddin, Quazi & Dorosh, Paul A., 2002. "Comparative advantage in Bangladesh crop production," MSSD discussion papers 47, International Food Policy Research Institute (IFPRI).
  5. Minot, Nicholas & Daniels, Lisa, 2002. "Impact of global cotton markets on rural poverty in Benin," MSSD discussion papers 48, International Food Policy Research Institute (IFPRI).
  6. Rainer Thiele, 2002. "The Bias Against Agriculture in Sub-Saharan Africa: Has It Survived 20 Years of Structural Adjustment Programs?," Kiel Working Papers 1102, Kiel Institute for the World Economy.
  7. Dorosh, Paul A. & Shahabuddin, Quazi, 2002. "Rice price stabilization in Bangladesh," MSSD discussion papers 46, International Food Policy Research Institute (IFPRI).
  8. Gulati, Ashok & Narayanan, Sudha, 2002. "Rice trade liberalization and poverty," MSSD discussion papers 51, International Food Policy Research Institute (IFPRI).
  9. Wobst, Peter & Tchale, Hardwick & Frohberg, Klaus, 2004. "Soil Fertility Management Choice in the Maize-Based Smallholder Farming System in Malawi," 2004 Inaugural Symposium, December 6-8, 2004, Nairobi, Kenya 9524, African Association of Agricultural Economists (AAAE).
  10. Kamau, Mercy & Smale, Melinda & Mutua, Mercy, 2013. "Farmer Demand for Soil Fertility Management Practices in Kenya’s Grain Basket," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150722, Agricultural and Applied Economics Association.
  11. Akramov, Kamiljon T., 2009. "Decentralization, agricultural services and determinants of input use in Nigeria:," IFPRI discussion papers 941, International Food Policy Research Institute (IFPRI).
  12. Xu, Zhiying & Jayne, Thomas S. & Govereh, Jones, 2006. "Input Subsidy Programs and Commercial Market Development: Modeling Fertilizer Use Decisions in a Two-Channel Marketing System," 2006 Annual meeting, July 23-26, Long Beach, CA 21270, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  13. Tchale, Hardwick & Sauer, Johannes, 2006. "Soil Fertility Management And Agricultural Productivity In Malawi," 46th Annual Conference, Giessen, Germany, October 4-6, 2006 14954, German Association of Agricultural Economists (GEWISOLA).
  14. Arega, D.A. & Manyong, Victor M. & Omanya, G. & Mignouna, H.D. & Bokanga, M. & Odhiambo, George D., 2008. "Smallholder marketed surplus and input use under transactions costs: maize supply and fertilizer demand in Kenya," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52074, African Association of Agricultural Economists (AAAE).
  15. Smale, Melinda & Jayne, T.S., 2003. "Maize in Eastern and Southern Africa: 'seeds' of success in retrospect," EPTD discussion papers 97, International Food Policy Research Institute (IFPRI).

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