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Agricultural household effects of fertilizer price changes for smallholder farmers in central Malawi

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  • Komarek, Adam M.
  • Drogue, Sophie
  • Chenoune, Roza
  • Hawkins, James
  • Msangi, Siwa
  • Belhouchette, Hatem
  • Flichman, Guillermo

Abstract

This simulation study explored the agricultural household effects of changes in the price of inorganic nitrogen fertilizer for farmers in central Malawi. We selected the Dedza district to conduct this study, which is a district reliant on maize production for household livelihoods. This study used data from a household survey to develop and calibrate an agricultural household model for a representative household. The survey focused on socio-economic and agronomic factors. This included plot-level agronomic details for crop inputs and yields. Using our dynamic model, we found a negative association between fertilizer prices and fertilizer use, maize area, and income. Removing fertilizer prices led to an increased use of nitrogen fertilizer at the household scale from 16.8kg to 49.6kg and this helped increase household income by 52%. We calculated an average own-price elasticity of fertilizer demand of −0.92. Although higher fertilizer prices increased legume acreage, which had potential environmental benefits, household income fell. Our benefit-cost ratio calculations suggest that government actions that deliver changes in fertilizer prices are relatively cost effective. Our study highlights the reliance of households on maize production and consumption for their livelihood, and the effects that changes in fertilizer prices can have upon them.

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  • Komarek, Adam M. & Drogue, Sophie & Chenoune, Roza & Hawkins, James & Msangi, Siwa & Belhouchette, Hatem & Flichman, Guillermo, 2017. "Agricultural household effects of fertilizer price changes for smallholder farmers in central Malawi," Agricultural Systems, Elsevier, vol. 154(C), pages 168-178.
    • Handle: RePEc:eee:agisys:v:154:y:2017:i:c:p:168-178
    DOI: 10.1016/j.agsy.2017.03.016
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    6. Mahama, T.A.-K. & Maharjan, K.L. & Issahaku, Z.A., 2018. "An analysis of Maize Yield Response to Agrochemical Expenditure using the Generalized Propensity Score (GPS) matching approach," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277072, International Association of Agricultural Economists.
    7. Oyinbo, Oyakhilomen & Chamberlin, Jordan & Vanlauwe, Bernard & Vranken, Liesbet & Kamara, Yaya Alpha & Craufurd, Peter & Maertens, Miet, 2019. "Farmers' preferences for high-input agriculture supported by site-specific extension services: Evidence from a choice experiment in Nigeria," Agricultural Systems, Elsevier, vol. 173(C), pages 12-26.
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