Sifting through the weeds: Understanding heterogeneity in fertilizer and labor response in Central Malawi

Despite heavy subsidies provided by the Malawian government, input use remains low. Estimated maize response rates to fertilizer vary widely across studies, raising questions about the sources of this variability and whether fertilizer is generally profitable for most smallholder farmers at commercial prices. This study uses survey and soil data from farmer-identified most and least fertile maize plots in Central Malawi to explain the heterogeneity in maize response to inputs and to determine whether this heterogeneity explains low uptake of commercial fertilizer. We estimate maize yield functions to characterize the range of maize response to fertilizer and weeding labor at locations that vary from marginal to mesic environments and show that differences in productivity persist with a plot-level fixed effect and are not solely attributable to farmer skill. Using a range of price scenarios and classifying soil fertility by total organic carbon levels, we find that fertilizer is more profitable on low fertility plots, while current levels of weeding labor are more likely to be profitable on the high fertility plots. The largest variation in profitability occurs between plots, rather than price scenarios, highlighting the importance of policies to improve soil fertility and address constraints to use of complementary inputs.