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Returns to fertiliser use: Does it pay enough? Some new evidence from Sub-Saharan Africa

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  • Estelle Koussoubé
  • Céline Nauges

Abstract

The low level of modern inputs adoption by African farmers is considered to be a major impediment to food security and poverty reduction in Sub-Saharan Africa. The government of Burkina Faso, following the example of a number of other countries in the region, launched a subsidy programme in 2008 to encourage farmers’ uptake of chemical fertilisers and foster cereal production. This article explores the importance of fertiliser profitability in explaining the relative, apparent low use of chemical fertilisers by farmers in Burkina Faso. Using large-scale plot data, we estimate maize yield response to nitrogen to be 19 kg/ha on average and to vary with soil characteristics. Profitability, which we measure through the calculation of a marginal value cost ratio, is estimated at 1.4 on those plots which received fertilisers, with significant variations across regions. For those plots on which fertilisers were not applied, we predict that fertilisers should have been profitable in most cases under the current level of subsidised fertiliser prices. These findings suggest that the low uptake of chemical fertilisers might have been driven by factors other than profitability, including insufficient supply of subsidised fertilisers to farmers in need. Our results also call for increasing the availability of credit to farmers in order to encourage adoption of chemical fertilisers. Finally, our results also show that not taking into account the endogeneity of nitrogen use in the yield equation may produce biased estimates of the maize yield response to nitrogen.

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  • Estelle Koussoubé & Céline Nauges, 2017. "Returns to fertiliser use: Does it pay enough? Some new evidence from Sub-Saharan Africa," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 44(2), pages 183-210.
  • Handle: RePEc:oup:erevae:v:44:y:2017:i:2:p:183-210.
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    Cited by:

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    2. Catherine Ragasa & Antony Chapoto, 2017. "Moving in the right direction? The role of price subsidies in fertilizer use and maize productivity in Ghana," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 9(2), pages 329-353, April.
    3. Berazneva, Julia & Lee, David R. & Place, Frank & Jakubson, George, 2018. "Allocation and Valuation of Smallholder Maize Residues in Western Kenya," Ecological Economics, Elsevier, vol. 152(C), pages 172-182.
    4. Tristan Le Cotty & Elodie Maître d’Hôtel & Raphael Soubeyran & Julie Subervie, 2018. "Linking Risk Aversion, Time Preference and Fertiliser Use in Burkina Faso," Journal of Development Studies, Taylor & Francis Journals, vol. 54(11), pages 1991-2006, November.
    5. Holden, Stein T., 2018. "The Economics of Fertilizer Subsidies," CLTS Working Papers 9/18, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 16 Oct 2019.
    6. van Dijk, Michiel & Morley, Tomas & van Loon, Marloes & Reidsma, Pytrik & Tesfaye, Kindie & van Ittersum, Martin K., 2020. "Reducing the maize yield gap in Ethiopia: Decomposition and policy simulation," Agricultural Systems, Elsevier, vol. 183(C).
    7. Haider, Hamza & Smale, Melinda & Theriault, Veronique, 2018. "Intensification and intrahousehold decisions: Fertilizer adoption in Burkina Faso," World Development, Elsevier, vol. 105(C), pages 310-320.
    8. Joachim Vandercasteelen & Mekdim Dereje & Bart Minten & Alemayehu Seyoum Taffesse, 2018. "Labour, profitability and gender impacts of adopting row planting in Ethiopia," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 45(4), pages 471-503.
    9. Theriault, Veronique & Smale, Melinda & Haider, Hamza, 2017. "Maize Yield Response to Fertilizer under Differing Agro-Ecological Conditions in Burkina Faso," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258492, Agricultural and Applied Economics Association.
    10. Haider, Hamza & Smale, Melinda & Thériault, Véronique, 2018. "Yield Response Of Dryland Cereals In Mali To Fertilizer: Insights From Household Survey Data," Feed the Future Innovation Lab for Food Security Policy Research Papers 270642, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    11. Jindo, Keiji & Schut, Antonius G.T. & Langeveld, Johannes W.A., 2020. "Sustainable intensification in Western Kenya: Who will benefit?," Agricultural Systems, Elsevier, vol. 182(C).

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    More about this item

    Keywords

    Burkina Faso; fertilisers; maize yield; subsidisation programme; technology adoption;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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