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

Author

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  • Estelle Koussoubé

    (PSL, Université Paris Dauphine, LEDa, IRD, UMR DIAL)

  • Céline Nauges

    (University of Queensland)

Abstract

(english) This article explores the importance of fertilizer profitability in explaining the relative, apparent low use of chemical fertilizers 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 1.41 on those plots which received fertilizers, with significant variations across regions. For those plots on which fertilizers were not applied, we predict that fertilizers should have been profitable in most cases under the current level of subsidized fertilizer prices. These findings suggest that the low uptake of chemical fertilizers might have been driven by factors other than profitability, including insufficient supply of subsidized fertilizers to farmers in need. Our results also call for increasing the availability of credit to farmers in order to encourage adoption of chemical fertilizers. 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. _________________________________ (français) Cet article explore l’importance de la rentabilité de l’utilisation des engrais chimiques comme facteur explicatif de leur relative faible adoption par les agriculteurs au Burkina Faso. En utilisant des données détaillées au niveau parcelle, nous estimons la productivité marginale des engrais à 19kg/ha en moyenne. Cette dernière varie considérablement en fonction des caractéristiques des sols. La rentabilité des engrais, mesurée par le rapport valeur-coût, est estimée à 1.41 sur les parcelles qui ont reçu des engrais et varie d’une région à l’autre. Concernant les parcelles sur lesquelles l’engrais n’est pas utilisé, nous trouvons que l’utilisation d’engrais serait profitable sur une grande majorité de ces parcelles au prix actuel subventionné de l’engrais. Ces résultats suggèrent que des facteurs autres que la rentabilité sont potentiellement responsables de la faible adoption des engrais. Ces facteurs incluent notamment les difficultés d’accès aux engrais subventionnés par les agriculteurs. Notre analyse suggère également qu’une augmentation de l’accès au crédit par les agriculteurs permettrait de favoriser l’adoption des engrais chimiques. Enfin, nos résultats montrent également la nécessité de corriger du biais d’endogénéité de l’utilisation des engrais dans l’équation des rendements de maïs.

Suggested Citation

  • Estelle Koussoubé & Céline Nauges, 2015. "Returns to fertilizer use: does it pay enough? Some new evidence from Sub-Saharan Africa," Working Papers DT/2015/07, DIAL (Développement, Institutions et Mondialisation).
  • Handle: RePEc:dia:wpaper:dt201507
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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. Goundan, Anatole & Faye, Amy & Henning, Christian H. C. A. & Collins-Sowah, Peron A., 2020. "Investing in risky inputs in Senegal: Implications for farm profit and food production," Working Papers of Agricultural Policy WP2020-07, University of Kiel, Department of Agricultural Economics, Chair of Agricultural Policy.
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    5. Godwin Kofi Vondolia & Håkan Eggert & Jesper Stage, 2021. "The Effect of Fertilizer Subsidies on Investment in Soil and Water Conservation and Productivity among Ghanaian Farmers Using Mechanized Irrigation," Sustainability, MDPI, vol. 13(15), pages 1-13, July.
    6. Cai, Rong & Ma, Jie & Wang, shujuan & Cai, Shukai, 2024. "Can crop insurance help optimize farmers’ decisions on pesticides use? Evidence from family farms in East China," Journal of Asian Economics, Elsevier, vol. 92(C).
    7. 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.
    8. 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).
    9. 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.
    10. 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, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(4), pages 471-503.
    11. Dong-Gill Kim & Elisa Grieco & Antonio Bombelli & Jonathan E. Hickman & Alberto Sanz-Cobena, 2021. "Challenges and opportunities for enhancing food security and greenhouse gas mitigation in smallholder farming in sub-Saharan Africa. A review," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(2), pages 457-476, April.
    12. Lassalas, Marie & Duvaleix, Sabine & Latruffe, Laure, 2021. "Stringency of environmental standards, yield, product quality and revenue: Evidence from French wheat production," 2021 Conference, August 17-31, 2021, Virtual 315184, International Association of Agricultural Economists.
    13. 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).
    14. Tristan Le Cotty & Elodie Maître d'Hôtel & Moctar Ndiaye & Sophie S. Thoyer, 2021. "Input use and output price risks: the case of maize in Burkina Faso [Utilisation d'intrants et risques de prix : le cas du maïs au Burkina Faso]," CIRED Working Papers hal-03252026, HAL.
    15. 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.
    16. Nsabimana, Aimable & Adom, Philip Kofi & Mukamugema, Alice & Ngabitsinze, Jean Chrysostome, 2023. "The short and long run effects of land use consolidation programme on farm input uptakes: Evidence from Rwanda," Land Use Policy, Elsevier, vol. 132(C).
    17. 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.
    18. Malacarne, J.G. & Paul, L.A., 2022. "Do the benefits of improved management practices to nutritional outcomes “dry up” in the presence of drought? Evidence from East Africa," Food Policy, Elsevier, vol. 113(C).
    19. 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.
    20. Oyakhilomen Oyinbo & Jordan Chamberlin & Tahirou Abdoulaye & Miet Maertens, 2022. "Digital extension, price risk, and farm performance: experimental evidence from Nigeria," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(2), pages 831-852, March.
    21. 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).
    22. Pieter Rutsaert & Jordan Chamberlin & Kevin Ong’are Oluoch & Victor Ochieng Kitoto & Jason Donovan, 2021. "The geography of agricultural input markets in rural Tanzania," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(6), pages 1379-1391, December.

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    More about this item

    Keywords

    Burkina Faso; fertilizers; maize yield; subsidization program; technology adoption.;
    All these keywords.

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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