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Variable returns to fertilizer use and its relationship to poverty: Experimental and simulation evidence from Malawi:

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  • Harou, Aurélie
  • Liu, Yanyan
  • Barrett, Christopher B.
  • You, Liangzhi

Abstract

Despite the rise of targeted input subsidy programs in Africa over the last decade, several questions remain as to whether low and variable soil fertility, frequent drought, and high fertilizer prices render fertilizer unprofitable for large subpopulations of African farmers. To examine these questions, we use large-scale, panel experimental data from maize field trials throughout Malawi to estimate the expected physical returns to fertilizer use conditional on a range of agronomic factors and weather conditions. Using these estimated returns and historical price and weather data, we simulate the expected profitability of fertilizer application over space and time. We find that the fertilizer bundles distributed under Malawi’s subsidy program are almost always profitable in expectation, although our results may be reasonably interpreted as upper-bound estimates among more skilled farmers given that the experimental subjects were not randomly selected.

Suggested Citation

  • Harou, Aurélie & Liu, Yanyan & Barrett, Christopher B. & You, Liangzhi, 2014. "Variable returns to fertilizer use and its relationship to poverty: Experimental and simulation evidence from Malawi:," IFPRI discussion papers 1373, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:ifprid:1373
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    References listed on IDEAS

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    1. Esther Duflo & Michael Kremer & Jonathan Robinson, 2008. "How High Are Rates of Return to Fertilizer? Evidence from Field Experiments in Kenya," American Economic Review, American Economic Association, vol. 98(2), pages 482-488, May.
    2. Dercon, Stefan & Christiaensen, Luc, 2011. "Consumption risk, technology adoption and poverty traps: Evidence from Ethiopia," Journal of Development Economics, Elsevier, vol. 96(2), pages 159-173, November.
    3. T.S. Jayne & David Mather & Nicole Mason & Jacob Ricker-Gilbert, 2013. "How do fertilizer subsidy programs affect total fertilizer use in sub-Saharan Africa? Crowding out, diversion, and benefit/cost assessments," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 687-703, November.
    4. Kelly, Valerie A. & Crawford, Eric W. & Ricker-Gilbert, Jacob, 2011. "The New Generation of African Fertilizer Subsidies: Panacea or Pandora’s Box?," Food Security International Development Policy Syntheses 107460, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    5. Marenya, Paswel Phiri & Barrett, Christopher B., 2009. "The effect of soil quality on fertilizer use rates among smallholder farmers in western Kenya," 2009 Conference, August 16-22, 2009, Beijing, China 51671, International Association of Agricultural Economists.
    6. Michael Morris & Valerie A. Kelly & Ron J. Kopicki & Derek Byerlee, 2007. "Fertilizer Use in African Agriculture : Lessons Learned and Good Practice Guidelines," World Bank Publications, The World Bank, number 6650.
    7. Jayne, T. S. & Govereh, J. & Wanzala, M. & Demeke, M., 2003. "Fertilizer market development: a comparative analysis of Ethiopia, Kenya, and Zambia," Food Policy, Elsevier, vol. 28(4), pages 293-316, August.
    8. Chibwana, Christopher & Fisher, Monica & Shively, Gerald, 2012. "Cropland Allocation Effects of Agricultural Input Subsidies in Malawi," World Development, Elsevier, vol. 40(1), pages 124-133.
    9. Paswel P. Marenya & Christopher B. Barrett, 2009. "Soil quality and fertilizer use rates among smallholder farmers in western Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 40(5), pages 561-572, September.
    10. Neil R. Miller, 2006. "Is Site-Specific Yield Response Consistent over Time? Does It Pay?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 471-483.
    11. Stein Holden & Rodney Lunduka, 2012. "Do fertilizer subsidies crowd out organic manures? The case of Malawi," Agricultural Economics, International Association of Agricultural Economists, vol. 43(3), pages 303-314, May.
    12. Jayne, Thomas S. & Mason, Nicole M. & Burke, William J. & Shipekesa, Arthur M. & Chapoto, Antony & Kabaghe, Chance, 2011. "Mountains of Maize, Persistent Poverty," Food Security Collaborative Policy Briefs 118476, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    Cited by:

    1. Narayanan, Sudha & Das, Upasak & Liu, Yanyan & Barrett, Christopher B., 2017. "The “Discouraged Worker Effect†in public works programs: Evidence from the MGNREGA in India," IFPRI discussion papers 1633, International Food Policy Research Institute (IFPRI).
    2. Lenis Saweda O. Liverpool-Tasie, Thomas & Jayne, Milu Muyanga, and Awa Sanou, 2017. "Are African Farmers Experiencing Improved Incentives To Use Fertilizer?," FSP Research Papers 270632, Michigan State University, Feed the Future Innovation Lab for Food Security (FSP).
    3. Sudha Narayanan & Upasak Das & Yanyan Liu & Christopher B. Barrett, 2016. "Discouraged worker effect in public works programs: Evidence from the MGNREGA in India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2016-027, Indira Gandhi Institute of Development Research, Mumbai, India.

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    Keywords

    Fertilizers; subsidies; Agricultural development; productivity; farm inputs; poverty alleviation;

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