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Is increasing inorganic fertilizer use in Sub-Saharan Africa a profitable proposition ? evidence from Nigeria

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  • Liverpool-Tasie, Lenis Saweda O.
  • Ogunleye,Wale Olatunji
  • Omonona,Bolarin Titus
  • Sanou,Awa
  • Liverpool-Tasie, Lenis Saweda O.
  • Ogunleye,Wale Olatunji
  • Omonona,Bolarin Titus
  • Sanou,Awa

Abstract

Inorganic fertilizer use across Sub-Saharan Africa is generally considered to be low. Yet, this belief is predicated on the assumption that it is profitable to use rates higher than currently observed. However, there is little rigorous empirical evidence to support this notion. Using a nationally representative panel data set, and with due recognition of the role of risk and uncertainty, this paper empirically estimates the profitability of fertilizer use for maize production in Nigeria. The analysis finds that inorganic fertilizer use in Nigeria is not as low as conventional wisdom suggests. Low marginal physical product and high transportation costs significantly reduce the profitability of fertilizer use. The paper finds evidence that strategies to reduce transportation costs are likely to have a much larger effect on the profitability of fertilizer use than fertilizer subsidies. Apart from reduced transportation costs, other constraints such as timely access to the product; availability of complementary inputs such as improved seeds, irrigation, and credit; as well as good management practices are also necessary for sustained agricultural productivity improvements.

Suggested Citation

  • Liverpool-Tasie, Lenis Saweda O. & Ogunleye,Wale Olatunji & Omonona,Bolarin Titus & Sanou,Awa & Liverpool-Tasie, Lenis Saweda O. & Ogunleye,Wale Olatunji & Omonona,Bolarin Titus & Sanou,Awa, 2015. "Is increasing inorganic fertilizer use in Sub-Saharan Africa a profitable proposition ? evidence from Nigeria," Policy Research Working Paper Series 7201, The World Bank.
  • Handle: RePEc:wbk:wbrwps:7201
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    Cited by:

    1. Liverpool-Tasie, Lenis Saweda O. & Sanou, Awa & Mazvimavi, Kizito, 2015. "How profitable is sustainable intensification? The case of fertilizer micro-dosing in Niger," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205879, Agricultural and Applied Economics Association.
    2. Jayne, T.S. & Mason, Nicole M. & Burke, William J. & Ariga, Joshua, 2016. "Agricultural Input Subsidy Programs In Africa: An Assessment Of Recent Evidence," Feed the Future Innovation Lab for Food Security Policy Research Papers 259509, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    3. Bhargava, Anil K. & Vagen, Tor & Gassner, Anja, 2018. "Breaking Ground: Unearthing the Potential of High-resolution, Remote-sensing Soil Data in Understanding Agricultural Profits and Technology Use in Sub-Saharan Africa," World Development, Elsevier, vol. 105(C), pages 352-366.
    4. Sheahan, Megan & Barrett, Christopher B., 2017. "Ten striking facts about agricultural input use in Sub-Saharan Africa," Food Policy, Elsevier, vol. 67(C), pages 12-25.
    5. Megan Sheahan & Joshua Ariga & T. S. Jayne, 2016. "Modeling the Effects of Input Market Reforms on Fertiliser Demand and Maize Production: A Case Study from Kenya," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(2), pages 420-447, June.
    6. Jayne, Thomas & Kolavalli, Shashidhara & Debrah, Kofi & Ariga, Joshua & Brunache, Pierre & Kabaghe, Change & Nunez-Rodriguez, Walter & Owusu Baah, Kwaku & Bationo, Andre A. & Jeroen Huising, Elzo & La, 2015. "Towards A Sustainable Soil Fertility Strategy In Ghana," Feed the Future Innovation Lab for Food Security Policy Research Papers 258733, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    7. Ragasa, Catherine & Mazunda, John, 2018. "The impact of agricultural extension services in the context of a heavily subsidized input system: The case of Malawi," World Development, Elsevier, vol. 105(C), pages 25-47.
    8. Unknown, 2015. "Towards A Sustainable Soil Fertility Strategy in Ghana," Miscellaneous Publications 212898, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    9. Lenis Saweda O. Liverpool-Tasie, 2017. "Is fertiliser use inconsistent with expected profit maximization in sub-Saharan Africa? “Evidence from Nigeria”," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(1), pages 22-44, February.
    10. World Bank Group, "undated". "Africa's Pulse, No. 14, October 2016," World Bank Publications - Reports 25097, The World Bank Group.

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    Keywords

    Transport Services; Climate Change and Agriculture; Crops and Crop Management Systems; Food Security; Fertilizers;
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