What are the constraining SUPPLY factors?
What are the constraining DEMAND factors?
The few big players have spread their distribution networks into SSA and the domestic producers in SSA are heavily dominated by the State. Increasing competition could assist in reducing prices in the long run. But in the short to medium term, fertilizer prices will reain quite sticky.
Domestic production of final fertilizer products will be influenced by availability of raw materials and intermediate products. To the extent that raw materials cannot be efficiently delivered to SSA plants in the short term, imports will play a significant role for the foreseeable future. Besides establishing new plants for granulated products takes a minimum of five years. Blended products could be an option in the short to medium term. A number of export crop companies eg., sugar industries have gone that route to minimize cost of final products.
Indeed it would be assuming the non obvious in trying to point at the "lack" of fertilizer infrastructure when until lately SSA has been a main importer of fertilizer when governments are accustomed to subsidizing it's use...
Such is a threat to further agricultural development growth but on the same token, an opportunity to launch a Policy dialogue for a compehensive strategy to reality. Evidence has shown that illiteracy in most SSA confines goes deeper than knowledge, encompassing the mode of knowledge gathering and transmission which all aren't favorable to overnight adoption of such new era of fertilizer use as expected.
Private sector is meant to be "making money" whereas other non market factors inherent to organizing and outreach in aligning to national development plans and alike are yet to been addressed by donors and public expenditure clauses...
The most critical challenges revolves around the lack of public-private dialogue on fertilizer policy and even less public-private investment in market development. Clearly the overarching challenge goes back to the lack of political will in supporting agriculture as a driver for poverty and hunger reduction.
informed dialogue is essential but policy research has to come first. The capacity to conduct research on the impacts of alternative policies and their cost-effectiveness is missing in the region. Lack of information is not deterring or delaying decision making even though the decisions are not well informed. Policy capacity needs to be instutionalised in decision making units of Member States.
Well put Jones, I can't wait to see the many silos we have all "acting" within the fertilizer arena, aligning their segmented efforts in response to your call for "dialogue" under forms of better information sharing and strategy outlay... As you may already know, there is a leadership take on the latter to work...Hopefully this dialogue would help focusing on that critical concern...
Empirical research conducted on stakeholders in the fertilizer sector in Nigeria reveals that fertilizer is in high demand by farmers, many of whom would be willing to pay market price as long as the product is available. The stakeholders reported that there is a persistent shortage in the supply of fertilizer held by public and private sellers and that the subsidy programs have been plagued by late delivery. Some stakeholders also report that rent-seeking activities and political manipulation have resulted in subsidized fertilizer being diverted to beneficiaries that do not meet the criteria to receive the subsidy.
Infrastructure is also a key aspect. It is important to improve road access and think of it within the value chain of production and commercialization of fertilizers.
Another crucial issue to improve access to fertilizers is information. This is clearly something governments can play a crucial role. The type of information needed are:
(a) Price information on different inputs. It is important to inform farmers on prices and market locations. We have normally focus on price information systems for output products but not for inputs.
(b) What type of fertilizer is needed in each specific geographical location. If we want to use the inputs in an efficient way so that farmers can get the needed increases in yields, farmers need to know what combinations of nutritents are needed. For this detail soil maps are essential.
(c) information is also needed on what crops can be grown under the specific soil types
All of the above could clearly be a public good and therefore justifies the investment from governments.
Following a research started out lately a couple of years ago, data for the above is readily available and actionable, with still a few minor roundings we're working on in perfecting the approach, such could be shared for further reference in a limited manner...
Projected amendments encompass rural VS peri-urban production site location for Senegal along with regional ramifications to Guinea (Konakry & Bissau)... Unfortunately the will is here but then at this very private/individual level the resources are not commensurate to the ambitions...
Can you share the documents you refer too? Any plans on infrastructure investments on fertilizer plants? I know of several initiatives on blending but not on fertilizer plants.
In some countries farmers are not used to using fertilizers (e.g. Mozambique), in which case the demand is low, and as a result there is little domestic market so prices are high since quantities used are low (reducing demand as well as returns even further). This situation means farmers don't really know how to use fertilizer either, which further reduces returns.... so integrated programs would be necessary to make those farmers more productive (extension and credit for example, ideally large enough to bring economies of scale to the market. In other situations even in the same region, farmers know how to use fertilizer but might increase returns from using it more properly, which might mean ensuring supply is available at the right times (Malawi, Zambia and ZImbabwe for example).
So to speak, unlikely our "nurtured" predisposition to being open to the "unknown" and figure it out, based on precedence and deeper sociological habits and history, farmers' context would require culturally competent approaches to change... Be it fertilizer introduction or new crop variety and cultivation methods... Mozambique is no different from Senegal or Malawi... To different contexts one needs different approaches in the way things are sought to unfold based on precedence, expectation, rational and irrational behavior.
Extension services in the Sixties with on the ground presence failed the way farmers were not addressed with a lesser technical language, less visual and more "paper, map, drawings"... Nowadays yet with better satelite imagery or phone capabilities one still has to address the issue of relevance in illiterate contexts where famers will have to make up their mind for a moment before getting another piece of the solution to their problems at a later date... The many in between non market stages to change adoption are not areas where the private sector is interested in investing... but on the adoption and use itself. Someone has to take care of that crucial gap in a responsibility sharing scheme...
Clearly illiteracy is a barrier, so we need to be innovative. In some trials we are doing we have found that we can breack the literacy barrier by working with younger kids of farmers which know how to read and write. Transfering good quality knowledge to their kids have shown that they can influence their parents and this could help us to break this structural problem. We called upward intergenerational transmission.
Great Maximo, like your humor with my titling' tweak... such an innovative manner to convey the message from kids to adults, a great learning opportunity indeed... The concept (upward intergenerational transmission) being very promising therefore!
Lack of fertilizer recommendations that result in high yields and good profits for farmers leads to weak incentives for fertilizer use hence limited demand. Indeed in most countries, current fertilizer recommendations are outdated, too general (“blanket recommendations”), failing to address location specific climatic and soil condition, failing to address all crop nutrients requirement (e.g., micronutrients), and not geared to the use of most appropriate and cost-effective fertilizer blends (such as high-analysis fertilizer). This has many negative consequences below that contribute to poor demand:
Well put Abdoulaye, your introductory paragraph sums up clearly our early findings within agrifert' justification, to which on my post on Thread "What is the market structure in Africa’s fertilizer market? How much does the global fertilizer market affect Africa?" I made such comment "It's safe to contend that sometimes institutional partnership agreement remains the challenge to overcome, besides clear institutional mandates guiding, or should I say that should be guiding ones actions in the decision making process... A lot of biases one needs to address beforehand..."
I believe the ball is on the court of such institutional actors in charge of setting "recommendations" based on site specific location and weather metrics along with existing satelite imagery data, application and technology.
When such data is available and you can see that it's not yet actively used on the ground, you wonder, what's missing here?.. based on familiarity with local CBOs/NGOs and now more CSOs surfacing in Senegal and a bit elsewhere in our west african region, grassroots are keen on getting involved in all development efforts even without such economic gains hitherto expected... Increasingly, social inclusion scenarios to development challenges are surfacing, demonstrating how private businesses can deliver profit and development impact simultaneously... This all could not have happened and thus reassured us, if we didn't try it out, that despite limited resources, our local fertilizer embryo' concept can evolve, drawing from sound partnership models...It definitely has a cost, but you can't wait in the verge of urge in these matters!
The constraining factors/determinants based on empirical study conducted in northern Nigeria are: (1) Availability: Farmers tend to use more fertiliser if the fertilisers are available at the right time and affordable price. (2) Distance to farmland: Farmers use more fertilizers in farmland that are close to access roads and markets.(3) Land area cropped: The larger the farm size, the lower the quantity of fertilizer use. Small farm size receive more fertilizer. This tends to support the idea of 'small is beautiful' as well as land intensification. (4) Nutrient uptake index: Crops that demand high nutrients, like maize and sorghum, receive more fertilizer application than legume, for instance.