Input Markets

Since the 1950s, Malawi has used a national fertilizer subsidy program as a way to spur use of inorganic fertilizers, boost domestic maize production, and ensure food security and self-sufficiency for smallholder farmers. According to new working paper from the Malawi Strategy Support Program, however, the national subsidy program may not be the most efficient investment for improving the country’s food security and domestic production goals.

Africa’s agricultural sector has the potential to drive important economic growth and development in the region. Agriculture accounts for 16 percent of Africa’s annual GDP and employs over half of its labor force, particularly youth and women workers. Despite the sector’s vast potential, however, African agriculture remains hampered by low resource productivity and little or no value addition; shocks like climate change, ongoing regional and local conflict, and supply and market disruptions resulting from the COVID-19 pandemic and global conflicts have only exacerbated these challenges.

Global fertilizer markets experienced significant price surges beginning in 2020 and through 2022 due to a combination of factors, including higher natural gas prices, supply chain disruptions triggered by COVID-19, trade disruptions due to the Russia-Ukraine war, and export restrictions. Although parallel increases in international agricultural commodity prices may have cushioned these price shocks, insufficient availability and affordability of fertilizers are likely to have affected yield and profitability of smallholder production systems.

The Kenyan National Fertilizer Subsidy Program (NFSP), implemented during the short rainy season in September 2022, has emerged as a pivotal policy in the government’s efforts to expand food production and mitigate soaring food prices.

An innovative market system development (MSD) intervention in Mozambique has helped increase use of agricultural inputs and access to critical market information among smallholder farmers, according to a new policy brief released by IFPRI. These results extended beyond the direct beneficiaries as well, highlighting the potential for such interventions to provide wide-ranging benefits.