Input Markets

Africa must invest now to harness future agricultural technologies

By Ousmane Badiane, IFPRI. Cross-posted from IFPRI.org; this post first appeared on the Malabo Montpellier Panel blog.

A recent working paper from IFPRI’s Ethiopia Strategy Support Program (ESSP) discusses how public policies, specifically those related to social protection interventions, may induce changes in household size or structure and how, in turn, these possibly unintended changes may impact the welfare consequences of the policies themselves.

This blog originally appeared on IFPRI.org .

Trade integration is a powerful tool for economic growth, development, and poverty alleviation. In the Malabo Declaration (PDF) of June 2014, African countries committed to tripling the level of intra-African agricultural trade and services by 2025, fast-tracking the establishment of a Continental Free Trade Area and adopting a continent-wide Common External Tariff scheme.

The fertilizer industry is characterized by high levels of concentration along the supply chain. According to the International Fertilizer Development Center, nine countries control more than 50 percent of nitrogen (ammonia, urea) and phosphate (DAP/MAP) production capacity, while only five countries control 79 percent of potash (MOP) production capacity. Developing regions such as Africa south of the Sahara are also highly dependent on imported fertilizer. In addition, the level of fertilizer use in Africa south of the Sahara remains far below other developing regions (around 10kg.

Subsidies to promote fertilizer use have become a popular policy in Africa south of the Sahara, aimed at increasing the region’s lagging agricultural production. However, new research from Ghana , published in Food Security , suggest that fertilizer subsidies alone may not be enough to encourage greater fertilizer application and increase farm productivity.