Crop yields in Africa south of the Sahara are generally low, in large part because of low fertilizer use. A recent study of six countries in the region showed that only 35% of farmers applied fertilizer. There are many possible reasons why farmers do not use fertilizer. They may be unaware of its effectiveness; or have degraded soils that do not respond to fertilizer; they may not have the cash to purchase it; or unpredictable rainfall may make such investments risky. Local fertilizer prices may also cut into potential profits for many farmers.
This post originally appeared on the IFPRI.org blog and the GSSP blog.
It is no secret that fertilizer subsidies are back in vogue across Africa south of the Sahara as the preferred tool for governments trying to boost incomes of poor smallholder farmers by increasing farm production and agricultural productivity. The financial burden of fertilizer subsidies is also widely recognized, exacerbated by the expense of improving the accuracy of targeting, as discussed in Jayne et al, 2018.
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.