Thursday, 24 July 2008

“Smart” fertiliser subsidy programmes in Africa

A study which was carried out for the Regional Strategic Agricultural Knowledge Support System (Re-SAKSS) for Southern Africa, based at International Water Management Institute, Pretoria, South Africa. argues that several points should be considered before implementing fertiliser subsidies.

These include:
  • they may not be the best option; for example, subsidies targeted to particular crops such as maize may reduce output of other food crops such as cassava, therefore reducing the net food supply response
  • fertiliser subsidies have a questionable recordas a tool for increasing overall agricultural productivity, especially for small, poor farmers
  • low or no fertiliser use by many smallholders is explained not just by credit constraints that limit acquisition, but also by the risk of crop failure, with resulting financial losses and consumption shortfalls. The lack of insurance causes inefficiency in production choices, therefore, recent trials of weather-indexed insurance are a promising potential solution for the risk problem
Drawing on experiences of Zambia and Malawi, the authors suggest several practical guidelines for how to maximize the effectiveness of fertiliser subsidies in meeting important national objectives such as improved national food security, alleviation of hunger, and equity.

June 30, 2008
Fertilizer Subsidies and Sustainable Agricultural Growth in Africa: Current Issues and Empirical Evidence from Malawi, Zambia, and Kenya Isaac Minde, T.S. Jayne, Joshua Ariga, Jones Govereh, and Eric Crawford - 26 pages