Is increasing inorganic fertilizer use for maize production in SSA a profitable proposition? Evidence from Nigeria

Abstract

Inorganic fertilizer use across Sub-Saharan Africa is generally considered to be low. Yet, the notion that fertilizer use is too low is predicated on the assumption that it is profitable to use rates higher than currently observed. There is, however, limited empirical evidence to support this. Using a nationally representative panel dataset, this paper empirically estimates the profitability of fertilizer use for maize production in Nigeria. We find that fertilizer use in Nigeria is not as low as conventional wisdom suggests. Low marginal physical product and high transportation costs significantly reduce the profitability of fertilizer use. Apart from reduced transportation costs, other constraints such as soil quality, timely access to the product, and availability of complementary inputs such as improved seeds, irrigation and credit, as well as good management practices are also necessary for sustained agricultural productivity improvements.

Agriculture in Africa – Telling myths from facts: A synthesis

“…While the relatively high inorganic fertilizer application rates observed in Nigeria are exceptional across the LSMS-ISA countries (Sheahan and Barrett, 2017), the findings by Liverpool-Tasie et al (2017), which, in Nigeria, are also confirmed for rice (Liverpool-Tasie, 2016), underscore the need to better understand the agro-ecological and market conditions under which inorganic fertilizer use in particular, and other agricultural technologies in general, are profitable. Also, in the absence of adequate ex post coping mechanisms, still higher returns will be needed for fertilizer (and other modern) input use to be profitable or optimal (Dercon and Christiaensen, 2011).…”

“…Binswanger-Mkhize and Savastano (2017) then assess the current input application rates within the macro-context of Africa’s current population density and market access. This is followed by a case study of the actual profitability of fertilizer use in Nigeria (Liverpool-Tasie et al (2017)), drawing attention to a core micro-economic principle driving input adoption, namely profitability. The fourth paper explores the potential for increasing crop output from closing the gender productivity gap (Palacios-Lopez et al, 2017b).…”

“…There is, however, surprisingly limited empirical evidence to support this. Liverpool-Tasie et al (2017) examine the profitability of fertilizer use in maize production in Nigeria, where fertilizer use is already relatively high. Production theory suggests two criteria to assess profitability of input use.…”

Short-Term Effects of Tillage Intensity and Fertilization on Sunflower Yield, Achene Quality, and Soil Physicochemical Properties under Semi-Arid Conditions

“…Furthermore, some studies emphasized associated problems with the inappropriate application and improper management of inorganic fertilizers, including increased consumption of fossil fuels, leach out of soil, pollution of water basins, destruction of micro-organisms and advantageous insects, increased sensitivity of the crop to diseases, and reduced soil fertility, all of which tend to impose irreparable damage to the overall system. On the other end of the spectrum, organic fertilizers seem to be capable of addressing these problems [15,16].…”

“…Apparently, a major concern in semi-arid regions is the further loss of SOM and, hence, deteriorated fertility. A number of factors contribute to reduced crop residue mulch and, hence, loss of SOM; these include overgrazing, burning the residues, termites, sparse vegetation, limited moisture, and over-ploughing [16,17].…”