Resource information
Inorganic fertilizer use across
Sub-Saharan Africa is generally considered to be low. Yet,
this belief is predicated on the assumption that it is
profitable to use rates higher than currently observed.
However, there is little rigorous empirical evidence to
support this notion. Using a nationally representative panel
data set, and with due recognition of the role of risk and
uncertainty, this paper empirically estimates the
profitability of fertilizer use for maize production in
Nigeria. The analysis finds that inorganic 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.
The paper finds evidence that strategies to reduce
transportation costs are likely to have a much larger effect
on the profitability of fertilizer use than fertilizer
subsidies. Apart from reduced transportation costs, other
constraints such as timely access to the product;
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.
