Working paper 28 - Trends and Patterns in Fertilizer Use by Smallholder Farmers in Kenya, 1997-2007

Author(s):  Ariga, Joshua; Jayne, Thom; Kibaara, Betty; Nyoro, James

 

Introduction

Increasing farm productivity is important in reducing poverty in rural agrarian societies. The structural transformation paradigm espoused by Johnston and Mellor (1961) and Mellor (1976) underscores the role of agricultural productivity growth in rural poverty reduction, demographic change, and economic development. This structural and demographic transformation was seen in many Asian countries during their Green Revolutions.

There is general agreement among researchers and policy makers that increased levels of fertilizer use, improved soil fertility and farmer management practices, and improved seed technologies are also required in Africa to generate these gains in farm productivity growth (Morris et al., 2007).

The current spike in world food, fuel and fertilizer prices has led a number of developing countries to re-assess their agricultural and food security policies. The cost of white maize in international markets, as of August 2008, is in the range of US$240 per ton,1 whereas its historical mean over the 2000-2006 period was roughly US$100 per ton. This means that the cost of landing maize in interior markets in Eastern and Southern Africa, factoring in substantially higher transport costs in 2008, is now in the range of US$400-450 per ton.

As a result of considerably higher import prices, the costs and risks of national and regional food production shortfalls are more severe now than they used to be. Increased fertilizer use is one of the important means by which households and nations can reduce the likelihood of having to rely on international markets for grain.

However, world fertilizer prices have risen even more so than food prices. After accounting for inland transport costs, the wholesale price of DAP fertilizer in Nakuru, Kenya has risen from Ksh 1,750 per 50kg bag in 2007 (US$538 per ton) to nearly Ksh 4,000 per 50kg bag (US$1,283 per ton) in 2008. These world price conditions, combined with the civil disruptions experienced in early 2008, are likely to break the steady upward trend in fertilizer use that Kenya has experienced over the past 15 years.

Governments in the region are searching for options to reduce their reliance on international food markets at a time when food prices are very high but when the soaring price of fertilizer has reduced farmers’ effective demand for it. Many smallholder farmers may also lack the ability to afford fertilizer without seasonal finance. If fertilizer needs are not met and sufficient imports cannot be mobilized, widespread hunger may result, with negative social and political consequences at the national (and international) level, particularly if hunger turns into famine. It therefore may not be surprising that the Government of Kenya has announced in early September 2008 a plan to set aside Ksh 11 billion (US$183 million) for fertilizer imports, which farmers will access at discounted prices.

However, the impact that a fertilizer subsidy program can make to mitigate hunger and poverty depend crucially on how the subsidy program is designed and implemented, and whether the other necessary conditions are put in place to enable farmers to benefit appreciably from increased use of fertilizer.

This study provides an empirical foundation to guide future fertilizer promotion policies and programs in Kenya. By obtaining a clear understanding of the farmer characteristics and geographic factors associated with commercial fertilizer purchase for use on maize, the major food security crop in the country, policy makers may be able to more accurately refine their programs to pinpoint where direct assistance may be necessary. The study tracks trends in fertilizer use among 1,260 small-scale farm households surveyed by Egerton University’s Tegemeo Institute in 1997, 2000, 2004, and 2007.2 The paper also compares fertilizer use rates in this data set with those of other recent surveys in Kenya to assess comparability. We also examine the correlation between household fertilizer use and indicators of welfare such as wealth and landholding size. In addition, we use fixed effects regression models to identify household and community factors associated with fertilizer use. Lastly, the study considers alternative policy strategies for maintaining smallholders’ access to fertilizer in the current context of substantially higher world fertilizer prices.

 

 

Trends and Patterns in Fertilizer Use by Smallholder Farmers in Kenya, 1997-2007