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Are fertiliser subsidies necessary? Yes, but…

Many African farm households depend on land cultivated so many times that its fertility is hugely reduced. Smallholder farmers must consistently raise the productivity of their land to escape from poverty and produce enough food for their family.

Improved seeds can help, but unless the crop is well fed, it will never reach its potential. Purchased fertiliser is often essential but is one of the most costly cash inputs for poor farmers. Furthermore:

  • Some isolated farmers have difficulties reaching fertiliser suppliers.
  • Farmers are often unwilling to risk buying additional inputs unless they have a guaranteed market for their produce.
  • Fertiliser recommendations typically ignore the high variation in soil and climatic conditions. Consequently, the yield response to fertilisers often declines, reducing profitability.
  • Blanket fertiliser subsidies (a subsidy on the price of fertiliser) simply obscure these problems and inefficiencies at enormous and unnecessary expense.

In 1998, with Malawi facing a food crisis, the Universal Starter Pack programme gave every smallholder enough appropriate maize seeds and best quality fertiliser to plant 0.1 hectares of land (an area-based subsidy). For two years, maize production:

  • increased by an average of 125-150 kilos per household
  • reached approximately 2.5 million tons each year - 500,000 tons higher than ever before or since, and 67 percent higher than the twenty-year average.

In terms of cost effectiveness, the programme performed extremely well compared to blanket fertiliser subsidies and subsidised commercial food imports. Compared to food aid, the programme rewarded initiative and good husbandry, facilitating development rather than dependence.

As a long-term development plan, this approach provided a reliable exit strategy. However, after two years, the programme changed. Instead of providing seeds and fertiliser best suited to local environmental and economic circumstances (best bets), the programme provided whatever was cheap and available. This change aimed to help very poor people produce at least some extra food, but the programme was no longer a development tool to reduce chronic food insecurity. The programme changed because the original pack was seen by key donors as disrupting agricultural inputs markets. In fact, few recipients were involved with this market as they were too poor.

Starter Packs should still be considered as an alternative to blanket fertiliser subsidies. To improve the programme, the team behind the Starter Pack programme recommended building on the Kenya-based Farm Inputs Promotion Programme (FIPS), formerly the Sustainable Community Orientated Development Programme, and:  

  • Making small packets of improved seeds and fertiliser available through local dealers so that farmers can purchase inputs when they have cash available. A recent review of FIPS in Kenya showed this helps farmers diversify their incomes as food security increases.
  • Supporting well-organised farmer field schools enables farmers to experiment with new technologies (such as best seed and fertiliser combinations) and share experiences in a relatively risk-free situation.

Sadly, these developments were never implemented, largely due to the decision to change the programme to a ‘safety net’ rather than a long-term development project. The revised safety nets programme has now been terminated; an enhanced ‘starter packs’ proposal is being developed (including components from FIPS).

Source(s):
'The origin and the concept of the starter pack', by Malcolm Blackie and Charles Mann, pages 15-28 in 'Starter packs: a strategy to fight hunger in developing countries', CABI: Wallingford, edited by Sarah Levy, 2005
'Poverty, AIDS and Hunger in Malawi', MacMillan Palgrave: London, by Anne Conroy, Malcolm Blackie, Alan Whiteside, Justin Malawezi and Jeffrey Sachs, 2005

id21 Research Highlight: 15 March 2006

Further Information:
Malcolm Blackie          
9 Meadow Farm Drive
Cringleford
Norwich, NR4 6TR
UK

Tel: +44 (0)1603 506440
Fax: +44 (0)1603 506440
Contact the contributor: mblackie@netcom.co.uk

Other related links:
'Can fertiliser subsidies help farmers out of poverty?'

'Maize production in Zambia'

'Fighting hunger with free agricultural inputs: the experience of Starter Packs in Malawi'

'Maize farming in Kenya: where did it go wrong?'

'Are fertiliser subsidies right for African agriculture?'

'Achieving food security: what next for sub-Saharan Africa?'

Views expressed on these pages are not necessarily those of DFID, IDS, id21 or other contributing institutions. Unless stated otherwise articles may be copied or quoted without restriction, provided id21 and originating author(s) and institution(s) are acknowledged.

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