Motivation

Staple crop yields in sub-Saharan Africa (SSA) remain very low by international standards, with yield gaps on the order of 80% (van Ittersum et al. 2017). Inorganic fertilizer is widely agreed to be the technology with the greatest potential to raise yields in SSA’s smallholder systems (Vanlauwe et al., 2014; Holden 2018). Inorganic fertilizer also greatly promotes crop biomass and is therefore an important component of an integrated and sustainable soil fertility management strategy.
Nitrogen is the main constraining nutrient for cereal crop performance across most environments, both in terms of yield level and yield stability (Vanlauwe et al., 2011). Indeed, nitrogen has been identified as one of the grand challenges of the 21st Century given its pivotal role in food production, and nowhere is this more important than in sub-Saharan Africa where a strong negative relationship has been observed between soil nitrogen balances and population density (Drechsel et al., 2001). Yet the relatively low uptake of nitrogen fertilizers by SSA smallholders indicates important constraints, which are not yet fully understood.
The large spatial heterogeneity in fertilizer usage in SSA (Sheahan & Barrett 2017) suggests that both market factors (e.g. farmgate crop/fertilizer price ratios) as well as environmental factors (such as soil and rainfall) may play an important role. Yield response – i.e. the marginal or average physical product of fertilizer – is often low and highly variable for smallholder staples producers, resulting in low levels of profitability of fertilizer use when farm-gate crop and fertilizer prices are applied (Xu et al., 2009; Marenya & Barrett, 2009; Sheahan et al., 2013; Jayne & Rachid, 2013; Liverpool-Tasie et al., 2017; Burke et al., 2017; Koussoube & Nauges, 2017).11See Jayne et al. (2018) for a recent review of over 20 studies estimating the profitability of applying inorganic fertilizer on maize in various African locations. Relatedly, fertilizer is not profitable for many farmers even where the average benefits are positive and relatively large, given differences in management ability and other factors that vary across plots and households (Suri, 2011). Fertilizer responses in many areas may be limited by depleted soil organic matter (Marenya & Barrett, 2009, Dreschel et al., 2001), soil acidity (Burke et al., 2017), and other factors. Risk-averse farmers are especially likely to forgo expected gains in the face of uncertainty around the performance or profitability of a given technology (Emerick et al., 2016; Magruder, 2018). Disentangling the patterns of fertilizer responses may help us to better understand how to design area-, household-, and plot-specific interventions to overcome constraints to the profitable use of fertilizer in African smallholder production systems.
This study identifies key soil-related drivers of maize yield and maize yield response to nitrogen fertilizers for Tanzanian smallholders. Our particular emphasis is on organic carbon, a particularly important component of soil fertility (Lal 2006; Nord & Snapp 2020). We use two-wave panel data on farmer-managed plots in 25 maize-producing districts in Tanzania. In addition to the standard farmer-, farm- and community-level characteristics typically included in such analyses, our dataset features well-measured yields (through yield sub-plot crop cuts at harvest time), plot-level soil chemical analysis, and detailed plot-level agronomic management information. We find that estimated maize yield response to N is similar to other empirical studies from the region based on farmer-managed fields and that they are strongly conditioned by both rainfall and soil organic carbon stocks. Our production function estimates indicate that the marginal product of nitrogen increases by 25% when moving from the 25thto the 75th percentile of available carbon in our sample. Furthermore, the variability around these expected returns are high. After factoring in local input and output prices, profitability assessments indicate relatively low returns to fertilizer investments: less than half of the sample have AVCR>2 under our most favorable estimation results and very conservative estimates of farmgate price ratios. Our results also highlight differences in conclusions about the profitability of fertilizer use on farmers’ own fields and management conditions vs. studies relying on farm trials and demonstration plots (e.g., Jama et al., 2017), which tend to benefit from researcher management protocols that many smallholder farmers may not be able to replicate (Snapp et al., 2014). Our results highlight the importance of considering the factors that condition fertilizer response (and profitability) from the farmer’s standpoint when designing agricultural intensification programs and investment strategies. Our analysis concludes that agricultural intensification strategies based on raising the intensity of fertilizer use are unlikely to lead to widespread adoption if the variation in agronomic and economic returns is not accounted for and if the sources of low active soil carbon are not also addressed.
The rest of this paper is organized as follows. After describing our setting, data and empirical estimation strategy, we present estimation results for agronomic and economic returns to fertilizer investments, in turn. We discuss these results and their implications for sustainable intensification strategies, concluding with key messages for policymakers and recommendations for further research.