Conclusions

Many areas of smallholder cultivation in sub-Saharan Africa have been systematically experiencing reductions in soil organic carbon levels, particularly where continuous maize cultivation without legume rotations and/or application of inorganic or organic fertilizer is common (Shepherd & Soule, 1998; Drechsel et al., 2001; Tittonell et al., 2005; Lal 2006; Marenya & Barrett 2009). Low soil organic carbon stocks are known to affect plant uptake of nutrient supplies and figure into low-responsiveness of yields to nitrogen supply in some areas. Farmers in such areas are much less likely to find fertilizer investments to be economically attractive, regardless of how well fertilizer markets are performing. Because of its role in promoting greater crop biomass (including roots), inorganic fertilizer is usually a crucial component of a sustainable agricultural intensification strategy, and its use will need to rise rapidly to arrest the land degradation processes already evident in areas where the land frontier has been reached and where continuous cultivation has become the norm.
This paper has assembled evidence on the ways in which maize yield responses to inorganic fertilizer are affected by soil organic carbon and other factors. We have shown that the marginal product of nitrogen is positively associated with both soil organic carbon stocks (measured as active carbon), as well as by seasonal rainfall. When farmgate prices for maize and fertilizer are incorporated into calculations of average and marginal cost-benefit ratios, we find that economic returns – as measured by MVCR and AVCR – drop drastically over price-ratio ranges that are representative of those likely faced by many smallholders in Tanzania. For example, assuming a price ratio of 0.15, only 22% to farmers could utilize fertilizer profitably (using AVCR>2). However, even under more favorable assumptions, the high year-to-year variability around these expected returns would discourage many farmers from investing in fertilizer even if it were profitable to do so on average across all years. Our results indicate that the sensitivity of fertilizer profitability to such outcome uncertainty will be to be particularly acute in areas of depleted organic matter.
An important implication of our analysis is the importance of investments and policy interventions which address the systematic depletion of soil organic carbon stocks. This study adds to the growing evidence that cereal crop response to fertilizer requires that attention to be paid to soil health, as indicated by active soil carbon. There have been previous calls by soil scientists and economists for integrated soil fertility management to complement inorganic fertilizer, yet few previous studies have examined this at scale. Our research, conducted across a broad range of soil types and market contexts across Tanzania, reasserts the urgency of this proposition to better inform discussions of how to stimulate fertilizer investments by African smallholders. Farmer incentives to make such investments will be promoted by efforts to raise the agronomic efficiency of fertilizer sufficiently for fertilizer to be profitable.