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.