Fertilizer Subsidies in Sub Saharan Africa

Opinions about the role of fertilizer subsidies in spurring agricultural development in Sub-Saharan Africa have fluctuated significantly over the past five decades. Many experts believe that fertilizer subsidies represent an essential method for achieving long term food security in Sub-Saharan Africa, while providing social support to Africa's poorest subsistence farmers. Yet previous universal subsidy schemes enjoyed only moderate success, raising concerns about whether the market distortions subsidies introduce can ever lead to a sustainable agricultural system. New practices in creating more targeted subsidies may be the key to achieving durable success.

Despite the potential benefits to crop yields, inorganic fertilizer application in Sub-Saharan Africa lags behind other developing regions. Average application in Sub-Saharan Africa is less than 10 kg per hectare, while the average application in Latin America and South Asia is nearly 140 kg per hectare. Sub-optimal or inefficient fertilizer use may result from farmers’ incomplete knowledge of its benefits or proper application techniques, inadequate (liquid) funds, or aversion to the risk associated with investing in a new input. Proponents of subsidies argue that they can help to mitigate these circumstances and bring fertilizer use up to optimal levels.

The implementation of subsidy programs may also be argued for equity reasons. Like other forms of social support (health, education spending) subsidies represent a redistribution of funds within a society, and can be an effective way to target subsistence farmers (a disproportionately large amount of Sub-Saharan Africa’s poor).

Finally, subsidies may also create positive externalities, such as decreased soil erosion from increased plant growth. These external benefits may cause fertilizer to be undervalued in the market transaction, and thus represent another argument for government intervention through subsidies.

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