Nutrient depletion concerns researchers and policy makers in the Sahel. A village-level programming model determines the size of fertilizer subsidy necessary to encourage farmers to apply the recommended dosage to their millet fields. Results indicate that subsidies would be extremely costly and less than half the expenditures accrue to the farm-household.Agricultural and Food Policy, Land Economics/Use,

Samake, Odiaba

Tiendrebeogo, Jean-Pierre

Wyatt, T.J.

English

Research Papers in Economics

1
Subsidized Fertilizer in the Sahel:  That is the Question
T J Wyatt
*, Odiaba Samaké
** and Jean-Pierre Tiendrébéogo
***
paper submitted to the American Agricultural Economics Association annual meetings
Nashville, Tennessee, 1-4 August, 1999
Abstract
Nutrient depletion concerns researchers and policy makers in the Sahel.  A village-level
programming model determines the size of fertilizer subsidy necessary to encourage farmers to
apply the recommended dosage to their millet fields.  Results indicate that subsidies would be
extremely costly and less than half the expenditures accrue to the farm-household.
* International Crop Research Institute for the Semi-Arid Tropics, Niamey, Niger and
corresponding author.
** Institut d’Economie Rural, Mopti, Mali.
*** Institut National de l’Environnement et de Recherches Agricoles, Tougan, Burkina Faso.
Copyright 1999 by T J Wyatt, Odiaba Samaké and Jean-Pierre Tiendrébéogo.  All rights reserved.  The
opinions expressed here are those of the authors and should not be construed as official statements by the
respective institutions.Subsidized Fertilizer in the Sahel:  What is the Cost?
T J Wyatt, Odiaba Samaké and Jean-Pierre Tiendrébéogo
Introduction
While rainfall in the West African Sahel is low and highly variable, agronomic studies
suggest that low soil fertility is the primary limiting factor to agricultural production (van
Keulen and Bremen, 1990).  Farmers have traditionally used two methods for maintaining soil
fertility:  fallow and the application of manure.  However, increasing population pressure has
led to a decrease in the fallow period and manure availability is limited by livestock numbers
and the extensive grazing practices.  Inorganic fertilizer, including imported chemical fertilizer,
appears to be the best means of restoring the nutrient balance, increasing crop yields and
raising rural incomes (Bationo, et al., 1998).  Use of inorganic fertilizers is extremely low,
however, especially since the devaluation of the franc CFA in 1993, and the withdrawal of the
state from the marketing channels.  In view of continued production shortfalls and fears of
land degradation, fertilizer subsidies, long an anathema to economists promoting structural
adjustment policies, are once again under consideration (Sanders; Sanders, Shapiro and
Ramaswamy).  This paper presents the results of a programming model of a typical Sahelian
village to determine the subsidy required to encourage the desired utilization of fertilizer and
its impact on household and village income.
The West African Sahel is an arid zone that stretches across the continent from
Senegal to Sudan.  Average rainfall for the zone ranges from 300 to 800 mm per year in a
single, three-month period.  The quantity of moisture varies greatly from one year to the next,
with coefficients of variation around 0.2 to 0.3.  The intraseasonal distribution is highly
variable as well, with mid-season dry periods often causing severe crop losses.  Yet even
under these conditions, significant results can be obtained with the use of chemical fertilizer,2
particularly nitrogen and phosphorus.  Fertilizer use in Africa, however, is the lowest in the
world, averaging only 5.3 kg/ha in the Sahel (van Reuler and Prins, 1993).  More importantly,
current farming practices are ‘mining’ the soil of nutrients, that is, more nutrients are being
taken out of the field in grain and crop residues (for animal feed) than are being replaced by
fallow, manure or natural replenishment (Bationo, et al., 1998).
There are a number of hypotheses as to why this degradation of a natural resource is
occuring.  A common explanation is poverty; poverty compels farmers to overexploit their
resources and limits their ability to utilize technologies such as fertilizers because of high cash
costs or risk aversion.  Under this hypothesis, a fertilizer subsidy would permit farmers to
make the appropriate investment, lead to an increase in income, and could eventually be
removed when farmers have amassed sufficient resources to maintain the investment.  Another
possibility is that farmers are unaware of the impact of fertilizer and a subsidy would
encourage more experimentation.  The subsidy could be removed when farmers had become
sensitized to the value of using fertilizers.  A third hypothesis is that fertilizer use is not cost-
effective given the price and availability of the input and the low value of the output.  In this
case, a fertilizer subsidy might encourage greater use, but removal of the subsidy would simply
result in farmers returning to their traditional practices
1.
The goal of this paper is to determine if a subsidy is necessary to encourage a profit-
maximizing farmer to use fertilizer on his or her millet fields and, if so, of what amount.  If
fertilizer use is profitable, we would find support for the first hypotheses that suggest market
constraints or lack of knowledge is the primary reason for low fertilizer use.  Temporary
fertilizer subsidies might then be an appropriate policy measure. If, however, fertilizer use is
found to be constrained by low returns, then we must consider carefully the costs of any
                                               
1 Inappropriate tenure systems that do not provide incentives for investments in land improvements are often
blamed, but inorganic fertilizer is not a long-term investment but a way of maintaining the immediate nutrient3
subsidy program that may not be effective in the long term.
Methodology and Data
We use a village-level non-linear programming model to examine the crop and
livestock management patterns of a typical Sahelian village.  The primary source for the data is
a multi-scale land-use characterization carried out as part of an on-going project to develop a
multi-scale decision support system.  The data consist of detailed biophysical descriptions,
including types of soil distinguished by local cultivators, production systems and socio-
economic data.  Households are grouped into three categories determined by the amount of
land and labor available.  Household demand for basic consumption goods are based on FAO
requirements.  Since farmers are not currently using fertilizer on their fields, on-station trial
results were used.  However, since farmers may lack complementary inputs, and the
interaction between manure use and fertilizer has not been examined, we reduce the expected
impact of fertilizer by 20 percent.
The key village with respect to this paper is Lagassagou, near Bankass, Mali in the
region of Mopti.  Household needs and resources are shown in Table 1.  The village is located
on a sandy plain to the south of the Dogon plateau and is a primary millet producing region.
There are 33 production units in the village which range from single households to groups of
households.  Infrastructure is limited.  There are two markets within walking distance of the
village, but transport of goods must be done by hand or by cart.  Within the village, exchange
is primarily limited to services:  labor or transport.  Most other goods are exchanged at the
weekly markets.  Labor can occasionally be exchanged with producers in other villages.
Fields are distinguished by distance from the village.  Lara fields are close to the
household while fields far from the village are called baracoum.  The distance increases labor
                                                                                                                                                 
balance.  Additions of organic material, such as manure, have longer lasting effects and are being practiced.4
time for agricultural activities, particularly for the application of organic material.  Animals are
usually kept near the household compound at night and the manure deposited directly on the
fields.  To apply significant quantities of manure to the baracoum requires collecting the
manure from around the compound and transporting it to the far fields.  For this reason, the
general pattern is that the lara is cultivated almost continually while the baracoum is
periodically left fallow.  There is little capital equipment used.  The light, sandy soils do not
require plowing; in fact, plowing can increase nutrient losses.  The primary equipment are
carts for transport.
The main crop of the region is millet, which is grown for both home consumption and
for sale.  Sorghum is occasionally planted in small depressions where water collects.
Groundnuts and cowpea are cultivated as cash crops.  The residue is also valuable as livestock
feed.  Fonio, sorrel and Bambara groundnut are minor crops.  The cropping season begins in
June or July with the rainy season.  Harvest occurs in November and December.  There is
frequently significant out-migration during the dry season.
The livestock system is equally low input.  Herds consist of cattle and small ruminants,
plus donkeys and horses for traction.  Animals primarily graze the areas left fallow and the
crop residue left in the fields.  During the rainy season, cattle are usually entrusted to local
herders who take them to pastures away from the cultivated areas, returning in about four
months.  Generally a few sheep are kept in a more intensive fattening regime and are sold on
the local market for the Tabaski holiday which this past year fell in March.
The major improvement of this model over previous efforts (Shapiro and Sanders,
1998; Coulibaly, et al., 1998) is that the crop and livestock systems are modeled together and
compete for some of the same resources, while also providing intermediate inputs to the other
system.  Migration opportunities, which compete for family labor time, are also included.
Cash investments will therefore flow to the activity with the highest return, not merely a5
positive return.  Sales of livestock, to fund purchases of monetary inputs, for example, must
weigh future losses in terms of meat, milk, and manure production against the benefits of
increased grain production.
Results and Discussion
The results of the base model are given in Table 2, showing area cultivated and
fertilizer application.  The model still requires some adjustment.  It greatly overstates the area
cultivated in groundnuts.  This may be due to considerations of risk, which are not considered
in this model.  Millet is more tolerant of drought, including dry periods within the growing
season.  There could also be an element of market risk.  Farmers may be unwilling to rely on
the market to supply their food needs.  Another consideration is that groundnuts are grown for
the residue which is used as forage.  The model suggests that the production units will be
primarily engaged in the fattening of cattle and sheep, purchasing animals when there is forage
and selling them at the beginning of the dry season.  What is not taken into account is that
restocking every year is only possible if there are animals available.
However, the results are suggestive, particularly those for production unit B, which
most closely resembles the actual situation.  A majority of land, particularly in the outer fields,
is cultivated in millet with no fertilizer.  Manure in the outer fields is also limited and the
fallow system is used to maintain soil fertility.  Income is approximately $1200 per person per
year; low, but still much higher than is observed.  The other types of production units do use
fertilizer, which suggests that it is economically viable and could be more so if farmers were
able to learn proper management techniques or to invest in the necessary complementary
inputs that would provide them with yields more similar to those obtained by researchers.  A
major impediment appears to be the cost of transporting the fertilizer from the market to the
village.  Fertilizer cost is not high in absolute terms, about $0.43 per kilogram.  However,6
transport costs, including the cost of a cart and labor time, are over 30% of the price leaving a
shadow price of $0.64 per kilogram.
A fertilizer subsidy could thus be seen to encourage farmers to experiment with using
fertilizer, increasing their management skills and increasing the returns.  However, as shown in
Table 3, the actual impact of a subsidy may be quite limited.  For production units of type B,
even a 40% reduction in price only results in an application rate of 17.5 kg/ha on millet fields
and increases application on groundnuts to 21.7 kg/ha.  This is still far below the
recommended levels.  Even more surprising is that the subsidy has no measurable impact of
household income, despite an expenditure of about $52 per household.  This means that if
farmers need complementary inputs, such as additional labor for weeding or additional manure
to maintain levels of organic matter, that the subsidy does not provide additional revenues
from which to make the necessary investments.
In fact, the benefits accrue to the larger households that are more involved in cash
cropping, production units A.  This type of household is probably more representative of
households in the wetter, southern regions of West Africa and highlight an additional problem
with subsidies.  Even were the subsidy targeted to the millet producing areas, there would be
significant leakage to other areas.  Given that most of West Africa has a common currency,
the West African Franc (CFA), there could even be significant international leakage of benefits
to the coastal countries like Côte d’Ivoire.
Finally, the costs of a subsidy could be very high.  The results of the model suggest
that the direct costs, in terms of the actual subsidy, would be approximately $7.50 per ha
cultivated.  The target area of millet production is approximately 10 million hectares
(ICRISAT, 1996).  This cost of $75 million dollars does not include administration costs or
costs of leakage to other areas, which could also be significant.  Given that the impact appears
so limited, one has to question whether the expense could be justified for the cash-poor7
governments of the region.
Conclusion
This paper has presented the results of a programming model to determine the impact
of a fertilizer subsidy on a typical West African village.  It is found that the impact is minimal,
both in terms of additional fertilizer application and increased household income.  Many of the
benefits will accrue to producers in cash-crop producing areas that are already using fertilizer.
The costs of a fertilizer program will be high, and higher still if one takes into account
administrative costs.  The effectiveness of such a program, both for improving soil fertility
management and household income, is doubtful.8
References
Bationo, A., F. Lompo and S. Koala.  (1998)  Research on nutrient flows and balances in
West Africa:  State-of-the-art.  Agriculture, Ecosystems & Environment, 71:19-35.
Coulibaly, O., J. Vitale, and J. Sanders.  (1998)  Expected effects of devaluation on dereal
production in the Sudanian region of Mali.  Agricultural Systems, 57(4):489-503.
ICRISAT.  (1996)  The world sorghum and millet economies:  Facts, trends and outlook.
International Crop Research Institute for the Semi-Arid Tropics, Food and Agriculture
Organization, Patencheru, Andhra Pradesh, India.
Shapiro, B., and J. Sanders.  (1998)  Fertilizer use in semiarid West Africa:  Profitability and
supporting policy.  Agricultural Systems.
van Keulen, H., and H. Bremen.  (1990)  Agricultural development in the west African Sahel
region:  a cure against land hunger?  Agriculture, Ecosystems & Environment, 32:177-197.
van Reuler, H., and H. Prins.  (1993)  The role of plant nutrients for sustainable food crop
production in sub-Saharan Africa.  VKP, Leidschendam, Netherlands.9
Table 1.  Household and village requirements and resources.
UP(A) UP(B) UP(C) Village
Population 39 10 5 735
Monthly food requirements
    cereal (kg) 585 150 75 11025
    milk (l) 19.5 5.0 2.5 367.5
Resources
    labor 21 5 3 393
    land (ha) 19.7 14.9 4.9 503.7
        lara 3.0 2.9 1.0 85.8
        baracoum 16.7 12.0 3.9 417.9
Production units (UP) 15 12 6 33
Table 2.  Base results, area cultivated and fertilizer application.
UP(A) UP(B) UP(C) Total
lara
groundnut (ha) 3.0 2.3 0.9 78.3
fertilizer (kg/ha) 65 80 80
baracoum
millet (ha) 0.7 3.3 0.8 54.0
fertilizer (kg/ha) 15 0 40
groundnut (ha) 9.5 2.6 1.3 180.7
fertilizer (kg/ha) 40 13.4 40
total fertilizer (kg) 585 220 156 12,345
income ($USD) 83,775 11,809 6,533
Table 3.  Results of subsidy ($0.715/kg), area cultivated and fertilizer application.
UP(A) UP(B) UP(C) Total
lara
groundnut (ha) 3.0 2.4 0.9 78.8
fertilizer (kg/ha) 65 80 85.4
cowpea (ha) 0.1 0.4
fertilizer (kg/ha) 120
baracoum
millet (ha) 0.7 3.8 1.0 60.9
fertilizer (kg/ha) 21.9 17.5 40
groundnut (ha) 9.5 2.1 1.1 174.2
fertilizer (kg/ha) 40 21.7 40
total fertilizer (kg) 589 299 171 13,452
cost ($USD) 103 52 30 2,360
D income ($USD) 156 0 0

Agricultural development in the west African Sahel region: a cure against land hunger?

Expected effects of devaluation on dereal production in the Sudanian region of Mali. Agricultural Systems,

Fertilizer use in semiarid West Africa: Profitability and supporting policy. Agricultural Systems.

Research on nutrient flows and balances in West Africa:

The role of plant nutrients for sustainable food crop production in sub-Saharan Africa.

The world sorghum and millet economies: Facts, trends and outlook. International Crop Research Institute for the Semi-Arid Tropics, Food and Agriculture Organization, Patencheru, Andhra Pradesh,

SUBSIDIZED FERTILIZER IN THE SAHEL: THAT IS THE QUESTION

SUBSIDIZED FERTILIZER IN THE SAHEL: THAT IS THE QUESTION

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