Trends and Patterns in Fertilizer Use by
Smallholder Farmers in Kenya,
1997-2007
Joshua Ariga, T.S. Jayne,
Betty Kibaara, and J.K. Nyoro
Paper presented at the Egerton University Tegemeo Institute Agricultural Policy
Conference,
17 September 2008, Nairobi, Kenya
Intensity of
fertilizer
use
(1996-2002)
< 25 kg/ha
> 25 kg/ha
% growth in fertilizer use intensity (kg/ha cultivated)
(mean 1996-2002 / mean 1990-95)
< +30%
DRC
(0.5, -47%)
Angola
(0.7, -69%)
Niger
(0.9, +5%)
Guinea
(2.0, -4%)
Burundi
(2.3, -6%)
Madagascar (2.9, -8%)
Mauritania
(4.0, -64%)
Tanzania
(4.8, -47%)
Gambia
(5.2, +15%)
Nigeria
(5.6, -73%)
Burkina Faso (5.9, -28%)
Zambia
(8.4, -34%)
Mali
(9.0, +7%)
Swaziland (30.5, -40%)
Malawi (30.8, +9%)
Zimbabwe (48.3, +9%)
> +30%
Uganda
Rwanda
Mozambique
Ghana
Chad
Cameroon
Togo
Cote d’Ivoire
Botswana
Senegal
Ethiopia
Benin
Lesotho
(0.6, +237%)
(1.8, +89%)
(3.2, +142%)
(3.6, +68%)
(4.3, +93%)
(5.9, +77%)
(7.0, +30%)
(11.8, +53%)
(11.8, +294%)
(13.2, +67%)
(14.4, +71%)
(17.6, +76%)
(23.2, +35%)
Kenya (42.8, +40%) between
2007 and 1997
2
Kenya fertilizer use, 1990-2008
500000
metic tonnes
400000
300000 fertilizer consumption
200000
projected
for 2008
commercial imports
100000
donor imports
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
3
Objectives:
1. Trends in fertilizer use on maize
2. Factors driving the increase in fertilizer
use, 1997-2007
3. Household characteristics associated
with fertilizer use
4. Impact on maize yields
5. Policy implications in light of higher food
and fertilizer prices
4
Objective 1
Trends in Fertilizer Use on Maize
5
% of Small-scale Farmers Using Fertilizer on Maize
Agro-regional zone
1996
1997
2000
2004
2007
% of households using fertilizer on maize
Coastal Lowlands
0
0
3
4
14
Eastern Lowlands
21
27
25
47
43
Western Lowlands
2
1
5
5
13
Western Transitional
39
41
70
71
81
High-Pot. Maize Zone
85
84
90
87
91
Western Highlands
81
75
91
91
95
Central Highlands
88
90
90
91
93
Marginal Rain Shadow
6
6
12
11
16
Total Sample
56
58
64
66
70
6
Fertilizer Dose Rate (kgs/acre) on maize
Agro-regional zone
1997
2000
2004
2007
Dose rate (kgs/acre) on fertilized maize fields
Coastal Lowlands
11
5
3
7
Eastern Lowlands
10
18
15
16
Western Lowlands
24
14
10
12
Western Transitional
54
48
62
71
High-Pot. Maize Zone
65
67
74
75
Western Highlands
31
36
46
47
Central Highlands
68
64
64
58
Marginal Rain Shadow
12
15
43
43
National sample
56
55
60
59
7
Objective 2
Factors driving the increase in
fertilizer use, 1997-2007
8
4 Reasons for the Upsurge in
Fertilizer Use in Kenya
1. GoK has maintained a stable fertilizer
policy stance since 1990




Eliminated import licensing quotas
Eliminated foreign exchange controls
Eliminated retail price controls
From 1990 to 2007, no market uncertainties
introduced by large-scale subsidy programs
9
Farmer fertilizer purchases, Malawi
Purchases
Subsidised*
Unsubsidised
Total
350
'000 tonnes
300
250
200
150
100
50
0
1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/6 2006/7
10
4 Reasons for the Upsurge in
Fertilizer Use in Kenya
2. In response to stable input policy
environment, private sector investment
in fertilizer distribution expanded
rapidly



10-11 importers
500 wholesalers
8,000 retailers
11
4 Reasons for the Upsurge in
Fertilizer Use in Kenya
3. In response to expansion of input
stockists, small farmers’ are now much
closer to fertilizer retailers




1997:
2000:
2004:
2007:
7.4kms
5.6kms
3.7kms
3.2kms
12
Reasons for the Upsurge in
Fertilizer Use in Kenya
4. Greater competition among importers
and wholesalers has led to declining
fertilizer marketing costs
13
Price of DAP (Di-Ammonium Phosphate) in Mombasa
and Nakuru (nominal Shillings per 50kg bag)
nominal Ksh per 50kg bag
4000
3000
2000
Nakuru, wholesale
1000
Mombasa, cif
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
14
Price of DAP (Di-Ammonium Phosphate) in Mombasa
and Nakuru (constant 2007 Shillings per 50kg bag)
constand
nominal
2007
KshKsh
per per
50kg
50kg
bag bag
4400
4000
4000
3600
3000
3200
Nakuru, wholesale
2800
2000
2400
Nakuru, wholesale
2000
1000
1600
Mombasa, cif
Mombasa, cif
1200
800
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
15
Why have real fertilizer marketing
margins declined in Kenya?
1. Greater competition has led to lower margins
2. Emergence of brokerage services for exploiting
opportunities for cheaper backhaul transport, e.g.,
linking upcountry fertilizer supply with trucks
transporting cargo from Rwanda and Congo to the port
of Mombasa;
3. private importers are increasingly using international
partners to source credit at lower interest and financing
costs than are available in the domestic economy
4. mergers between local and international firms in which
knowledge and economies of scope are being passed
onto local firms to achieve cost savings in local
distribution (e.g., Mea partnering with CONAGRA) 16
Objective 3
Household characteristics associated
with fertilizer use
17
Relationship between fertilizer use per acre and wealth
Table 1a: Zone 2 Fertilizer rate vs. Household Acres
0 50
0 20 40 60 80
100 150 200
100
Table 1a: Zone 1 Fertilizer rate vs. Household Acres
20
Total acres
Scatter
30
40
0
Fertilizer rate per acre
300
10
lowess
10
20
Total acres
Scatter
30
40
lowess
Table 1a: Zone 4 Fertilizer rate vs. Household Acres
100
200
Table 1a: Zone 3 Fertilizer rate vs. Household Acres
0
0 50
Fertilizer rate per acre
100 150 200
0
0
10
20
Total acres
Scatter
30
lowess
40
0
10
20
Total acres
Scatter
30
lowess
40
18
Relationship between household wealth and fertilizer use
Household Wealth Quartiles
1
2
3
(poorest)
Assets (Kenya Shillings)
Dose Rate (kgs/acre) users
only
4
(Highest)
2,982
12,106
25,633
166,919
59
60
66
68
19
% of Small-scale Farmers Using Fertilizer on Maize
Agro-regional zone
1996
1997
2000
2004
2007
% of households using fertilizer on maize
Coastal Lowlands
0
0
3
4
14
Eastern Lowlands
21
27
25
47
43
Western Lowlands
2
1
5
5
13
Western Transitional
39
41
70
71
81
High-Pot. Maize Zone
85
84
90
87
91
Western Highlands
81
75
91
91
95
Central Highlands
88
90
90
91
93
Marginal Rain Shadow
6
6
12
11
16
Total Sample
56
58
64
66
70
20
Objective 4
Impact on maize yields
21
17.5
Maize Yields by Seed-Fertilizer Combination Group 1997-2007
14.2
14.1
14.0
13
13.4
11.4
10.5
8.0
8
8.4
9.4
9.0
6.3
6.0
4
1
6.1
5.0 5.0
2.9
1
2
3
Neither
2
3
4
Trad. & fert
1
2
3
4
Hybrid & no Fert
1
2
3
4
combo
Key for Bars: 1=1997 2=2000 3=2004 and 4=2007 Season
Not counting other crops grown on intercropped maize fields
22
Maize Yields by Seed-Fertilizer Combination Group 1997-2007
17.5
17.6
16.4
15.9 16.2
14.9
13
13.1 13.1
12.3
11.6
10.6
8
8.2
8.0
8.6
7.4
7.1
4.6
1
2
3
Neither
4
1
2
3
4
Trad. & fert
1
2
3
4
Hybrid & no Fert
1
2
3
4
combo
Key for Bars: 1=1997 2=2000 3=2004 and 4=2007 Season
Yield includes quantity of other crops produced on intercropped fields
converted to maize equivalents by price ratios
23
Objective 5
tonne maize / tonne DAP fertilizer price ratio
Implications for policy under current
world price conditions
.8
.7
.6
.5
.4
.3
.2
.1
1994 1996 1998 2000 2002 2004 2006 2008
24
Profitability of using fertilizer:
Farm-gate Maize Price
Δkg maize
---------------------------------- * -----------Farm-gate Fertilizer Price
Δkg fert
25
1. Reduce costs of supplying fertilizer
to farm gate
•
•
Port costs at Mombasa
Improve rail / road infrastructure
2. Promote viable farm extension /
service provision to raise efficiency
of fertilizer use
What about input subsidies?
26
Summary of research evidence about
fertilizer subsidies in Africa:
 can help to raise production, but little
sustained benefit after subsidies are
withdrawn

(e.g., Zambia, Malawi)
 Benefits tend to be disproportionately
captured by better-off farmers, unless
near universal coverage
 Costly – foregone payoffs from
alternative public investments
27
Zambia
Total
Income
Fertilizer source:
‘000 kwacha per
capita
Households not acquiring
fertilizer:
266
Assets
173
Landholding
size
ha per capita
.15
28
Source: Govereh et al, 2006
Zambia
Total
Income
Assets
Fertilizer source:
‘000 kwacha per
capita
Landholding
size
ha per capita
Households not acquiring
fertilizer:
266
173
.15
Cash purchases from private
retailers:
774
342
.20
29
Source: Govereh et al, 2006
Zambia
Total
Income
Assets
Fertilizer source:
‘000 kwacha per
capita
Landholding
size
ha per capita
Households not acquiring
fertilizer:
266
173
.15
Cash purchases from private
retailers:
774
342
.20
Government Fertilizer Support
Program (50% subsidy)
804
425
.23
30
Source: Govereh et al, 2006
Budget allocation to Agricultural Sector in
Zambia: ZMK465 million in 2005
Infrastructure
2%
Irrigation Development
3%
Food Security Pack &
EDRP
12%
Personnel Emoluments
20%
Food Reserve Agency
Maize Marketing
15%
Operational funds
11%
Fertilizer Support Program
37%
31
IFPRI review of rate of return studies:
Subsidies
Investments
- research & extension
Returns
Negative – 12%
35% to 70%
- roads
20% to 30%
- education
15% to 25%
- communications
10% to 15%
- irrigation
10% to 15%
If we believe these findings, they have major implications
32
If the decision has already been made to
provide input subsidies:
Four insights (from experience in Malawi and
Zambia):
33
Insight #1:
1. Targeted input voucher program less
likely to undercut commercial input
distribution system
34
Insight #2:
Ensure that input subsidies are pro-poor
by targeting the poorest farmers:
– Will generate greatest food security and
poverty reduction impact
– No evidence that fertilizer use is more
efficient on large farms than small farms
– Achieves more maize output per unit of
subsidized fertilizer distributed (evidence
from Malawi and Zambia)
35
Insight #3:
If subsidy programs are to be implemented,
design them in ways that involve the full range
of private importers, wholesalers, and retailers.
Providing tenders to only 2-3 firms can:
– entrench their position in the market
– cause other firms to cease making investments in the
system or drop out altogether
– lead to a more concentrated input marketing system
and restricted competition when the input subsidy
program ends
36
Insight #4:
Recommend reduced rates of fertilizer
application – 100kg per acre is
certainly not optimal in most parts of
Kenya.
37
Summary of Main Findings
1.
nationwide, the % of farmers using fertilizer on maize
has increased from 56% in 1996 to 70% in 2007
Fertilizer dose rates on maize (maize fields receiving
fertilizer) have increased only slightly, from 56kg/acre
in 1997 to 59kg/acre in 2007
Fertilizer use has increased especially rapidly on the
intercropped fields, and less so on monocropped fields
The dominant factor influencing smallholder
households’ decisions to use fertilizer on maize is
location:
2.
3.
4.
•
•
Over 90% of smallholders use fertilizer on maize in three of
the zones surveyed: the High Potential Maize Zone; Western
Highlands, and Central Highlands.
Less than 30% use fertilizer on maize in Coastal Lowlands,
Marginal Rain Shadow.
38
Summary of Main Findings
5. Total area under maize has remained largely
constant over the decade
6. maize yields increased by 20% between 19972007 period, which is correlated with the rise in
fertilizer use.
7. Paying attention to the different types of maize
production technologies and maize cultivation
techniques is important to carefully control for
confounding factors when examining trends in
maize yields in Kenya
39
Thank you
http://www.aec.msu.edu/fs2/
Table 1: Sampled districts in agro-ecological zones
Agro-ecological zone
Districts
Coastal Lowlands
Kilifi, Kwale
75
Eastern Lowlands
Machakos, Mwingi, Makueni, Kitui, Taita-Taveta
145
Western Lowlands
Kisumu, Siaya
153
Western Transitional
Bungoma (lower elevation), Kakamega (lower
elevation)
148
Western Highlands
Vihiga, Kisii
331
Central Highlands
Nyeri, Muranga, Meru
129
High-Potential Maize
Zone
Kakamega (upper elevation), Bungoma (upper
elevation) Trans Nzoia, Uasin Gishu, Bomet,
Nakuru, Narok
242
Marginal Rain Shadow
Laikipia
37
Overall sample
No. of households
1260
41