| Abstract:
| In sub-Saharan Africa, greater use of mineral fertilizers is crucial to increasing food production and slowing the rate of environmental degradation. Regional growth rates in fertilizer consumption have never been particularly high, in part because the real price of fertilizer is higher in Africa than in many other developing regions. As subsidies have been removed and exchange-rate distortions corrected over the past decade or more, relative prices paid by farmers have risen to reflect more closely the economic cost of fertilizer. Consumption growth has thus slowed even more. Nonetheless, during the period of declining growth in consumption, fertilizer use on cereals, particularly maize, has become relatively more important than use on cash crops. Strategies for increasing fertilizer use should thus direct more attention to maize and other important staples. In higher potential areas, some fertilizer use on maize is often economically profitable even at higher relative prices of fertilizer. Additional research on the limiting nutrient under farmers' conditions or on the interactions between nutrients and other crop- management factors could help to increase profitability. Policy analysis for Africa's fertilizer sector has tended to focus on subsidies and to neglect other important issues, such as solving credit problems at many points in the marketing channel, supporting appropriate agricultural research, and developing and maintaining infrastructure. Agricultural sector strategies that give sufficient attention to these issues must be developed. Although subsidy removal must be one ultimate policy objective, we recommend gradual withdrawal in countries where fertilizer consumption levels are relatively high. Because many African governments require time and stability to develop policy capacity, detailed institutional analyses can help design second-best solutions to problems of fertilizer policy. |
