Attend Spring Meetings on Development topics from Apr 17-21. Comment and engage with experts. Calendar of Events

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Submitted by Kwabia Boateng on
I think fertiliser is an intermediate public good, though not a pure public good, which means some attempt at private allocation would work. However, there are substantial externalities involved, in terms of lower food prices from the resulting increased farm production. Furthermore, fertiliser is not just a band aid; it is complementary to improved seeds. The fact that middlemen appropriate some of the "financial benefits" from subsidised fertiliser does not mean the fertiliser input is no longer a public good. That is an aspect of the influence of the bargaining skills of the production agents involved- from the government distribution store to the farm. The same could be said of special farm credits- who gets the credit may depend on political, religious,etc. affiliation, not to mention the issue of fungibility. At the end of the day, the issue to address is what combination- of improved seeds, credit, fertiliser (and other inputs)- to use. The answer will depend on the particular conditions in the country including the size of the agric budget, the target crops,level of poverty, etc.