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Submitted by Manohar Sharma on
More on Maggie McMillan's point: Returns to fertilizer use in Malawi, as everywhere else, depends critically on the simultaneous availability of other agricultural inputs, principally water. Malawi agriculture is almost all rainfed, and during the last two years, the country has been fairly fortunate as far as timely rainfall is concerned. So the higher production in these years speaks AS MUCH of timely rainfall (aka good luck) as of greater fertilizer use. But good luck cannot be guaranteed, and you'd see returns to fertilizer simply disappear when rainfall is inadequate. So I think fertilizer subsidy is really not the panacea that many nowadays make it out to be. In the absence of more permanent investments in irrigation and land improvement, one may well find subsidized fertilizer not doing the job just when you want it to do the most (during a drought year, for example). Sure, in a normal year subsidized fertilizer wrests out some marginal increases in yield. But unfunny thing is that by doing precisely this, it has the effect of locking poor households in this particular livelihood cycle -- low productivity, subsidy-dependent maize production. If the temporary (and marginal) gains in food security brought about fertilizer subsidies actually lulls the government away from making longer term investments in land and irrigation, the locking becomes permanent, especially when subsidies have to be eventually scaled back (as most subsidies eventually do) and farmers are force to go back to "Square One". So fertilizer subsidy is at best a temporary, stopgap measure -what it really does is provides an window of opportunity to make longer term investments without unnecessarily hurting the poor now. But if that window of opportunity is lost, as I fear it may well be, not much is achieved eventually.