Fertilizer use among smallholder farmers in Uganda

Transcription

1 Fertilizer use among smallholder farmers in Uganda Stephen Bayite-Kasule, Patrick Lubega Korugyendo, and Todd Benson International Food Policy Research Institute, Kampala, Uganda Presentation at conference: Increasing Agricultural Productivity & Enhancing Food Security in Africa: New Challenges and Opportunities 13 November 2011; Africa Hall, UNECA, Addis Ababa, Ethiopia Conference sub-theme: Rural service provision and access to factors and inputs for production Abstract Although increasing inorganic fertilizer use is recognized as a key strategy for increasing farm productivity, Uganda s smallholder agricultural sector continues to register one of the lowest fertilizer use levels in sub-saharan Africa. Promoting increased adoption of improved agricultural technologies such as inorganic fertilizer is being pursued as a strategy to rejuvenate the agricultural sector. This paper focuses on both supply-side and demand-side issues that determine inorganic fertilizer use by smallholder farmers in four study areas in the Central and Eastern regions of Uganda. A survey on fertilizer acquisition and use was administered to 275 farmers who were randomly selected from lists of fertilizer users and non-users in each survey cluster. The overall objective of this study was to investigate demand-side constraints to fertilizer use by smallholder farmers in Uganda. A quantitative analysis was carried out to identify the major determinants of fertilizer use by farmers. Also, key characteristics of the farmers were examined disaggregated by fertilizer use and non-use. At household level, the household head being a woman and the number of years the head of household has engaged in farming are negatively associated with fertilizer use, whereas somewhat higher asset ownership, involvement in off-farm work of a skilled nature, and a subjective assessment that quality of the soil one farms is poor have a positive effect on fertilizer use. The broad finding of this study is that lack of information results in either higher costs or inefficient use of inorganic fertilizer by smallholder farmers in Uganda. In addition, although fertilizer use may be profitable on average for smallholder farmers, the variation in returns reduce incentives for risk-averse farmers to use fertilizer. Developing sustainable, competitive input supply and output marketing systems are essential for stimulating fertilizer use in Uganda. This conference paper has not been peer reviewed. Any opinions stated herein are those of the author(s) and are not necessarily endorsed by or representative of IFPRI or of the cosponsoring or supporting organizations

2 Contents Abstract... i Introduction... 1 Agricultural productivity and the role of fertilizer in Uganda... 1 Survey design... 3 Characteristics of fertilizer users and non-users... 3 Determinants of fertilizer use... 5 Fertilizer use on crops... 6 Access to fertilizer... 8 Discussion References List of tables Table 1: Engagement in off-farm income generating activities by household head, by fertilizer use and non-use... 5 Table 2: Agricultural experience and farmland, by fertilizer use and non-use... 5 Table 3: Multi-variate logistic analysis of farmer and farm-level determinants of fertilizer use... 6 Table 4: Maize, vegetables, Robusta coffee and, Arabica coffee, production of and use of fertilizer on crop by sample farmers... 7 Table 5: Crop management characteristics, by crop and fertilizer use... 7 Table 6: Fertilizer use, by crop... 8 Table 7: Farmer access to fertilizer... 8 Table 8: Fertilizer purchases by farmers... 9 Table 9: Transport of fertilizer from dealer to farm and time from purchase to application... 9 List of figures Figure 1: Study areas for farmer survey in Uganda... 3 Figure 2: Demographic, education attainment and asset endowments... 4 ii

3 Introduction The number of people who are food insecure in Uganda has increased from 12 million in 1992 to 17.7 million in Recent agricultural productivity growth has been at 2.6 percent compared to a population growth rate of 3.5 percent. This trend is set to continue as soil fertility continues to decline with low usage of productivity-enhancing inputs and more land being brought into production (MAAIF, 2010). Although Uganda is one of the countries in Sub-Saharan Africa with the highest level of soil nutrient mining (Henao and Baanante, 2006), fertilizer use levels remain very low. Increased use of inorganic fertilizer in combination with other improved agricultural technologies, such as improved high yielding seeds, good agronomic practices, and irrigation, can improve agricultural productivity. While globally there has been considerable research and policy analysis on fertilizer promotion and use (Crawford et al., 2005), in Uganda this has not been the case. Many knowledge gaps still remain, including on the state of fertility of Uganda s soils, the yield response to fertilizer for key crops, and the profitability of fertilizer use on specific crops. Increasing the use of inorganic fertilizer requires a clear understanding of both supply and demand constraints that keep fertilizer usage rates low in Uganda. A better understanding of whether inorganic fertilizer is available, affordable and profitable to smallholder farmers will provide insights on fertilizer use trends and how they can be improved. While policy changes may be constructive in reducing the costs faced by smallholder farmers to access and use inorganic fertilizer and thereby improve profitability, a broad assessment of how fertilizer is supplied to Ugandan smallholders is needed to guide the design of the new policies. Such an assessment should take into consideration household factors, transaction costs, output market dynamics, and how they interact to influence fertilizer use by smallholder farmers. Government policy on the procurement and use of fertilizer are important determinants of the intensity of fertilizer use and indirectly affects how profitable its use may be for smallholder farmers. Because fertilizer is imported from foreign countries, the Ugandan market is a pricetaker and, as such, incremental transaction costs during marketing and distribution may play a significant role in inhibiting fertilizer use by smallholder farmers. Additionally, agricultural product markets are not predictable, presenting mixed signals to farmers further impeding fertilizer use. Finally, the lack of information on fertilizer response rates across Uganda s agroecological zones makes it difficult for farmers to determine whether or not to use fertilizer on their smallholdings. The objective of this study is to develop a clearer understanding of the determinants of fertilizer use by smallholder farmers in Uganda, using those insights to guide policy and program approaches in the public agricultural sector in Uganda for increasing the profitable use of fertilizer by smallholder farmers. Agricultural productivity and the role of fertilizer in Uganda Low fertilizer use is symptomatic of wider structural problems in the economy that limit agricultural productivity growth, such as poor infrastructure, weak institutions and lack of information and human capacity. According to the Uganda National Household Survey 2005/06, few farmers were found to be using fertilizer only one percent of the total farm households surveyed applied inorganic fertilizer to their crops (UBOS 2007). The World Bank has estimated that an agricultural production growth rate of 4 percent per annum is required to stimulate a satisfactory level of general economic development with annual increases of labor and land productivity of 1.5 and 3 percent respectively. Because arable land under agricultural production in Uganda has been severely mined of nutrients over time, inorganic fertilizers provide an option for reversing the negative agricultural productivity 1

4 trends. To increase the growth rate of Uganda s agricultural sector from 2.6 percent to the desirable 4 percent per annum, research into understanding how best to meet the challenge of increasing the use of productivity enhancing inputs such as inorganic fertilizer is needed. Fertilizer has been and continues to be a key ingredient in intensified agricultural systems and has helped farmers in other parts of the world overcome land constraints and improves aggregate production (Bumb, 1996). If agricultural inputs markets are fairly stable and output markets are sufficiently well functioning to present an opportunity to farmers to recoup their investment in applied fertilizer, then farmers should be relatively confident in making the investment decision to purchase and apply fertilizer. Unfortunately this is not the case in Uganda. Fertilizer costs constitute a large proportion of production-related cash outlays and thereby subjects the farmer to greater financial risk. Creating the necessary incentive structure to get farmers to use inorganic fertilizer requires a critical analysis of the supply and demand constraints that keep usage rates low in Uganda, especially among smallholder farmers. Ideally, inorganic fertilizer should be available, affordable, and profitable for both suppliers and farmers. Despite the growing problems of declining soil quality and declining agricultural productivity, a comprehensive understanding of the economics of fertilizer use by smallholder farmers in Uganda is not available. Fertilizer use is a major investment decision for smallholder farmers, and fertilizer is very expensive in Uganda farmers need to invest their money in fertilizer with a good idea of the level of returns that they will obtain for each shilling invested. Generating evidence on fertiliser use profitability will address specific questions critical to understanding how profitability of fertiliser use is likely to shape the production decisions of smallholder farmers (Yanggen et al 1998). The evidence needed includes: Understanding how the key crops grown respond to fertiliser applications across the different agroecological zones in Uganda. Is fertiliser use across the various agroecological zones profitable? For instance farmers in areas which have large tracts of uncultivated arable land may find it unprofitable to produce using fertiliser, whereas those in high population and nutrient depleted areas will find it profitable to apply and use fertiliser. What are the key factors that influence the yield response across the various agroecological zones? What are the fertiliser/output price ratios and how do they influence fertiliser use among smallholder farmers? Because the value of the additional crop yield obtained from using fertiliser compared to the cost of fertiliser (Value Cost Ratio) is unknown, many farmers are reluctant to apply fertiliser. A VCR greater than two is considered an adequate incentive for farmers to apply fertiliser (Kelly, 2006). Moreover, price variability is very high in Ugandan output markets. This price uncertainty discourages farmers from investing in fertiliser as they are not sure of the return to their investment in fertiliser. Lastly, because profitable use of fertilisers is closely tied to fertiliser sourcing, any efforts that enhance the profitability of fertilizer use also will have to deal with challenges in fertiliser procurement. Many analysts of fertiliser use and policy makers in Africa contend that getting the right fertiliser to the right place at the right time is as important as price-response interactions in determining fertiliser use (Fontaine 1991; Pinstrup-Andersen 1993). 2

5 Survey design This study uses data collected from smallholder farmers in areas identified through analysis of the agricultural module of the 2005/06 Uganda National Household Survey. The study areas are areas of the country with greater prevalence of fertilizer use by farmers on their crop plots. These are: Around Masaka in south-central Uganda where fertilizer is used on Robusta coffee and maize; Districts in the peri-urban area around Kampala where fertilizer is used on vegetables; Iganga area in south-eastern Uganda where fertilized maize is grown; and Districts on the western slopes of Mount Elgon where maize and Arabica coffee receive fertilizer. Figure 1: Study areas for farmer survey in Uganda A sample of 270 farmers the actors at the end of fertilizer importation and marketing chains in Uganda were chosen in the four study areas for our survey. Both fertilizer users and nonusers were included. Four farming communities were randomly selected in sub-counties of these study areas. Lists of farmers were drawn up in each community. These lists were divided according to whether the farmers on the list were known to use fertilizer or not. Eight fertilizer users and eight non-users in each community were then randomly selected from these twin lists for inclusion in the sample. As non-random judgments were made at several steps in the sample selection process, it would be erroneous to assume that the sub-samples are closely representative of farmers who do or do not use fertilizer in the study areas. However, the comparisons that our data allows us to make between users and non-users should be relatively robust. Characteristics of fertilizer users and non-users General characteristics of the farming households in the sample are presented in Figure 2. While the sample was selected with an aim to split it equally into fertilizer users and nonusers, success was mixed in this regard. Fertilizer use among vegetable farmers in the peri- 3

6 urban Kampala area was much higher than anticipated, with four out of five sample farmers using fertilizer. In contract, in Masaka, somewhat more non-users than users were interviewed. While there are considerable differences in the demographic characteristics of households between study zones, the only significant differences observed between fertilizer users and non-users are found in the sex and age of the household head. Households that use fertilizer on at least some of their crops tend to be headed by younger men. In terms of educational attainment of the household head, there are significant differences between fertilizer users and non-users in the full sample for all three levels considered any formal education, completion of primary school, and completion of secondary school. With regards to household asset ownership, the general trend is that fertilizer users tend to be better endowed. However, of the assets considered, the only statistically significant difference between fertilizer users and nonusers is with regards to ownership of bicycles or motorcycles. Figure 2: Demographic, education attainment and asset endowments Table 1 shows differences in off-farm sources of income for the head of farming households in the sample, disaggregated fertilizer use and non-use. Statistically significant differences between fertilizer users and non-users are seen along several dimensions. Users are significantly more likely to engage in off-farm employment than are non-users. Of those who do work off-farm, the type of work that fertilizer users engage in is likely (p<=0.1) to be more highly paid skilled work than unskilled work or trading activities. The off-farm workers who use fertilizer are significantly more likely to work off-farm for more months of the year than those off-farm workers who do not use fertilizer in their farming activities and to spend more days in those months working off-farm. Although there are differences across study areas, the average monthly income obtained when working off-farm is, in consequence, significantly higher for fertilizer users than for non-users. 4

7 Table 1: Engagement in off-farm income generating activities by household head, by fertilizer use and non-use Nonuser User All Engage in off-farm work, % Of those, engaged in: Unskilled work, % Skilled work, % Trade, % Months per year engage in off-farm work, mean Work days per month in off-farm work when engaged, mean Off-farm work income for those engaged, monthly UShs 000s, mean UShs 000s, median n Table 2 provides descriptive statistics on the agricultural experience and aspects of the land that farmers in the study sample farm. Here again some significant differences are seen between fertilizer users and non-users. In keeping with the earlier finding that non-users tend to be older, non-users also tend to be more experienced farmers on average. However, fertilizer users have somewhat larger farms than do non-users, although the pattern is not consistent across study areas. There are no significant differences in how the farmland was obtained across the entire sample. Farmers were asked to provide a subjective assessment of the fertility and productivity of the soil on their farm when fertilizer is not used on it. As might be expected, while there were no differences in the proportion of users and non-users who characterize the soil quality as good, a significantly larger proportion of users characterized their soil as being of poor quality. Table 2: Agricultural experience and farmland, by fertilizer use and non-use Fertilizer use Non-user User All Farming experience: mean, years median, years Farm area: mean, ha median, ha Acquired most of land by purchase or rent, % Characterizes general soil quality of farm as: poor, % good, % n Determinants of fertilizer use Using household and individual-level variables, a regression analysis of the determinants of fertilizer demand in the study areas was conducted. This analysis, while not able to provide a nationally representative outlook due to the size of the sample, nonetheless provides insights into the key factors that determine the participation of the sample farming households in fertilizer markets. The findings can contribute to setting appropriate policy solutions to the barriers to smallholder farmer use of fertilizer in Uganda. The analysis uses a multi-variate logistic maximum likelihood estimation approach to assess the relationship between several characteristics of the farming household and their farm and how they interact to influence fertilizer use or non-use by the household. The results of this multi-variate analysis are shown in Table 3. The results are presented as odds ratios, rather than as coefficients. The odds ratio is the chance of the dependent variable fertilizer use by 5

8 the farming household changing from 0 to 1 (a positive outcome in statistical terms) as a result of a one-unit positive change in the independent variable. In contrast to regression based models where a statistically insignificant coefficient is zero, statistically insignificant odds ratio is one that is, a 1-to-1 or even chance. Odds ratios that are less than one represent an inverse relationship between the independent and dependent variable, while odds ratios greater than one represent a direct relationship. Although it was shown earlier that there are significant differences between fertilizer using farmers and non-users for most of these determinants, when these determinants are considered jointly in this multivariate model, only a handful remain as statistically significant determinants of fertilizer use. Determinants that are negatively associated with fertilizer use include the household head being a woman and the number of years the head of household has engaged in farming. Positive determinants of fertilizer use among farmer survey sample households are ownership of a motorcycle, involvement in off-farm work of a skilled nature, and a subjective assessment that quality of the soil farmed is poor. The other potential determinants investigated here are shown to be statistically not significant. While all evidence points to the importance, for example, for fertilizer-using farmers to have a remunerative off-farm employment source or a relatively good asset base, which this model confirms, it also is important to note that the pseudo-r2 for the model is quite low at Much of why farmers in the sample choose to use or not use fertilizer is unexplained by this model. Table 3: Multi-variate logistic analysis of farmer and farm-level determinants of fertilizer use Explanatory variables Oddsratio Standard error Female household head (0/1) 0.230*** Household size, members Full-time farm workers in household, number Primary school head completed (0/1) Secondary school head completed (0/1) House has cement-mortared walls (0/1) Owns motorcycle(0/1) 3.303*** Engages in skilled off-farm employment (0/1) 3.161** Engages in trade off-farm (0/1) Farming experience, years 0.972** Land under crops, ha Considers soil on farm to be poor (0/1) 1.926** Considers soil on farm to be good (0/1) Purchased or rents most of farmland (0/1) Owns livestock (0/1) n 260 Pseudo-R *** p<0.01, ** p<0.05, * p<0.1 Fertilizer use on crops The farmer survey focused on four crops on which fertilizer is sometimes used in the study areas Robusta coffee, Arabica coffee, maize, and vegetables. Table 4 shows what proportion of the sample of farmers produces each crop, and of those farmers, what proportion uses fertilizer on the crop. Of the four crops, vegetables, if grown, are most likely to receive fertilizer. However, maize is more commonly grown and is frequently fertilized. Consequently, maize is the most fertilized of the four crops among the sampled farmers. 6

9 Table 4: Maize, vegetables, Robusta coffee and, Arabica coffee, production of and use of fertilizer on crop by sample farmers All Masaka Kampala Iganga Mbale Maize, % Of whom use fertilizer, % Vegetables, % Of whom use fertilizer, % Robusta coffee, % Of whom use fertilizer, % Arabica coffee, % Of whom use fertilizer, % n Table 5 contrasts the crop management of farmers according to whether they use fertilizer on the crop in question. In general, farmers who use fertilizer on a crop will have a larger area planted to that crop, are more likely to use commercial improved seed and pesticides, and are more likely to have hired labor from off-farm to perform some of the crop operations during the course of the growing season or at harvest. Fertilizer users are not necessarily any less likely to use available organic resources (mulch or manure, in particular) for soil fertility management on the crop plot. Table 5: Crop management characteristics, by crop and fertilizer use Crop Maize Vegetables Robusta coffee Arabica coffee Fertilizer use Nonuser User All Area under crop, ha mean Nonuser User All Nonuser User All Nonuser User All median Commercial seed, % Organic materials used for 31.9 soil fertility management, % Commercial pesticide use, % Off-farm labor hired for some 42.9 crop operations, % Some information on fertilizer use by sample farmers is presented in Table 6. 1 Farmers use quite high amounts of fertilizer for the coffee varieties. For maize and Robusta, the only crops for which yield increases could be computed, fertilizer use is judged to double or triple yields, based on farmer estimates of the yield they would have obtained if they had not used fertilizer. The farmers using fertilizer in the sample were relatively confident about the profitability of fertilizer use on their crop: At the median, farmers felt that prices would have to drop by half for maize and the coffee varieties before they would call into question the economic wisdom of using fertilizer. 1 As considerable variance was seen in the data, only medians are presented here. Since several vegetables were grown with fertilizer, aggregate statistics could not be computed. The sample for fertilized Arabica coffee was too small to confidently estimate yields. 7

10 Table 6: Fertilizer use, by crop Maize Principal fertilizers applied DAP; Urea Vegetables Urea; DAP; 17:17:17; 25:5:5+5S Robusta coffee Urea; 17:17:17; CAN Arabica coffee CAN; 17:17:17; Urea Fertilizer application rate, kg/ ha, median Fertilized crop yield, kg/ha, median Estimated unfertilized crop yield, kg/ha, median Estimated fertilizer use efficiency, kg additional crop harvested per kg fertilizer applied, median Price obtained for fertilized crop, UShs/kg, median ,000 4,000 Estimated price under which farmer expects fertilizer use on crop would no longer be profitable, UShs/kg, median ,000 The most common vegetables to which fertilizer was applied by sample farmers were tomatoes, cabbage, and green leafy vegetables. The four crops considered in the survey were the principal crops to which fertilizer was applied in the study areas. However, Irish potatoes and upland rice were reported to be fertilized by a few sample farmers in the Mount Elgon and Iganga study areas, respectively. Access to fertilizer Some characteristics of how the farmers in the study sample who use fertilizer obtain the input are presented in Table 7. Most farmers will purchase fertilizer twice in the course of a year. In Masaka, Iganga, and Mbale, there is a strong seasonal pattern in fertilizer purchase, with farmers making their largest purchase of fertilizer at the start of the first rainy season. In Kampala, as might be expected for vegetable producers, fertilizer purchases occur in most months of the year, with somewhat higher purchases at the start of both the first and second rains. Table 7: Farmer access to fertilizer ALL Masaka Kampala Iganga Mbale Fertilizer purchases in 2010, number, mean median Month of largest purchase Mar Feb/Mar Sept; Feb/Mar Feb Apr Total fertilizer amount purchased in largest purchase, kg, mean median Total fertilizer value purchased in largest purchase, UShs, mean 141, ,100 83, , ,338 median 67,500 42,500 60,000 87,500 95,000 n While there are some farmers that purchase several bags of fertilizer at a time, the median amount purchased in the largest purchase reported by farmers was 50 kg of fertilizer generally a single bag of a single type, but in some cases smaller amounts of two types of fertilizer. Table 8 presents by fertilizer type the amount and price of fertilizer purchased for those reporting having purchased the fertilizer as part of their largest purchase reported. 8

11 Table 8: Fertilizer purchases by farmers Purchase amount, kg Price, UShs per 50 kg bag mean median mean median Urea ,400 80,000 Calcium Ammonium Nitrate (CAN) ,400 85,000 Diammonium Phosphate (DAP) ,400 90,000 UShs 2,200/- = US$ :17: ,700 88,000 25:5:5+5S ,600 93,000 A series of questions were asked of farmers who purchased fertilizer. Virtually all farmers purchased fertilizer from traders. Only eight of the 152 farmers in the sample that purchased fertilizer obtained it from other traders four from NGOs and four from farmers groups. Less than 10 percent of farmers ordered the fertilizer that they needed sometime before they acquired it most purchased fertilizer from the stock of the trader. Of those that had to order, most collected the fertilizer the following day. Less than 8 percent of the farmers who purchased fertilizer were able to do so using credit provided by the trader. Of those who did, most had been customers of the trader for at least two years. Payment in full was varied, with some traders expecting payments in one month, others in four months. Virtually all farmers who obtained credit reported that they did not have to pay any more for the fertilizer than if they had paid in cash. Thirteen percent of farmers who purchased fertilizer reported that they obtained credit from other than the trader in order to purchase their fertilizer. Of the 21 farmers in the sample reporting having done so, three obtained personal loans from family, five received personal loans from non-family members, seven obtained commercial loans, and five reported obtaining a loan from a Savings and Credit Cooperative (SACCO). Table 9: Transport of fertilizer from dealer to farm and time from purchase to application ALL Masaka Kampala Iganga Mbale Distance to fertilizer supplier from farm, km, mean median Fertilizer transport cost from supplier to farm, UShs per kg per km, mean median Time from fertilizer purchase to application, days, mean median n Table 9 provides some indication of the proximity of sample farmers to fertilizer dealers. Just under half of the sample farmers who purchased fertilizer paid for transport of the fertilizer from the dealer to their farm. The other farmers carried it themselves on foot or on their own bicycle or motorcycle. Those who paid for transport generally either used a rented motorcycle or public transport (taxi bus). The median cost of transporting the fertilizer per kg per km for those sample farmers who paid for transport was UShs However, the mean cost was considerably higher than this, particularly in the Kampala area, indicating that some farmers faced quite substantial costs in transporting their fertilizer to their farm. Most farmers obtain their fertilizer just before they apply it. The median time period between purchase and application across the sample of farmers who purchased fertilizer was 2 days. 9

12 However, a sizeable minority of farmers reported purchasing their fertilizer two weeks to one month in advance of application, with a small handful purchasing their fertilizer two months in advance. Farmers were asked the sources that they use to learn how best to use fertilizer on their crops. Farmers groups were the most commonly mentioned source of such information, followed by the farmer s own experience, with their fertilizer supplier and the National Agricultural Advisory Services (NAADS) also being important sources of such information for some farmers. With regards to participation in the National Agricultural Advisory Services (NAADS), the principal agricultural extension service in Uganda, less than half of the farmers surveyed, 42 percent, reported participating in NAADS activities. Of these, about three-quarters had received some guidance on fertilizer use through NAADS. Twenty of the farmers reported having received some fertilizer through NAADS mechanisms. A quarter of the surveyed farmers reported receiving information on fertilizer use from other organizations operating in their local areas, with about a quarter of these farmers having received some fertilizer in the past from these other organizations. The other organizations generally are non-governmental agricultural development organizations that had or have projects in the areas where the survey was conducted. Discussion This study set out to investigate the factors that influence low fertilizer use rates among smallholder farmers in Uganda. Farmers were found to have very limited scientific information on proper agronomic application of fertilizer on crops within particular agroecological zones. The direct consequence of this is that farmers are unable to establish the profits that they might realize associated with each additional unit of fertilizer applied. This may explain why farmers apply much less fertilizer to their crops than may be optimal from a commercial standpoint. Overcoming information constraints. Farmers continued to use the same fertilizers that they had used in the past on their crops, with little consideration of whether those fertilizers were the best choice for overcoming any crop nutrient deficiencies in the soil on which they planted. For increased agricultural production in Uganda through use of modern production technologies, compilations of all knowledge on the proper application of these technologies, including for inorganic fertilizer is needed. Farmers and those who advise them need to know for a particular agro-ecological zone on what crops, for example, nitrogen or phosphorus is typically a limiting nutrient and how those nutrient limitations can best be addressed using fertilizers as part of a comprehensive soil fertility management approach. Both the agricultural advisory services currently offered to farmers and syntheses of past research results on fertilizer response in the main crops grown in Uganda are very limited. Tukacungurwa (1994) in his review of the Uganda fertilizer market presents blanket fertilizer recommendation rates by crop that were published in the Crop Production Handbook of the Ministry of Agriculture and Forestry in It is unclear what sort of data soil chemistry analysis, on-station fertilizer trials, on-farm fertilizer demonstration, or a combination and what sort of analysis agronomic or economic was the basis for these recommendations. One direct outcome of such outdated fertilization rates is that farmers apply fertilizer expecting high yields as a result of overestimates of yield responses which they never achieve in reality. This explains the inconsistent use of fertilizer across the studied households. If fertilizer use is to increase across the different agroecological zones, yield response information should be developed and disseminated to farmers. 10

13 Fertilizer recommendations are generally developed primarily from an economic analysis of fertilizer response and not solely from consideration of the agronomic response observed in fertilizer trials and demonstrations. As such, the third important information gap with regards to fertilizer use in Uganda has to do with the economics of fertilizer use on the various crops grown by smallholder farmers. Few farmers have access to this sort of information or know how they might determine whether fertilizer use will be profitable on their own farms. In its simplest form, such an analysis takes into account the full cost of fertilizer, the likely yield response the farmer will obtain from the use of fertilizer, and the returns that the farmer can expect to receive from the sale of her or his fertilized crop in local output markets. Additionally, although fertilizer use may be profitable on average for smallholder farmers, the variation in the returns to fertilizer either due to not having the right information on projected produce prices may reduce the incentives for risk-averse farmers to use fertilizer. Smallholder farmers continuously lamented about the drop in produce prices during the crop harvest period which reduces their profit margins severely and consequently affects their ability to use improved inputs such as fertilizer and improved seed in the next farming season. It is evident that putting into place market information systems that avail information on producer prices to farmers at affordable and convenient costs will help stabilize fertilizer use in general. Promotion of fertilizer use. In seeking to meet the objective of increasing agricultural productivity, food security and improving household incomes, the role of factor markets input, credit and output is indispensable. A set of interventions by government to strengthen these markets through policy may help in promoting fertilizer use among smallholder farmers. Government should use efficiency-oriented approaches to guide actions that will enhance fertilizer use by smallholder farmers. Whereas developing sustainable, competitive input supply systems is relevant for stimulating fertilizer use, it is critical that efficient and reliable output markets are established. Effective output markets provide a foundation for effective, profitable use of improved agricultural technologies, including inorganic fertilizer. Through policy, government should come up with mechanisms of preventing the fall in prices as a result of bumper harvests and this can be done through increasing capacity of primary agricultural produce processing industries and putting into place storage facilities to store surplus produce. Ultimately, a sustainable fertilizer supply system can only thrive if demand for fertilizer increases over time and this is possible if farmers perceive fertilizer use to be profitable. All efforts aimed at promoting fertilizer use should among other things decrease the fertilizer-crop price ratio and seek to increase the yield response ratio. This can be attained through providing farmers with the right information about the nutrient deficiencies in their agroecological zones, empowering them to know the correct type of fertilizer to use and other complimentary agricultural inputs like improved seed. Commitment mechanisms, through which farmers commit money for fertilizer at harvest before the next planting season, can also be effective in this regard. References Bumb, B.L Fertilizer supply in sub-saharan Africa: An analysis. In T.B. Tshibaka and C.A. Baanante (eds.), Fertilizer Policy in Tropical Africa. Lomé, Togo: International Fertilizer Development Center (IFDC) & International Food Policy Research Institute. 11

14 Crawford, E.W., T.S. Jayne, & V.A. Kelly Alternative approaches for promoting fertilizer use in Africa, with particular reference to the role of fertilizer subsidies. Department of Agricultural Economics. East Lansing, MI, USA: Michigan State University. Fontaine, J.M., with A. Sindzingre Macro-Economic Linkages: Structural Adjustment and Fertilizer Policy in Sub-Saharan Africa. Organisation for Economic Cooperation and Development (OECD) Technical Paper No. 49. Paris: OECD. Henao J., & CA Baanante Agricultural Production and Nutrient Mining in Africa. Summary of IFDC Technical Bulletin. Muscle Shoals, Alabama, USA: IFDC. Kelly, V Factors affecting demand for fertilizer in sub-saharan Africa. Agriculture and Rural Development Discussion Paper 23. Agriculture & Rural Development Department. Washington, DC: World Bank. MAAIF (Ministry of Agriculture, Animal Industries and Fisheries) Agriculture Sector Development Strategy and Investment Strategy (DSIP). Entebbe, Uganda: MAAIF. Pinstrup-Andersen, P Fertilizer subsidies: Balancing short-term responses with longterm imperatives. In NC Russell & CR. Dowswell (eds.), Policy Options for Agricultural Development in Sub-Saharan Africa. Mexico City: CASIN/SAA/Global Tukacungurwa, C A review on the use of fertilizers in Uganda. Export Policy Analysis and Development Unit. Kampala: Ministry of Finance and Economic Planning. UBOS (Uganda Bureau of Statistics) Uganda National Household Survey, 2005/06: Report on the agricultural module. Kampala: UBOS. Yanggen, D., V. Kelly, T. Reardon, & A. Naseem, Incentives for fertilizer use in sub- Saharan Africa: A review of empirical evidence on fertilizer response and profitability. International Development Working Paper 70, Department of Agricultural Economics. East Lansing, MI, USA: Michigan State University. 12