NOTES AGRICULTURAL & RURAL DEVELOPMENT 40398 Africa's Growing Soil Fertility Crisis: What Role For Fertilizer? ISSUE 21 BY: JONATHAN AGWE, MICHAEL MORRIS, AND ERICK FERNANDES MAY 2007 AFRICA'S SOIL FERTILITY CRISIS Assessment was undertaken to inform policy makers, providing them with guidelines on measures to effective- ly raise fertilizer use. The guidelines were developed fol- Agriculture in Sub-Saharan Africa faces a growing soil lowing a review of past fertilizer promotion schemes in productivity crisis. Unsustainable farming activities Africa and a survey of current knowledge about techni- have severely depleted soil nutrients throughout much cal and economic aspects of fertilizer use. This Note of the region (Sanchez 2002, FAO 2003). According to draws upon the material prepared for the above fertiliz- the International Fertilizer Development Corporation er strategy assessment, summarizes the information on (2003), 22 kg of nitrogen, 2.5 kg of phosphorus, and the approaches to enhancing fertilizer supply and use in 15 kg of potassium, on average, are lost annually per Africa, and identifies some future steps. hectare of cultivated land. Fertilizer use in Africa meanwhile is by far the lowest of any developing region. Farmers apply about 9 kg/ha of fertilizer in APPROACHES TO IMPROVING Africa, compared to 86 kg/ha in Latin America, 104 SOIL FERTILITY kg/ha in South Asia, and 142 kg/ha in Southeast Asia Organic Nutrients and Soil Amendments (Kelly 2006). Fertilizer use in Africa has changed little during the past decade. Low fertilizer use and inap- Agricultural yields are likely to be sustainable when soil propriate land and water management contribute to fertility levels are maintained. Soil nutrients removed Africa's lagging agricultural productivity growth and when crops are harvested or lost through erosion and the related decline in food production per capita. leaching must be replenished. In most of Africa, appli- cation of organic materials, such as animal and green Reversing Africa's decades-long decline in soil productivi- manures and recycling crop residues, can replenish only ty levels poses a major challenge, and one that cannot be some of the soil nutrients. However, these organic addressed without increased use of appropriate fertilizer amendments play a crucial role in improving fertilizer nutrients. The 2006 World Bank Africa Fertilizer Strategy use efficiency, and soil moisture conservation, especial- ly when combined with conservation tillage practices that protect soil structure, reduce erosion and runoff, and promote soil biological functions important for soil productivity (see Box 1). Inorganic Fertilizer Organic fertilizers are an important resource in manag- ing soil fertility and where possible should also be used to enhance the efficiency of inorganic fertilizers. Due to inadequate availability and competing uses (fuel, forage, etc.) organic fertilizers often need to be sup- plemented with inorganic fertilizers to sustain the lev- els of productivity and production required to feed Africa's rapidly growing population. Improving soil pro- ductivity in Africa will, therefore, require the increased use of inorganic or "mineral" fertilizers. THE WORLD BANK Box 1. Conservation Agriculture Based on Nutrient Bookkeeping Conservation Agriculture (FAO 2001) is an integrated approach to enhance the consistency and efficien- cy of input use in smallholder farming systems.The goal of conservation agriculture (CA) is to maintain crop yields, improve resilience against drought and other hazards, and protect and stimulate soil biological functions. Blanket fertilizer applications are avoided in favor of targeted applications that supply crop needs and prevent the loss of existing soil nutrients. CA taps biological and geochemical sources of crop nutri- ents via nutrient cycling processes, including biological nitrogen fixation and the capture of deep nutrients beyond the reach of crop roots. Farmers can better target the application of costly mineral fertilizer nutri- ents by monitoring the status of nutrients on their fields with nutrient bookkeeping methods like the Nutrient Monitoring or "NUTMON" system used in Burkina Faso, Ethiopia, Kenya, and Uganda.These inte- grated and multidisciplinary methods involve a range of stakeholders in managing natural resources gen- erally and soil resources in particular. Source: Available at www.nutmon.org. EXPERIENCE WITH FERTILIZERS IN AFRICA credit and guaranteed markets. For use on non-com- mercial crops, demand is generally weaker, and for several reasons. Chief among these are lack of knowl- Why Has Africa Not Experienced an Asian-Type Green Revolution? edge, information asymmetries, liquidity constraints, risk and uncertainty, and high opportunity costs. African and Asian agriculture differ in a number of impor- Because fertilizers often represent a substantial share of tant respects: agro-climatic, social, economic, and institu- production costs, low profitability tends to weigh heav- tional. Africa's farming systems are generally more diverse ily in farmers' decisions about whether or not to use than those found in Asia and include greater numbers of them. When cost factors and risk factors act in tandem, livestock (Crawford et al, 2006). They are impacted by as they do in most rain-fed environments, the impact variable rainfall and soils with inherently poor fertility. on fertilizer demand can be significant. African farmers are less likely to enjoy access to input-out- put markets (World Bank 2006a). Africa's low and stag- b. Fertilizer supply: Producing, importing, and transport- nant labor productivity (World Bank 2006b) results partly ing fertilizer all entail substantial economies of scale from the poor health of rural populations, lack of traction, and low-cost procurement becomes difficult when and mechanized agriculture. The lack of enabling markets are small and scattered. Transport costs are economic and political environments has contributed particularly high owing to generally poor road and rail to under-investment in agricultural research and devel- infrastructure, and contribute to lower fertilizer use-- opment, infrastructure, and institutions. particularly in landlocked countries (Gregory, et al. Why Have Fertilizer Markets Failed 2006, World Bank 2006d). to Emerge in Africa? In the more successful fertilizer markets in Asia and A number of features of African fertilizer markets serve to Latin America, the promotion of fertilizer use has often undermine incentives for private participation, producing been part of larger rural development programs in market failures that lead to suboptimal fertilizer use: which complementary investments in agricultural a. Fertilizer demand: It has been observed that the research and extension, irrigation, roads, and market- demand for fertilizer varies across space and time. ing infrastructure made fertilizer use more profitable, Potential suppliers are discouraged by the spatially dis- facilitating the emergence of dynamic commercial persed demand, the small size of local markets, and input-output markets. In Africa by contrast, these com- seasonal variability in fertilizer use. Fertilizer demand plementary investments are often lacking and private can be quite strong for use on commercial crops (World input markets have yet to emerge on a large scale Bank 2006c), particularly if producers enjoy access to (Earthscan 2005, World Bank 2005a,b,c,d). 2 HOW TO FACILITATE INCREASED FERTILIZER USE tion variability like irrigation, drought-tolerant crops, and storage systems), · empowering farmers by supporting producer organiza- Relatively few African countries have access to the raw tions (e.g., through investment in rural education and materials necessary to manufacture most types of fertiliz- offering farmers training in organizational manage- er. Fewer still have domestic markets large enough to sup- ment skills), port efficient manufacturing facilities. Initiatives that pro- · improving the agricultural resource base so that use of mote fertilizer use, therefore, usually stress cost-effective fertilizer is more profitable (e.g., through soil and water importing. Another common strategy to make fertilizers conservation measures and irrigation infrastructure). more affordable to farmers is for governments to subsidize fertilizer prices. Subsidies are currently experiencing a Possible supply side interventions include: resurgence in popularity, but experience suggests that sub- sidies are costly and narrowly focused on farmers, i.e., they · producing/mixing fertilizers matched to local cropping do little to improve performance incentives for supply side conditions, actors, including traders and financial service providers. · reducing fertilizer sourcing costs (e.g., by lowering trade barriers to increase the size of national and A number of interventions (improved seeds, irrigation, regional markets, enabling importers and, eventually, and output prices) offer promise for encouraging effi- manufacturers to capture economies of scale and cient and sustainable fertilizer use in Africa. These inter- ventions seek to directly or indirectly influence market scope), prices and the medium- to long-term costs and benefits · reducing distribution costs (e.g., by improving road and facing fertilizer producers and consumers. More funda- rail infrastructure to lower transport costs), mentally, they address the underlying structural con- · strengthening business finance and risk management straints that undermine farmers' incentives to use fertil- instruments (e.g., through credit guarantee schemes izer and producers' incentives to supply it. and innovative types of insurance), · improving supply chain coordination mechanisms (e.g., Entry Points for Facilitating through regulations relating to product grades and Increased Fertilizer Use standards and market information systems that help Possible demand side interventions include: reduce information costs). · strengthening soil-crop research and extension (via While all of these measures can contribute to increased support to public agencies as well as public-private fertilizer use, none is likely to prove effective in isolation. partnerships and sponsoring on-farm trials and demon- Policy makers should, therefore, select strategic combina- strations), tions of supply- and demand-side measures to allow sup- · improving farmers' ability to purchase fertilizer, ply and demand to grow in parallel--providing the basis improved seeds and other inputs (by improving access for the emergence of viable private sector-led commercial to credit, phased and incremental use via smaller and fertilizer markets. hence more affordable bags, and implementing laws that allow farmers to use risk-free collaterals for com- What Role for Fertilizer Subsidies? mercial loans), Despite the drawbacks of fertilizer subsidies (World Bank · providing farmers with financial tools to better manage 2006e)--high fiscal cost, difficult targeting, and crowding risk (by introducing instruments tailored to farmers' out of commercial sales--they continue to receive strong needs, like improved weather forecasting and weather- support, mainly from farmers but also from some policy indexed crop insurance), makers. Arguments in favor of fertilizer subsidies are usu- · improving quality and dissemination of market infor- ally based on the role that fertilizers can play in achieving mation (e.g., through public and private sector infor- real productivity increases, reversing land degradation, mation systems easily accessed by farmers, building raising farmers' incomes, alleviating poverty, and provid- private sector capacity to assemble and disseminate ing a means of emergency relief. market information on a commercial basis), · protecting farmers against low and volatile output Three questions should be addressed in considering the prices (e.g., by investing in measures to reduce produc- appropriateness of subsidies as instruments for promoting 3 increased fertilizer use. First, can they bring economic REFERENCES benefits that exceed their costs? Second, are there cir- Crawford, Eric W., T. S. Jayne, and Valerie A. 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Factors Affecting Supply of Fertilizer in Sub- Saharan Africa: Agriculture and Rural Development Department ply systems, therefore, cannot take place in isolation. Discussion Paper 24. World Bank, Washington DC. Building input markets must go hand in hand with build- World Bank. 2006e. Fertilizer Subsidies for Africa: Lessons ing output markets and improving farmer access to both, Learned and the Way Forward. Draft Paper by Paul Thangata as well as mitigating the crop production risk factors and Malcolm Blackie. The Agriculture and Rural Development (weather, disease/pest) faced by farmers. Department. World Bank, Washington DC. This note was prepared by Jonathan Agwe, Operations Analyst in the Agriculture and Rural Development Department of the World Bank, with input from Michael Morris, Lead Agriculture Economist for the Africa region of the World Bank, and Erick Fernandes, Land Management Advisor for the Agriculture and Rural Development Department of the World Bank. This Note is based on four Agriculture and Rural Development Discussion Papers cited in the list of references. The papers can be downloaded from www.worldbank.org/rural. THEWORLDBANK 1818 H Street. NW Washington, DC 20433 www.worldbank.org/rural