Trends and Patterns in Fertilizer Use by Smallholder Farmers

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					     Trends and Patterns in Fertilizer Use by
    Smallholder Farmers in Kenya, 1997-2007:
                A Success Story?

                                          By

                 Betty Kibaara, Joshua Ariga and T.S. Jayne
                     Research Fellow, Tegemeo Institute

                Presented at the Future Agricultures Consortium Workshop
                   Fertiliser Subsidies: Lessons from Malawi and Kenya
                          Panafric Hotel, Nairobi – 10 February 2009




            Use maize as a ‘window’ to:
•   Trends in fertilizer use, 1997-2007
•   Factors driving the increase in fertilizer
•   Impact of fertilizer use on maize yields
•   Key findings
              Fertilizer use in selected countries
                                      Intensity % growth in fertilizer use intensity
DRC                  0.5                               -47                     Intens ity  of F ertiliz er us e
Uganda               0.6                               237
     45
Angola               0.7                               -69                                                                                                                                         42.8
Niger40              0.9                                   5
Rwanda               1.8                                89
     35
Guinea                 2                                   -4
                                                                                                                                                                                       30.5 30.8
Burundi
     30              2.3                                   -6
Madagascar           2.9                                   -8
 K g /ha




     25                                                                                                                                                                         23.2
Mozambique           3.2                               142
Ghana20              3.6                                68                                                                                                               17.6
Mauritania             4                               -64                                                                                                        14.4
     15                                                                                                                                                    13.2
Chad                 4.3                                93                                                                                     11.8 11.8
                                                                                                                                     8.4   9
Tanzania
     10              4.8                               -47                                                                     7
                                                                                                       5.6       5.9 5.9
Gambia               5.2                                15
                                                                 3.2         3.6       4   4.3 4.8 5.2
      5
Nigeria 0.5 0.6 0.7 0.9 1.8
                     5.6                               2 2.3 2.9
                                                       -73
Burkina Faso
      0              5.9                               -28
Cameroon             5.9




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Zambia               8.4                               -34
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Mali                   9                                   7                                   S e le c te d Afric a n C ountrie s




            Source: faostat website, 1996-2003




                            Kenya Fertilizer use, 1990-2008
                             500000


                             400000
            Metric Tonnes
            metic tonnes




                             300000 fertilizer consumption
                                                                                                                                                                   projected
                                                                                                                                                                   for 2008
                             200000
                                                                                                      commercial imports

                             100000

                                                                                           donor imports
                                             0
                                             1990 1992 1994 1996 1998 2000 2002 2004 2006 2008                                                                                                     4
                      Tegemeo Panel
                    -Survey coverage-
                               •    Proportional Sampling based on 1989
                                    population :
 Year          No: of                – Population of all non urban divisions
                                     – Assigning the population to agro
               Respondents              ecological zones
                                     – Within each AEZ representative
                                        divisions were chosen and grouped
 1997          1,540                    into 9 agro-ecological zones

                               •    Divisions fell within 24 Districts out of the
 2000          1,428                then 41 district

                               •    Divisions were regrouped into 9 agro-
 2004          1,324                regional zones – Hybrids of agro ecological
                                    and boundaries


 2007          1,275           •    listed all locations, sub locations and
                                    villages each of which were randomly
                                    selected.


                                                                                    5
       Overall attrition rate  17.2%




   % of Small-scale Farmers Using Fertilizer on Maize

Zone                   1997    2000             2004           2007
Western Lowlands        1          5               5             13
Coastal Lowlands        0          3               4             14
Marginal Rain Shadow    6          12              11            16
Eastern Lowlands        27         25              47            43
Western Transitional    41         70              71            81
High-Pot. Maize Zone    84         90              87            91
Central Highlands       90         90              91            93
Western Highlands       75         91              91            95
Total Sample            58         64              66            70


                                                                                    6
    Fertilizer Dose Rate (kgs/acre) maize
             - Fertilizer users only-
Agro-regional zone          1997          2000          2004          2007
Coastal Lowlands             11            5             3             7
Western Lowlands             24           14            10            12
Eastern Lowlands             10            18            15            16
Marginal Rain Shadow        12            15            43            43
Western Highlands            31            36            46            47
Central Highlands            68           64            64            58
Western Transitional         54            48            62            71
High-Pot. Maize Zone        65            67            74            75
Sample                       56            55            60           59


                                                                               7




    Maize Productivity (bags/acre) by Zone
Zone                               1997          2000         2004          2007
Coastal Lowlands                     2             4            2.4          4.2
Marginal Rain Shadow                2.1           0.9           4.2          4.6
Eastern Lowlands                    2.3           3.7           3.6          4.7
Western Lowlands                     3            2.6           2.6          5.6
Western Highlands                   5.6           7.6           6.6          8.8
Central Highlands                   7.0           8.8           9.2         10.3
Western Transitional                5.3           7.5           8.8         10.7
High Potential Maize Zone          11.5          10.4          13.8         13.3
Overall Sample                      6.6           7.2           8.2          9.3



                       40% growth in a decade
                                      Maize Yields by Seed-Fertilizer Combination Group 1997-2007




               17.5
                                                                                      14.1                       14.2          14.0

Maize yield: 90-kg bags/acre
                                                                                                                        13.4

                      13                                                                            11.4
                                                                                             10.5
                                                                                                           9.4
                                                                         9.0
                                                             8.4
                                                                   8.0
          8




                                                 6.3   6.0                      6.1
                                       5.0 5.0

                                 2.9




                                  1     2   3    4     1     2     3     4       1     2      3      4     1      2      3      4
                                       Neither          Trad. & fert           Hybrid & no Fert                  combo
                               Key for Bars: 1=1997 2=2000 3=2004 and 4=2007 Season


                                                                                                                                      9




                                   Why has Fertilizer Adoption
                                     increased in Kenya?
                                        -some insights-
  Relatively Stable Fertilizer Policy
            Stance since 1990
         Eliminated import licensing
          quotas, foreign exchange controls,
          retail price controls

         no market uncertainties introduced
          by large-scale subsidy programs




 Private Sector Participation in the
         Fertilizer Market
• Importers
     • Over 10 importers
     • 4 firms controlling 85% of the market
• Wholesalers/distributors
     • Estimated at 500
• Retailers/agro dealers
     • Est. at 8,000
     • Increasing importance through the Agro dealer
       programCNFA
                  Reduction in Distance to
                     Fertilizer Sellers

             10

             8         8.1
Kilometers




             6                      5.7            4.7
             4                                                 3.4
             2

             0
                    1997          2000           2004         2007

                                          Year

Source: Tegemeo panel


                                                                     13




  Institutional Innovations in Fertilizer - Seed
             Technologies in Kenya
• Starter Packs
             – 1kg starter packs+ 150gm of maize seed
             – Promoted by Fertilizer Input Promotion Africa Ltd
               (FIPS-Africa) ;MOA; Private fertilizer companies)
• Training of Input Dealers and Credit
  Guarantee
             – Initially by AGMARK in Western Kenya
             – Now upscale by CNFA through AGRA
• Credit Voucher Scheme
             – Microfinance institutions, AGMARK/MFI SAGA
               government etc
• NAAIAP, KAPP, KMDP, Farmer Associations
                          Global Trends of DAP Fertilizers
                               Price in US $ per ton
                       1400Table 5: Global Fertilizer Prices in US $, 2001 - 2008
                       1200 Year        DAP
Price in US$ per Ton



                             2001       150
                       1000
                             2002       142
                        800 2003        145
                             2004       220
                        600
                             2005       240
                        400 2006        250
                        200 2007        260
                           2008 early 1200
                          02008 late    500
                               2001     2002       2003     2004      2005     2006                                     2007     2008    2008
                                                                                                                                 early    late
                                                                                                          Year




                                                                                  Rising Fertilizer prices reduced the
                                                                                      Maize Fertilizer Price Ratio
                                 tonne maize / tonne DAP fertilizer price ratio




                                                                                  .8

                                                                                  .7

                                                                                  .6

                                                                                  .5

                                                                                  .4

                                                                                  .3

                                                                                  .2

                                                                                  .1
                                                                                       1994 1996 1998 2000 2002 2004 2006 2008


                                                                                  Doubling of the cost of maize production
                                                                                                                                         16
          Distribution of consistent non-users of fertilizer
                       across income quintile
                                  Percent of households
 Income quintile       1997        2000    2004      2007

Lowest (0.45$/day)       29          43       38     37
                                                               Over 70% of
  2 (0.76$/day)          25          28       22     29        non users in
                                                               low income
                                                               quintiles
   3(1.04$/day)          19          14       17     15

  4 (1.74$/day)          18           8       13     11

Highest(3.81$/day)        9           7       10     8

          45% fail to use inorganic fertilizer because they cannot
            afford, but most in low potential areas; viability?




      Is Fertilizer alone Enough?
 • Need for other services
      – Irrigation to mitigate against impacts of
        climate change
      – Improved access to financing
      – Functioning output markets
      – Well coordinated policies
      – Extension services
     Summary of Key Findings
•    Kenya has achieved high adoption rates without much
     government intervention.

•    Adoption rate of fertilizer not homogenous, there are
     wide variations across the agro regional zones-
     location specific

•    Fertilizer dose rates on maize has stagnated at below
     60Kg/acre

•    Increased network of fertilizer traders has reduced
     distance to fertilizer seller from 8.4km to 3.2km.
                                                             19




               Some Thoughts
    Is the Kenyan Case a Success Story ?


     With the fertilizer prices nose-diving,
      does the fertilizer system need to be
                       fixed?

    How can the private sector be involved
     under the Private Public Partnership?
                            Resources
•   Betty Kibaara, Ariga, J., Olwande, J. and Jayne, T.S. (2008), Trends in
    Agricultural Productivity in Kenya: 1997 – 2007, Tegemeo Institute
    Working Paper 31/2008

•   Joshua Ariga, T.S. Jayne, Betty Kibaara and J.K Nyoro (2008), Trends and
    Patterns in Fertilizer use by Smallholder Farmers in Kenya, 1997-2007,
    Tegemeo Institute Working Paper 28/2008

•   James Nyoro, Wilfred Mwangi, Miltone Ayieko, and Milu Muyanga, Seed-
    Fertilizer Technology in Kenya: Recent Institutional Innovations and
    Policy Lessons. Paper presented during the IAAE meeting in Austria, 2006