Fertiliser subsidy effects on fertiliser use in the northern region of Ghana

Abstract

This study examines the effect of fertiliser subsidy on application rates of fertiliser among maize farmers in Northern Region. The study uses cross-sectional data from 301 households in the northern region of Ghana. The Probit and Tobit models were respectively used to analyse the determinants of participation in the subsidy programme and the effect of participation on fertiliser application rates. The results of the study show that farm size, price of the subsidised fertiliser, distance to input dealers, amount of credit borrowed and off-farm income are key determinants of farmer's participation in the subsidy programme. Participation in the subsidy programme was found to exert a positive effect on the quantity of fertiliser farmers applied on their farms. The study recommends among other things, the inclusion of cash credit schemes in the subsidy programme as smallholders still found the down payment 79% of the cost of fertiliser high. The study also suggested restructuring in the subsidy programme to allow for channelling of fertiliser through farmer-based organisations (FBOs) in order to curb exploitation by politician and elite farmers.

Fertilizer Subsidy and Rice Productivity in Ghana: A Microeconomic Study

“…This means that less distance from farm to market centres increases the probability of farmers to benefit/participate in subsidy program. This result agrees with Imoru and Ayamga (2015), but in contrary with Zhou et al (2010) who found that farm distance to market have negative effect on intensity of fertiliser usage.…”

“…The positive and significant relationship between age and participation meant that older farmers were more likely to have benefited or participated in the fertilizer subsidy program. This result is corroborating with Chirwa et al (2011), and Imoru and Ayamga (2015), but in contrary with the findings of Martey et al (2013), and Ragasa and Chapoto (2017).…”

“…Fearon et al (2015) also found in Ghana that fertilizer subsidy programs are largely ineffective and less efficient despite enormous budgetary allocation to such interventions. Also, Imoru and Ayamga (2015) conducted an empirical study on fertilizer subsidy effects on fertilizer use in the northern region of Ghana. Their findings showed that approximately 57% of farm households do not find fertilizer subsidy programs to improve fertilizer usage, and by extension, yield.…”

Fertilizer subsidy in Ghana: a gain or loss of cocoa productivity?

“…Many studies have been conducted on impacts of fertilizer subsidy (Vondolia et al, 2021;Tsiboe et al, 2021;Andani et al, 2020;Imoru and Ayamga, 2015;Fearon et al, 2015;Sianjase and Seshamani, 2013;Chibwana et al, 2012;Banful, 2011). These studies identified mixed evidence on impacts of fertilizer subsidy (for instance, see Warr and Yusuf (2014), Druilhe and Barreiro-Hurl e (2012), Dorward and Chirwa (2011)).…”

“…Fertilizer subsidy targets the reduction of market prices of fertilizer to enhance demand and application of fertilizer and agricultural productivity (Fearon et al, 2015;Imoru and Ayamga, 2015). According to Vondolia et al (2021), Ghanaian farmers who benefitted from fertilizer subsidy applied 45% more fertilizer than non-beneficiaries.…”