Subsidy as An Economic Instrument for Environmental Protection: A Case of Global Fertilizer Use

Abstract

Fertilizer subsidies may constitute a key economic tool with which to provide food for the growing population. Therefore, this work aimed to (i) assess the effectiveness of subsidized chemical (NPK) fertilizer use in food production by comparing the crop output between developed and developing regions and (ii) examine the benefits of organic fertilizer and the need for its use in developing regions such as Africa. Secondary data from 2000 to 2019 on global subsidized fertilizer use, crop production, income, and other agro-environmental parameters, such as climate and soil, were collected from the international databases of the World Bank, Food and Agriculture Organization (FAO), Forest Resources Assessment (FRA), National Aeronautics and Space Administration (NASA), and World Income Inequalities Database (WID), as well as countries’ national statistics. Data were analyzed using qualitative, quantitative, and geospatial software and techniques, such as SPSS, averages, multivariate analysis, and spatial analytical Geographic Information System (GIS) tools. The results reveal that the total global fertilizer use continuously increased from 79 million tonnes in 2000 to 125 million tonnes in 2019. Subsidized fertilizer use and crop production increased with countries’ economic status. For example, countries or regions with more economic resources tended to have higher fertilizer subsidies. More than 95% of North American and European countries recorded the highest total chemical fertilizer use, ranging from 855,160 to 18,224,035 kgha−1. In terms of organic fertilizer production, the percentage contribution in Africa relative to global production was only 2%, which was about 932,538 million tonnes below the production yield in North America. More organic fertilizer and less inorganic fertilizer should be encouraged instead of the total eradication of chemical fertilizers. This is especially applicable to developing countries, where food production is low due to poor soil and high food demand owing to a harsh environment and rapid population growth.

Regional Patterns of Pesticide Consumption Determinants in the European Union

“…Subsidies represent a solution for farmers to either: (1) invest in new technologies [60] that boost productivity as an alternative to the use of more chemicals or (2) sell organic farm products at competitive prices regardless of the technologies used [61,62]. However, the impact of subsidies on the consumption of pesticides should be interpreted according to the conditions applied by the states that offered subsidies in a given period of time.…”

Implementation of Fertilizer Subsidies: Impact on Agriculture and Food Security in Indonesia (A Critical Review)

“…It has been found that countries with more economic resources tend to have higher fertilizer subsidies, leading to increased crop production. However, the design and implementation of fertilizer subsidy programs have faced challenges, resulting in unintended negative impacts (Famela et al, 2023;Holden & Holden, 2018;Sane et al, 2021;Scholz & Geissler, 2018).…”

“…To increase the efficiency of fertilizer subsidies, alternative options should be explored, such as targeting subsidies to poorer and more marginal farmers. In addition, subsidized fertilizer prices should be closely monitored to keep pace with government purchasing crop prices (Ashari et al, 2021;Sane et al, 2021). Efforts should also be made to encourage organic fertilizers in developing regions where poor soil quality and high food demand pose challenges to food production (Rahmanta et al, 2019).…”

Recent development in functional nanomaterials for sustainable and smart agricultural chemical technologies

“…The rapidly growing demands in sustainable economy set forth grand challenges to current agricultural industry that have traditionally relied heavily on agrochemicals, including synthetic pesticides and fertilizers. Up to now, the global use of pesticides and fertilizers have reached over 4.1 and 125 million tons, respectively [1,2]; however, the traditional way of administering agrochemicals is generally inefficient. For pesticides, which are generally synthetic organic compounds with high hydrophobicity and often poor chemical stability, it is estimated that only less than 1% of the applied dosage served the purpose, while the majority get lost to environment via volatilization, degradation, and photolysis in traditional application scenarios [3,4].…”