Heterogeneity in farmers' production decisions and its impact on soil nutrient use: Results and implications from northern Nigeria

Sustainable use (in terms of nutrients) of soil resources by farmers in Sub-Saharan Africa is constrained by institutions and markets. This paper explores the case of northern Nigeria, by using a combination of multi-attribute utility theory and bio-economic modelling. This approach allowed us to identify heterogeneity in production strategies and to quantify its effect on the use of soil nutrient resources. We find that farmers with larger land holdings place more emphasis on gross margins in their utility function, while those with larger holdings of fertile fadama fields place more emphasis on sustainability. Risk aversion, operationalised through variance minimization, appears an important attribute in the utility function of many farm households that are more dependent on agriculture for their overall income. A regression analysis shows that differences in production strategies significantly affect nutrient balances, but also shows that such effects are heterogeneous across locations. We find more favourable nutrient balances for some of the more market-oriented farm households who place more emphasis on sustainability. In farm plans of the most risk-averse households, the production of cereals for subsistence consumption dominates and leads to negative soil nutrient balances, especially for potassium. Farmers who place a large importance on gross margins are likely to benefit most from policies aimed at enhancing profitability through improving functioning of markets. The large group of risk-averse farmers will have the largest immediate gain in utility from policies and technologies aimed at reducing production risk in high-value crops. Additional policies aimed at creating a stronger market-oriented production by the least-endowed farm households could play a role in reducing intensity of soil fertility mining. Under these conditions, the efficient cropping pattern shifts partially from cereal cropping to high-value crops, associated with higher input use. The main results are similar to those in other studies, although some of the nutrient balances are less negative. The results do appear to be sensitive to the type of cropping activities included in the analysis, and additional methodological research is required. Extensions of the used method should further account for temporal and spatial differences in soil fertility, leading to differences in nutrient uptake and production, as well as potential temporal heterogeneity in production strategies.