Constraints in the fertilizer supply chain: evidence for fertilizer policy development from three African countries

Increased use of inorganic fertilizer in smallholder farming systems can significantly raise crop productivity, enabling farming households to improve their food security both directly, through greater food supply, and indirectly, though higher agricultural incomes, and to set themselves economically on a pathway out of poverty. Low fertilizer use by African smallholder farming households is evidence of the difficulties they face in accessing the commercial input at a price that will allow them to obtain sufficient and reliable returns from their investment. This paper presents the results of a broad study of fertilizer supply to smallholder farmers in Mozambique, Tanzania, and Uganda to assess whether costs faced at various points along the import and marketing chain, or the absence of key public goods and services, reduce the access that smallholder farmers have to fertilizer. The study involved a mixed methods approach that included for each country a review of the literature on fertilizer supply, demand, and use; interviews with key participants in fertilizer import and marketing; and two surveys – one with farmers and one with input suppliers. We found that the governments of the three countries have used distinct approaches in developing or regulating the fertilizer sub-sector. Based on use levels, Tanzania has been the most successful in ensuring access to fertilizer for its farmers. Mozambique lags the most. Several areas were identified where government inaction or misdirected efforts are having an adverse effect on efforts to increase agricultural productivity through the increased use of inorganic fertilizer. The most important constraints to increased fertilizer uptake stem from missing public goods that are not specific to inorganic fertilizer but are implicated in broad efforts to increase rural economic growth, particularly in continuing to expand and deepen crop output markets to ensure reliable returns to the use of fertilizer and in improving rural transportation networks. In addition, the three governments can do more to foster competitive agricultural input markets. All propose more state regulation on trade in inorganic fertilizer than is warranted. Moreover, particularly in Tanzania, by not consistently acting in line with policies for agricultural commercialization in place, government increases the commercial risks faced by both input suppliers and farmers and undermines the development of vibrant agricultural markets, both for inputs and outputs, including food.