Relaxing Credit and Information Constraints: Five-Year Experimental Evidence from Tanzanian Agriculture

Low fertilizer use by smallholder farmers continues to limit crop yields in sub-Saharan Africa. We study the longer-term outcomes of a field experiment conducted between 2014 and 2016, which found that plot-specific fertilizer recommendations combined with a subsidy increased fertilizer use and maize yields. We return in 2019 and find that effects dissipate after the subsidy is discontinued. Our follow-up results suggest that credit constraints strongly limit investment in fertilizer, because farmers have received information about what fertilizer types and amounts to apply and have an experience of fertilizer as profitable. We find that the 2016 treatment effects were driven by the most productive farmers—those with more fertile soils who cultivated larger plots of land. Our analysis features use of both self-reported and satellite-derived yield estimates. Our results suggest the potential importance of sustained financial support in combination with information to induce smallholder farmers to continue to invest in fertilizers.