Economics of Fertilizer Utilization in Small-Scale Farming Systems and Appropriate Role for Policy

Upholding increased adoption and utilization of superior agricultural technologies such as inorganic fertilizers has become the panacea and the real option to revitalize the agricultural sector in Zimbabwe. This research study focuses on the supply side issues determining the demand of the inorganic fertilizers by small-scale farming communities. The main objective is to carry out a comparative institutional performance evaluation of the government of Zimbabwe’s fertilizer input support and the private input supply systems. It is argued that the fertilizer marketing channel used by small-scale farmers to obtain the input plays a critical role in influencing the utilization of the input and subsequent performance of the farming community. A survey was administered to 200 farmers randomly selected in Mashonaland Central Province. Tobit, Probit and Logistical Regression Models were employed as data analysis tools. Also, the Institutional Analysis and Development Framework was used and key characteristics of the farmers were examined disaggregated by the fertilizer marketing channel used to acquire the input. Performance was measured using crop production and asset ownership variables. The major finding of this study is that untargeted public provision of fertilizer has severely undermined the free market system through the crowding out effect. It has contributed to timeliness failures, operational inefficiencies, growing political interference, heavy reliance on handouts, and availability problems. The study recommends the development of a detailed national fertilizer sub-sector policy that is carefully integrated with a comprehensive agricultural policy. There is need for reconstruction of efficient institutions and new ‘social capital’ that will ensure the proper functioning of fertilizer markets in the countryside. To minimize the exposure to food insecurity of vulnerable segments, government and other development partners are encouraged to make use of non-market distorting interventions such as making the beneficiaries work at public works projects for fertilizer vouchers which are locally redeemable at any of the agro-dealer retail outlets