Are Farmers Under‐Utilizing Fertilizer? Evidence from Kenya Megan Sheahan, Roy Black, T.S. Jayne This paper builds on MS thesis work completed by Megan Sheahan while at the Department of Agricultural, Food, and Resource Economics at Michigan State University. She is currently an independent consultant; Roy Black and T.S. Jayne are both professors in the Department of Agricultural, Food, and Resource Economics at Michigan State University. The authors thank USAID/Kenya and the Bill and Melinda Gates Foundation for funding this study, and have benefitted from the comments and assistance of Joshua Ariga and David Mather. Corresponding author: Megan Sheahan
[email protected] Selected Paper prepared for presentation at the International Association of Agricultural Economists (IAAE) Triennial Conference, Foz do Iguaçu, Brazil, 18‐24 August, 2012. Copyright 2012 by Megan Sheahan, Roy Black, and T.S. Jayne. All rights reserved. Readers may make verbatim copies of this document for non‐commercial purposes by any means, provided that this copyright notice appears on all such copies. Abstract It is widely perceived that sub-Saharan African farmers are under-utilizing inorganic fertilizer. Using five waves of nationwide household survey data from Kenya collected over thirteen years, we estimate the profitability of nitrogen application on maize and compare to observed use patterns. In general, we find that farmers have been consistently and steadily increasing nitrogen application rates towards rates where the risk-adjusted marginal revenue equals the marginal cost of fertilizer application and that, in some areas, farmers have reached and possibly surpassed that point. Fertilizer use rates may nevertheless be profitably raised in many areas, but doing so will require the adoption of complementary practices that raise response rates to nitrogen application.