Analysis of Relationship between Maize Production and Fertilizer Imports in Malawi: Auto Regressive Distributed Lag (ARDL) Model Approach to Cointegration

Ian Kumwenda, Scora Chikafa and Nemon Kumwenda

No 373443, Agri-Tech Economics Papers from Harper Adams University, Land, Farm & Agribusiness Management Department

Abstract: This paper provides an analysis of the relationship between maize production and fertilizer imports and other factors such as fertilizer prices and rainfall. The inorganic fertilizer was liberalized which allowed entry of multinational companies into the country to begin supplying inorganic fertilizer. Smallholder farmers have been cultivating maize crops for a long time, the land lacks organic matter and vital nutrients like Nitrogen, Phosphorus, and Potassium. Understanding the relationship is very important because it can help the government and other stakeholders as to whether the interventions, they are undertaking are achieving intentions including policy changes. The study used the Autoregressive Distributed Lag (ARDL) Model to analyse if there is a relationship between fertilizer imports and maize production in Malawi using time series ranging from 1992 to 2021. The two models are used to represent the relationship between the two types of inorganic fertilizer and maize production in Malawi Some farmers use both inorganic fertilizers in their maize crop whilst others use either Urea or NPK. Hence, by splitting them, it would highlight how each affects maize production. The results that there is a long relationship between maize production and urea imports as depicted by the equation. Urea imports play an important role in maize production. A one percent increase in urea imports leads to a 14.6 percent increase in maize production. However, NPK imports are not significant. The error correction term is highly significant. The speed of adjustment is high with (-1.24033). The model is adjusting at the speed of 124 percent per annum. An increase in land under maize production leads a to 144 percent increase in maize production. This is significant at 5 percent level. Rainfall is very important in maize production. An increase in rainfall increases maize production. An increase in one percent of rainfall increases maize production by 96 percent.

Keywords: Agribusiness; Crop Production/Industries (search for similar items in EconPapers)
Date: 2024-09-29
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Persistent link: https://EconPapers.repec.org/RePEc:ags:haaepa:373443

DOI: 10.22004/ag.econ.373443

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