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Agricultural household effects of fertilizer price changes for smallholder farmers in central Malawi

Adam M. Komarek, Sophie Drogué (), Roza Chenoune, James Hawkins, Siwa Msangi, Hatem Belhouchette () and Guillermo Flichman
Additional contact information
Adam M. Komarek: International Food Policy Research Institute
Roza Chenoune: IAMM - CIHEAM - Centre International des Hautes Etudes Agronomiques Méditerranéennes
James Hawkins: International Food Policy Research Institute
Siwa Msangi: International Food Policy Research Institute
Hatem Belhouchette: IAMM - CIHEAM - Centre International des Hautes Etudes Agronomiques Méditerranéennes
Guillermo Flichman: International Food Policy Research Institute

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Abstract: This simulation study explored the agricultural household effects of changes in the price of inorganic nitrogen fertilizer for farmers in central Malawi. We selected the Dedza district to conduct this study, which is a district reliant on maize production for household livelihoods. This study used data from a household survey to develop and calibrate an agricultural household model for a representative household. The survey focused on socio-economic and agronomic factors. This included plot-level agronomic details for crop inputs and yields. Using our dynamic model, we found a negative association between fertilizer prices and fertilizer use, maize area, and income. Removing fertilizer prices led to an increased use of nitrogen fertilizer at the household scale from 16.8 kg to 49.6 kg and this helped increase household income by 52%. We calculated an average own-price elasticity of fertilizer demand of − 0.92. Although higher fertilizer prices increased legume acreage, which had potential environmental benefits, household income fell. Our benefit-cost ratio calculations suggest that government actions that deliver changes in fertilizer prices are relatively cost effective. Our study highlights the reliance of households on maize production and consumption for their livelihood, and the effects that changes in fertilizer prices can have upon them.

Keywords: benefit-cost ratio; bioeconomic model; cropping systems; economics; land use; simulation models; fertilizer; agricultural price; subsistence farming; cropping system; land equivalent ratio; republic of Malawi; modèle de simulation; engrais; ménage agricole; revenu des ménages; prix agricole; agriculture de subsistance; système de culture; utilisation des terres; malawi (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-env
Date: 2017
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01519139
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Published in Agricultural Systems, Elsevier Masson, 2017, 154, pp.168-178. <10.1016/j.agsy.2017.03.016>

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