Fertilizer Price Shocks in Smallholder Agriculture: Cross-Country Evidence from High-Frequency Phone Surveys in Sub-Saharan Africa

Akuffo Amankwah, Alemayehu Ambel, Sydney Gourlay, Talip Kilic, Yannick Markhof and Philip Randolph Wollburg

No 10842, Policy Research Working Paper Series from The World Bank

Abstract: Since 2020, many countries in Sub-Saharan Africa have experienced disruptions to agricultural activities due to the adverse effects of multiple global crises. Notably, the Russian invasion of Ukraine caused a surge in inorganic fertilizer prices, which had potentially significant impacts on Sub-Saharan Africa’s agriculture sector given that most countries in the region are net importers of inorganic fertilizers and the Russian Federation is the world’s largest exporter. Using high-frequency longitudinal phone survey data spanning four years from six Sub-Saharan African countries, this paper examines the dynamics of smallholder agriculture against the backdrop of these crises, with particular focus on prices, availability, and use of inorganic fertilizer, as well as the strategies employed by farmers to cope with high fertilizer prices and other accessibility constraints. The results show that inorganic fertilizer prices have increased in the region since 2020, forcing smallholder farmers to adopt coping mechanisms that are less productivity-enhancing, making them even more susceptible to future crises. Specifically, farming households reduced the quantity of inorganic fertilizer applied, by applying it at lower rates or to a smaller area. In some cases, households sold assets or borrowed money to cope with the high prices of inorganic fertilizers. This calls for policies to help smallholder farmers in the region to build strong support systems to be more resilient and better able to cope with the adverse effects of rising inorganic fertilizer prices during polycrises and related shocks.

Date: 2024-07-09
New Economics Papers: this item is included in nep-agr, nep-cis and nep-dev
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