Effects of the Fertilizer Subsidy Program on Fertilizer Use, Farm Productivity and Crop Sales in Mali

To address this knowledge gap, a survey was conducted among 2400 extended farm family households in two major agroecological zones of Mali: the Delta du Niger and the Plateau de Koutiala. The study aimed to test the effects of the fertilizer subsidy on total fertilizer applied, yield, target crop income, and quantity of all crops sold. The results indicate that subsidized fertilizer accounts for most of the total fertilizer applied by farmers, suggesting that in some instances it is displacing demand for commercial fertilizer. Average fertilizer use rates in kgs appear to be below the recommended quantities for all target crops, despite subsidy receipts. Regression analysis was conducted using several econometric approaches to improve the reliability of the results. Each approach provided evidence that considering all crops combined, the fertilizer subsidy has a positive effect on total fertilizer applied per ha, yields, and crop revenues of target crops, as well as on quantities of all crops sold. However, important differences are observable among crops. On average, subsidy effects on millet and sorghum outcome variables were weak or not statistically significant. Average subsidy effects on all outcome variables were strong for rice. Average subsidy effects were strong on maize yields, but not revenues or sales of other crops. The dose-response estimation suggests efficiency intervals in which the fertilizer subsidy has a positive marginal effect on fertilizer use, productivity, and crop sales. These intervals vary from one crop to another, but are estimated only for rice, maize, and cotton given that mean effects are not significant for sorghum and millet. The results indicate that there is no positive marginal effect of subsidized fertilizer on yields below 65 kg/ha for rice and 87 kg/ha for maize. The graphs also show peaks at high levels of subsidized fertilizer for both crops, with declining marginal returns after that point. The fertilizer subsidy in Mali is currently designed to target particular crops and enhance their productivity. The study concludes that the design could be made more efficient by either reconsidering target crops or targeting the subsidy according to different criteria. Applying the subsidy to cotton represents a deadweight loss, as it leads to no discernible supply shift. This finding could be season-dependent or result from factors not measured in this analysis, such as cotton seed quality. The study's findings have implications for policymakers in Mali. The results suggest that the fertilizer subsidy program could be improved by targeting the subsidy according to different criteria, such as crop type or region. Additionally, the study's findings on the effects of the fertilizer subsidy on different crops provide valuable information for policymakers to consider when making decisions about agricultural policy in Mali.