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2011-07-28 | Discussion Paper

Nudging Boserup? The impact of fertilizer subsidies on investment in soil and water conservation

Vondolia, Kofi. 2011. “Nudging Boserup? The impact of fertilizer subsidies on investment in soil and water conservation” Working papers in Economics - Gothenburg University :509
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The new fertilizer subsidies in Sub-Saharan Africa are intended to increase agricultural production and ensure fertilizer market development. Fertilizer adoption requires complementary inputs such as investment in soil and water conservation for efficient and optimal nutrient uptake, and many fertilizer subsidy programmes implicitly assume that fertilizer subsidies crowd in such investments. The present study, therefore, evaluates the impact of fertilizer subsidies on the provision of soil and water conservation efforts in Ghana.

The results indicate that beneficiaries of the studied fertilizer subsidy programme do not invest significantly more in soil and water conservation, which advises against excessive reliance on farmers to respond to fertilizer subsidies with substantial investment in soil and water conservation. Thus, in order to achieve increased investment in soil and water conservation for sustainable agricultural development, more comprehensive measures that include these investments explicitly (such as integrated soil fertility management programmes) may be needed.