It is generally agreed that increasing agricultural productivity is critical to stimulating the rate of
economic growth in Africa. There are many important and often complementary determinants of
agricultural productivity. In this paper, we focus on fertilizer and improved seed, without
intending to imply that they are the only or most significant productivity determinants. Other key
factors are adequate water availability, labor, crop choice, etc. Promoting the use of fertilizer and
improved seed involves addressing the supply and demand constraints that keep usage rates low,
especially among smallholder farmers. Such inputs must be available, affordable, and
profitable—for suppliers and farmers alike—without creating untenable financial risks.
Agricultural research, input market development, and direct promotion of input use through
provision of credit and subsidized distribution are used to improve access to improved inputs and
the incentive to use them.
Recently, the role of input subsidies in stimulating growth and addressing food security and
poverty alleviation objectives has re-emerged as an important agricultural policy debate. Sharp
increases in world food and fertilizer prices in 2007 and 2008 have created a sense of urgency in
meeting productivity and social welfare goals, and have put fertilizer promotion programs and
fertilizer subsidies high on the list of options for government and donor responses to the crisis.