Food production is the major income component for the vast majority of rural African
households, so increasing yields is essential for reducing poverty and improving
livelihoods. There is widespread agreement that increased use of fertilizer and other
productivity‐enhancing inputs is a precondition for rural productivity growth and
poverty reduction. While the benefits of using fertilizer are widely known, in 2002
fertilizer use in sub‐Saharan Africa (SSA) stood at just 8 kg/ha compared to 78 kg/ha in
Latin America and 101 kg/ha in South Asia (Morris et al. 2007). In an attempt to boost
yields and food supplies, several African countries have re‐introduced fertilizer subsidies
after phasing them out in the 1990’s. While the rationale of fertilizer subsidy programs
is to raise fertilizer use and food production, these programs are often implemented
without any empirical evidence of their impacts. The economics of subsidies not only
depends on crop/fertilizer response rates, crop prices, and fertilizer prices, but also on
the extent to which they increase total fertilizer use.