I do not question the need for chemical fertilizer in Africa, but wonder if you should subsidize the fertilizer or the market. If you subsidize fertilizer through any of the means mentioned above aimed at promoting a specific crop, then the fertilizer will quickly get diverted to more profitable crops. This can be particularly true if the government has a ceiling price on the staple foods of the country in an effort to assure affordable food for urban areas. This quickly result in major food inscurity. However, what would happen if you took the fertilizer subsidy losses on the marketing side, paying a primum price for the grain then subsidizing the sale of it. Could this be done at the same cost as subsidizing fertilizer? It should be possible and not really make an economic difference. Then the open market price of fertilizer will be utilized for staple crop and enhance food security.
An interesting example might be Afghanistan which has fixed ceiling price on wheat, that is a winter crop produced parellel to poppy. Farmers actually grow wheat, but mostly for the straw for summer fodder with the grain a by-product. Now if the government offer a primum price for the wheat as grain would that make a dent in the poppy production??
I do not question the need for chemical fertilizer in Africa, but wonder if you should subsidize the fertilizer or the market. If you subsidize fertilizer through any of the means mentioned above aimed at promoting a specific crop, then the fertilizer will quickly get diverted to more profitable crops. This can be particularly true if the government has a ceiling price on the staple foods of the country in an effort to assure affordable food for urban areas. This quickly result in major food inscurity. However, what would happen if you took the fertilizer subsidy losses on the marketing side, paying a primum price for the grain then subsidizing the sale of it. Could this be done at the same cost as subsidizing fertilizer? It should be possible and not really make an economic difference. Then the open market price of fertilizer will be utilized for staple crop and enhance food security.
An interesting example might be Afghanistan which has fixed ceiling price on wheat, that is a winter crop produced parellel to poppy. Farmers actually grow wheat, but mostly for the straw for summer fodder with the grain a by-product. Now if the government offer a primum price for the wheat as grain would that make a dent in the poppy production??