Profitability of Fertilizer (Mali)

An experiment providing fertilizer grants to women rice farmers in Mali found that, first, women who received fertilizer in- creased both the quantity of fertilizer they used on their plots and complementary in- puts such as herbicides and hired labor. This highlights that farmers respond to an increase in one input by re-optimizing other inputs, making it challenging to isolate the returns to any one input. Second, while the increase in inputs led to a significantly higher level of output, we find no evidence that profits increased. Our results sug- gest that fertilizer’s impact on profits is small compared to other sources of varia- tion. This may make it difficult for farmers to observe the impact of fertilizer on their plots, and accordingly this affects their abil- ity to learn about the returns to fertilizer and could affect their decision to adopt even in the absence of credit constraints.

That is from a new paper by Beaman et al (February 2013).  A draft is here.