Tomoya Matsumoto

Optimal Fertilizer Use on Maize Production in East Africa

We investigate the reasons for the low application of external fertilizers on farms in Kenya and Uganda. The results suggest that Kenyan maize farmers have applied inorganic fertilizer at the optimal level, corresponding to the high nitrogen-maize relative price, in one out of the two survey years and also responded to the price change over time. In Uganda, we find that even the low application of inorganic fertilizer is not profitable because of its high relative price. Policies that reduce the relative price of fertilizer could be effective in both countries, while the efficacy of policies based on improving farmers’ knowledge about fertilizer use will be limited as long as the relative price of fertilizer remains high.

The Impacts of Fertilizer Credit on Crop Production and Income in Ethiopia

In this chapter, we evaluate the impact of fertilizer credit on crop choice, crop yield, and income using two-year panel data of 420 households in rural Ethiopia. The fertilizer credit is found to increase input application for crop production. As a consequence, it has a substantial impact on the yield of teff. We also find that the impact on net crop income per cultivated area and also on per capita income is marginal because of the low profitability due to the low output price and high input cost of agricultural production.

On the Possibility of a Maize Green Revolution in the Highlands of Kenya: An Assessment of Emerging Intensive Farming Systems

As population pressure on land grows rapidly in Kenya, rural farmers have started to intensify land use, which has lef to the emergence of a new maize farming system. The new system is characterized by the adoption of high-yielding maize varieties, the application of chemical fertilizer and manure produced by stall-fed improved dairy cows, and intercropping, especially the combination of maize and legumes. This study aims to explore the determinants of the new maize farming system and its impact on land productivity. We examine not only the impacts of new technologies and production practices but also the impact of the entire new maize farming system by generating an agricultural intensification index based on a principal component analysis. The estimation results show that a decrease in the land-labor ratio accelerates farming intensification, and that the adoption of each new technology and production practice has positive and significant impacts on land productivity. These findings are further supported by the significantly positive impacts of the agriculture intensification index on land productivity.

Maize, Soil Fertility, and the Green Revolution in East Africa

The low application of inorganic fertilizer in Sub-Saharan Africa is one of the major constraints to achieving a Green Revolution in this region. In this study, we estimate the direct impact of the soil fertility on the maize yield and examine if the soil fertility increases the returns to inorganic and organic fertilizer based on comparative study of Kenya and Uganda. The results of the analyses indicate that the Kenyan maize farmers have applied the inorganic fertilizer roughly at the optimal level in one out of the two survey years on both the purchased high-yielding varieties and local/recycled maize varieties. In Uganda, even the low application of inorganic fertilizer is not profitable because of the high relative price. Regarding the returns to inorganic fertilizers on degraded soils, we do not find any increasing marginal returns of such fertilizers to the soil fertility.

ICT for Financial Inclusion: Mobile Money and the Financial Behavior of Rural Households in Uganda

Over 35 percent of the adult use mobile money services in 2014, just five years since its inception in Uganda. Using household survey data covering 820 rural households, we examine the effect of this financial innovation on their financial behavior. We find that adopting mobile money services significantly increases the likelihood of saving, borrowing and receiving remittances due to reduction in transaction cost. The amount of savings, credit and remittances is also significantly higher among user households than non-users. To illustrate the importance of service proximity, we show that reducing the distance to the nearest mobile money agent boosts the frequency of using mobile money services. Our results are robust to specification changes and alternative explanations.

Technology Adoption in Agriculture: Evidence from Experimental Intervention in Maize Production in Uganda

To investigate the impact of a policy intervention on technology adoption by small scale farmers, we conducted sequential field experiments on maize production in Uganda in 2009, in which we provided a free maize start-up package to sample farmers in randomly selected villages. Subsequently, we conducted a sales experiment in each of the treatment and control villages involving all the sample households and their randomly selected neighbors in the treatment villages. The findings of this study suggest that the distribution of modern agricultural inputs has a significantly positive effect on their adoption by farmers who have little experience in their use. We also find a large impact of the credit intervention and significant spillover effects. In short, a small-scale intervention could have a large impact on farmers’ demand for modern inputs and maize yield.

Recent Developments of Agricultural Markets in East Africa

The importance of the working of community mechanisms in rural markets is recognized by many development economists. Professor Yujiro Hayami’s insightful field observations, based on the economic theories of games and transaction costs, have helped us understand the roles of community mechanisms in rural markets (Aoki and Hayami, 2001a; Hayami and Kikuchi, 2000; Hayami and Otsuka, 1993). He argues that the major barrier against the development of markets in developing economies is the absence of an effective mechanism to protect property rights and to enforce contracts (Aoki and Hayami, 2001b). This absence raises transaction costs, which may keep farm households out of markets by holding the farm-gate prices of crops below their reservation prices. Hayami (2009) points out, however, that the community mechanisms of contract enforcement based on mutual trust or social capital may significantly reduce transaction costs. Although his observations are mostly from Asian countries, his argument is also applicable to African rural markets.