Despite upward trends in fertilizer use on maize fields in Kenya over the past twenty years, it is still widely viewed that fertilizer use is not expanding quickly enough and that application rates are not high enough to meet national food security and agricultural development goals. This thesis takes a critical look at the profitability and use of fertilizer with respect to maize in Kenya using five waves of household level panel data across thirteen years. I estimate a maize yield response model at the field level to ascertain district and soil group level fertilizer response rates by year, then use these estimates to calculate marginal and average value cost ratios under a number of household specific relative price scenarios including consideration of the transport cost of fertilizer and both the buying and selling prices of maize. I compare these profitability metrics and calculated optimal fertilizer application rates to actual fertilizer use values to learn that households in the highest potential areas are using fertilizer at or beyond the most profitable levels while households in the more marginal lowlands areas have steadily approached optimal use levels, with a small gap remaining in 2010. While fertilizer use could be expanded in the lowlands areas, lower application rates might be the most profitable strategy in other areas. When limiting my sample to only areas where fertilizer use is profitable, I estimate a probit model to determine the factors associated with not using commercial fertilizer on maize fields. I find that long distances to the nearest fertilizer seller and relatively adverse nitrogen to maize price ratios are the major deterrents to fertilizer use where otherwise profitable.
Read
