Determinants of adoption and levels of demand for fertiliser for cereal growing farmers in Ethiopia

The current government of Ethiopia has put agriculture at the heart of its policies. There is particular emphasis on promoting adoption of fertiliser, improved seeds and the efficiency of input marketing and distribution. In this paper we use a nationally representative data set for 1994 to analyse what factors influence adoption of as well as intensity of fertiliser use of small-scale farmers. Results show that farmer literacy, access to all-weather roads, access to banking, extension services, and the labour availability play a role in fertiliser adoption. Addressing the first four points would substantially increase the rate of adoption. With regard to the amount of fertiliser used we find that smaller sized farms use this input more intensively. Further we find that previous experience with fertiliser, supply, liquidity, oxen owned by the household, and the ratio of the price of the main crop to the cost of fertiliser are important. Availability of credit and supply constraints are important factors in constraining fertiliser use. Our results suggest that the effect of the subsidy on fertiliser consumption is small and that providing credit would be much more effective in terms of raising adoption of and level of use of fertiliser and thus contributing to increasing agricultural output.