Market Channels and Growth of Fertilizer Use in Rainfed Agriculture: Conceptual Considerations and Experience in India

Empirical research on fertilizer us in developing countries is replete with evidence on deficiencies in fertilizer supply and marketing systems. But this evidence is usually bypassed in research that aims at identifying factors behind growth in fertilizer consumption. This haitus in our understanding of forces behind growth in fertilizer consumption is mainly due to considering such growth as being driven by growth in farmers’ demand for fertilizers. Factors behind fertilizer demand are usually identified by estimating some variant of a function relationship between fertilizer consumption and such explanatory variables as prices of crops and fertilizer, level of irrigation, and nature of cropping pattern and crop varieties. This paper argues that identifying forces behind growth in fertilizer consumption by focusing only on changes in agro-economic variables behind farmers’ demand for fertilizers is not only a partial but also a quite inappropriate approach. The first section of this paper elaborates this argument with the help of a heuristic conceptualization which encompasses all essential elements involved in governing growth of fertilizer consumption. Section 2 discusses India’s experience of growth in fertilizer consumption, keeping in mind this conceptualization. In the third section, lessons emerging from past experience are presented to accelerate growth of fertilizer consumption under rainfed conditions.