Relaxing Credit and Information Constraints : Five-Year Experimental Evidence from Tanzanian Agriculture

Low fertilizer application by small farmers continues to inhibit crop yields around the world. The reasons behind low application rates continue to be debated. We study the longer-term outcomes of a field experiment which focused on increasing fertilizer use. The original experiment showed that plot-specific fertilizer recommendations combined with a subsidy increase amounts of applied fertilizer and maize yields relative to either intervention alone. We show that these effects dissipate once the subsidy is discontinued. Our results indicate that ability to pay for fertilizer continues to limit fertilizer use even when farmers have information about appropriate fertilizer types and amounts, and even after farmers have learned that fertilizer use is profitable. (JEL O13, Q16, Q18)