THE IMPACT OF THE FERTILIZER SUB-SECTOR REFORM PROGRAM ON THE DEMAND FOR FERTILIZER IN "OFFICE DU NIGER," MALI

The "Office du Niger" (ON) is the largest irrigated rice production area in Mali. In the ON, the use of chemical fertilizers is recommended in the cultivation of improved varieties of rice in all production systems. Given the importance of chemical fertilizer in rice production in the ON, surprisingly little is known about the impact of the fertilizer sub-sector reform program on the demand for fertilizers and the capacity of the ON to support a private-sector fertilizer distribution system. Insights into these questions will ultimately help in assessing the potential for a vibrant and sustainable chemical fertilizer subsector in the ON. The primary objective of this paper is to describe how to carry out a study to assess the impact of the fertilizer reform program on the demand for fertilizer in the Office du Niger. It is planned that data will be collected from both primary and secondary sources in order to implement the proposed models and their extensions. Primary data will be collected from a stratified sample of 30 farms in each rice production system in the ON. Secondary data will be collected by consulting relevant reports written about the ON. Empirical models based on the conventional linear programming framework will be built to represent a typical household in each rice production system in the ON. The models will be run using two types of price vectors: the input prices at the farm gate in the ON before and after the devaluation of the FCFA currency. In each case, it is possible to derive the aggregate potential demand for fertilizer by varying its price. As the price of fertilizer varies, different levels of input use become optimal and, in consequence, a series of price-quantity relationships is developed. The risk of yield variability in food crops and income variability from crop sales resulting from weather and prices will be incorporated through use of the minimization of total absolute deviation (MOTAD) model as developed by Hazell in 1971. The results from the analysis should provide insights about the incentives for farmers to use chemical fertilizers and the capacity of the ON to support a private sector fertilizer distribution system.