Fertilizer demand and profitability amid global fuel-food-fertilizer crisis: Evidence from Ethiopia

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cg.authorship.typesCGIAR single centreen
cg.contributor.affiliationInternational Food Policy Research Instituteen
cg.contributor.donorCGIAR Trust Funden
cg.contributor.donorUnited States Agency for International Developmenten
cg.contributor.initiativeNational Policies and Strategies
cg.coverage.countryEthiopia
cg.coverage.iso3166-alpha2ET
cg.coverage.regionAfrica
cg.coverage.regionSub-Saharan Africa
cg.coverage.regionEastern Africa
cg.creator.identifierThomas Assefa: 0000-0003-2411-7046
cg.creator.identifierGuush Berhane: 0000-0002-1947-9483
cg.creator.identifierGashaw T. Abate: 0000-0003-2026-8066
cg.creator.identifierKibrom Abay: 0000-0003-1451-2421
cg.howPublishedFormally Publisheden
cg.identifier.doihttps://doi.org/10.1016/j.foodpol.2024.102785en
cg.identifier.projectIFPRI - Development Strategies and Governance Unit
cg.identifier.projectIFPRI - Innovation Policy and Scaling Unit
cg.identifier.projectIFPRI - Markets, Trade, and Institutions Unit
cg.identifier.publicationRankA
cg.isijournalISI Journalen
cg.issn0306-9192en
cg.journalFood Policyen
cg.reviewStatusPeer Reviewen
cg.subject.actionAreaSystems Transformation
cg.subject.impactAreaPoverty reduction, livelihoods and jobs
cg.volume133en
dc.contributor.authorAssefa, Thomasen
dc.contributor.authorBerhane, Guushen
dc.contributor.authorAbate, Gashaw T.en
dc.contributor.authorAbay, Kibrom A.en
dc.date.accessioned2024-12-31T14:24:16Zen
dc.date.available2024-12-31T14:24:16Zen
dc.identifier.urihttps://hdl.handle.net/10568/168416
dc.titleFertilizer demand and profitability amid global fuel-food-fertilizer crisis: Evidence from Ethiopiaen
dcterms.abstractWe assess fertilizer demand and profitability in Ethiopia in the face of the recent global fuel–food–fertilizer price crisis and other domestic shocks. We first examine farmers’ response to changes in both fertilizer and food prices by estimating price elasticity of demand. We then evaluate the profitability of fertilizer by computing average value–cost ratios (AVCRs) associated with fertilizer application before and after these crises. We use detailed longitudinal household survey data collected in three rounds, covering both pre-crisis (2016 and 2019) and post-crisis (2023) production periods, focusing on three main staple crops in Ethiopia (maize, teff, and wheat). Our analysis shows that fertilizer adoption, and yield levels were increasing until the recent crises, but these trends have been halted by these crises. We also find slightly larger fertilizer price elasticity of demand estimates than previous estimates, ranging between −0.40 and −1.12, which vary across crops. We find that farmers are more responsive to fertilizer prices than to output prices. Farmers’ response to increases in staple prices was statistically insignificant and hence not as strong as theoretically perceived. Households with smaller farm sizes are relatively more responsive to changes in fertilizer prices. Finally, we show important dynamics in the profitability of chemical fertilizer. While the AVCRs show profitable trends for most crops, the share of farmers with profitable AVCRs declined following the fertilizer price surges. Our findings offer important insights for policy focusing on mitigating the adverse effects of fertilizer price shocks.en
dcterms.accessRightsOpen Access
dcterms.audienceAcademicsen
dcterms.available2024-12-22
dcterms.bibliographicCitationAssefa, Thomas; Berhane, Guush; Abate, Gashaw T.; and Abay, Kibrom A. 2025. Fertilizer demand and profitability amid global fuel-food-fertilizer crisis: Evidence from Ethiopia. Food Policy 133 (May 2025): 102785. https://doi.org/10.1016/j.foodpol.2024.102785en
dcterms.issued2025-05
dcterms.languageen
dcterms.licenseCC-BY-4.0
dcterms.publisherElsevieren
dcterms.relationhttps://hdl.handle.net/10568/148984en
dcterms.subjectfertilizersen
dcterms.subjectpricesen
dcterms.subjectfarmersen
dcterms.subjecthousehold surveysen
dcterms.subjectmaizeen
dcterms.subjectteffen
dcterms.subjectwheaten
dcterms.subjectyieldsen
dcterms.typeJournal Article

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