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Abstract
Kenya is one of the few countries in sub-Saharan Africa experiencing an impressive
rise in fertilizer use on food crops grown by smallholder farmers since the liberalization of input
markets starting in the early-1990s. The impacts of these reforms and associated private sector
investments on national fertilizer use and food production have never been rigorously quantified,
though doing so could shed new light on policy makers’ options for raising food crop
productivity in the region. This study estimates a double-hurdle model of fertilizer demand that
controls for common forms of unobserved heterogeneity then simulates the effect of changes in
fertilizer prices and distances from farm to the nearest fertilizer retailer associated with fertilizer
market liberalization on the demand for fertilizer and the production of maize, the major staple
crop in the country. The study concludes that over the period 1997-2010 the reduction in real
fertilizer prices associated with input market liberalization is estimated to have raised maize
yields by 15 to 100 kg/ha, depending on the province and year. Low average physical response
rates of maize to fertilizer application in high fertilizer consuming areas of Kenya limits the
degree to which increased fertilizer use via liberalization policies translates into food production
improvements. These increases in maize yield specifically linked to changes in fertilizer prices
accounted for between 1 and 11 percent of changes in maize production between survey years.