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Abstract

Multi-year nationwide survey data is used to estimate maize yield response functions and determine profitability of fertilizer use by small-scale farmers in Zambia. There has been a dearth of empirical studies on economics of fertilization in the context of Sub-Saharan Africa. In this paper we identify major methodological issues arising from using survey data and estimate maize yield response functions for small-scale rural households that have various management practices and soil conditions in two major agro-climatic zones. Profitability of fertilizer use is determined for each group of households. Our findings provide the following key messages. First, households that obtained fertilizer on time and used animal draught power or mechanical power for land preparation are more likely to find fertilizer use profitable than other households with similar agro-ecological and market access conditions. Second, farmers' proximity to the provincial centers has a significant impact on the profitability of fertilizer use. Greater distances and transport costs from provincial centers erode the profitability of fertilizer use. Third, high interest rates also reduce the profitability of fertilizer use. Small farmers may find fertilizer use unprofitable until efforts are made to reduce transportation costs and interest rates as well as to ensure more timely delivery of fertilizer.

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