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The Role of Active Soil Carbon in Influencing the Profitability of Fertilizer Use: Empirical Evidence from Smallholder Maize Plots in Tanzania
  • Jordan Chamberlin,
  • TS Jayne,
  • S Snapp
Jordan Chamberlin
CIMMYT Kenya
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TS Jayne
Michigan State University
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S Snapp
Michigan State University
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Abstract

We use recent plot-level panel data from Tanzanian smallholder farmers to investigate maize yield responses to inorganic fertilizer under variable production conditions. We find that that the marginal product of nitrogen is strongly conditioned by soil organic carbon and rainfall levels. These results highlight important sources of variation in the returns to fertilizer investments across plots and smallholder farmers in the region. When farmgate prices for maize and fertilizer are incorporated into calculations of economic returns, we find that the profitability of fertilizer use is strongly dependent upon farmgate price ratio assumptions: under our most optimistic agronomic response estimates, while 71% of our sample has an AVCR greater than 1.5 at a maize-nitrogen price ratio of 0.15, that share drops to 30% at a price ratio of 0.12 and 2% at a price ratio of 0.09. Our findings provide insights into the low levels of commercial fertilizer use in Tanzania and elsewhere in the region, and suggest that raising active carbon stocks in smallholder systems should be a strategic priority for sustainable development.