A quantitative analysis of fertilizer demand and subsidy policy in Bangladesh

Research Grant Reports

In recent times it has happened quite often that farmers have complained of not receiving the required amount of fertilizers and even sometimes not any fertilizer at all at the dealer’s shops. Yet these chemical fertilizers are crucially important inputs for the high-yielding crop varieties. Thus a proper assessment of demand for chemical fertilizers and its distribution system in the country is urgently needed now. With this background, this study estimates the total demand for chemical fertilizer in the country using a nationally representative sample of farmers, covering a total of 47 districts, 73 upazilas and 1838 farmer households. The study finds huge deficit of fertilizers among farmers, whereas larger farmers are less likely to be fertilizer-deficit as compared to the smaller farmers. The reasons behind the huge deficit of the fertilizers can be specified as high price of fertilizers, lack of availability on time, transportation problem and so forth. The study data reveals that the smaller farmers are much restricted in their choices and opportunities because of their lack of assets and their economic profits from crop production activities are moderate. A selective, targeted fertilizer subsidy scheme for only the smaller farmers may be the correct subsidy policy.

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Date and language
Dec 2010
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FPMU Documentation Center
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