ABSTRACT

This study is an analysis of the effectiveness of the fertilizer subsidy scheme in Nigeria. The objective is to determine the impact of subsidy on farmers' access to and use of •feitilizer between 1997-1999 when subsidy was withdrawn and to compare previous aggregate investment in the agriculture/sector as a whole with the aggregate investment in fertilizer subsidy. Primary and secondary data was used for the study. Questionnaires were used to collect primary data. Data analysis was done using means, frequency distribution, percentages and regression analysis. Regression analysis was used to determine the factors which influence the level of fertilizer use by farmers. Fertilizer was probably more available to thrmers with subsidy than without subsidy. Without subsidy most farmers used less quantities of fertilizer than they actually required clue to high cost of fertilizers. This is an indication of reduced access to the use of fertilizers. The cost of other inputs and cost of fertilizers were significant and positive determinants of the quality of fertilizer used by the farmers. Access to credit was significant but negative determinant of the quantity of' fertilizer used by farmers. The study also indicates that aggregate investment in fertilizer subsidy was by far greater than aggregate subsidy was by far greater than aggregate investment in the agricultural sector. This shows that the cost of subsidy to the economy as a whole is enormous. Despite this enormous cost firmer still paid very high prices for fertilizer than the subsidy price. This is an indication that the benefits of' fertilizer subsidy accrued to non- learners. This may have informal governments' decision to abolish fertilizer subsidy.