Determinants of demand for fertilizer among food crops farmers in Ogun State: an application of almost ideal demand system (aids) analysis

Abstract

Nigerian food crop farming is characterized by low productivity.Improved use of inorganic fertilizer has been proffered as a possible solution;however,the demand for fertilizer by farmers is constrained by availability of other production resources. This paper therefore, examines the effect of inorganic fertilizer use on cost shares of various factors in the production of food crops;and determines the elasticity of demand for inorganic fertilizer and its substitution in the production of food crops in Ogun State.
The study utilized primary data obtained in cross-section survey of 554 randomly selected food crop farmers in the study area.The results revealed that the demand for inorganic fertilizer was price inelastic but negatively sloped (-0.35). Fertilizer was a technical substitute for planting materials (0.3) and other intermediate inputs like insecticides and tractor services (0.17); and a technical complement of labour (-0.62) and land (-0.2) in the production of food crops.
The highest input substitution existed between fertilizer and planting material. The greater the quantity of inorganic fertilizer use the lower the shares of planting material cost and worth of other inputs cost. A reduction in the quantity of inorganic fertilizer as a result of price increase or scarcity of the product will decrease the demand for farm labour and land.
The study therefore, recommended that the Federal government should provide policy that will promote the availability and use of inorganic fertilizer in order to save the cost of planting materials, labour and land use in arable crop production.