Do Changes in Maize Prices and Input Prices Affect Smallholder Farmers' Soil Fertility Management Decisions? Panel Survey Evidence From Keny

Soil degradation, low cereal yields, and poor yield response to inorganic fertilizer are serious problems in many parts of sub-Saharan Africa (SSA), including Kenya. Soil fertility management (SFM) practices such as maize-legume intercropping and organic fertilizer use, particularly when used jointly with inorganic fertilizer, have the potential to increase yields and yield response to inorganic fertilizer and improve soil health. However, relatively little is known about the drivers of adoption of such SFM practices, including their joint use. Moreover, it is often suggested that African farmers will respond to an increase in the maize price they expect to receive at the next harvest by increasing investment in their soils or that they might alter their use of SFM practices in response to changes in input prices. Yet previous studies largely ignore the role of such prices. Using nationwide household panel survey data from Kenya, we first predict the maize price a household can expect to receive at the upcoming harvest based on observables at the time they make SFM decisions; we then estimate the effects of changes in this predicted maize price and input prices on household adoption decisions for individual SFM practices and combinations thereof. Likely due to multiple market failures, we find that Kenyan smallholders' SFM adoption decisions are largely insensitive to changes in prices; however, there is some evidence that they are more likely to use organic fertilizer and use less inorganic fertilizer per acre when inorganic fertilizer prices rise.