Despite a widely accepted view that increased inorganic fertilizer use is necessary for sustained
productivity growth in sub Saharan Africa, there is limited empirical evidence of how actual
fertilizer use rates compare to economically profitable levels. This study exploits the political
economy of fertilizer access in Nigeria to identify the effects of nitrogen application on rice
production in Nigeria and how this varies across agro various production and market constraints.
We find that fertilizer use in Nigeria is not as low as conventional belief suggests and locations
in close proximity to key political figures tend to have better access to fertilizer. Yield response
to (and profitability of) applied nitrogen for rice in Nigeria varies significantly across different
agro ecological conditions and over time. When the full cost of fertilizer acquisition is taken into
consideration, the profitability of nitrogen application falls significantly, remaining profitable for
a relatively small subset of rice farmers. While observed mean nitrogen application rates for rice
tend to lie below the economically optimal levels for farmers with high marginal physical
product of applied nitrogen, we find mean observed use rates higher than expected profit
maximizing rates for farmers with poor yield response to applied nitrogen. Reducing
transportation and other costs associated with fertilizer acquisition is likely to significantly
increase the profitability and use of nitrogen among Nigerian rice farmers. However, this is not
likely to be enough to sustainably increase farmer productivity as other constraints such as agro
ecological conditions, timely access to the product, availability of complementary inputs and
credit, as well as management practices are also needed.