Financial imperatives for fertiliser decisions by smallholders in Myanmar

Questions of ‘improving’ smallholder decisions for farm input use have long exercised the minds of RD&E practitioners with ‘reducing poverty’ objectives in developing countries. Decision Support Tools (DSTs) have often been developed for farmers and/or extension agents based on a ‘top-down’ or linear Research-Development-Extension paradigm. There is evidence that DSTs are not used by farm decision makers. Some developers of DSTs don’t realise that smallholder farmers must borrow money to buy fertilizer! In Myanmar smallholder farmers are using Nitrogen (N) fertilizer for cereal crop production and these decisions have been studied to investigate whether better information can be provided for such decisions. These smallholders are semi-subsistence with reliance on purchased inputs and they sell to markets for profit. Considering the current situation for rice and maize production systems in the central Dry Zone of Myanmar, how can information be provided to relevant decision makers (farmers, extension agents, input suppliers) leading to improved farm household well-being? Is the development of a ‘traditional’ DST (as described above) likely to be of value? Can an improved decision-making framework be developed for this set of farmers and circumstances? A multi-disciplinary ACIAR-funded project in central Myanmar has investigated rice and maize production focussing on nutrient use efficiency and fertiliser decisions. Bio-physical work included field trials measuring crop yield responses to differing levels of N input (production functions) and taking associated soil and plant measures to estimate N uptake and use efficiency. The socio-economic component included initial focus group workshops, two farmer field surveys, a literature review of DSTs and an economic analysis of the crop yield responses for ‘best’ N levels. The project has promised to develop a DST, and the purpose of this paper is to outline our thinking about decision support. The paper draws together information from the focus group workshops, the field surveys, the yield responses and economic analyses. A partial budget framework using (subjective) farmer inputs in a return on investment (ROI) framework is outlined. An existing DST which uses this economic framework is discussed. Despite our a priori expectations that farmers in central Myanmar might not be using fertilizer efficiently, we found that many smallholders apply both compound (NPK) and Urea (N) fertilizers, that the amounts of Urea are substantial, and that they split the Urea applications as do farmers in Australia. They seem to understand the agronomic benefits from applying N fertilizer when the crop is growing to improve uptake efficiency. Rice and maize yield responses to increasing N application rates generally follow a diminishing returns pattern, despite the tyranny of site and season associated with trials in farmer fields. Given that their stated objectives include financial returns, that some farmers require their income to cover input costs and that a ROI is desirable, we apply the CIMMYT (1988) framework to this set of results and compare the actual farmer decisions with a ROI decision rule based on agronomic field work results. We conclude that these farmers are making fertilizer decisions that are consistent with a profit-conscious but risk-averse paradigm. We illustrate a DST which is based more on economic objectives and risk preferences than traditional tools based on N budgets or programs with soil, agronomic and socio-economic overlays.