Effects of fertilizer price on feasibility of efficiency improvement: case study for an urea injector for lowland rice

Efficiency improving techniques, such as the introduction of a urea injector for lowland rice production, appear to lead to higher yields, lower fertilizer use and less environmental pollution at the same time. If farmers are free to decide on the amount of fertilizer they use, economic rationality leads to a choice between using the improved technique for saving fertilizer while obtaining the same yield, for increasing yield (at the same fertilizer rate) or for a mixed strategy (a slightly higher yield and a different fertilizer rate). The 'economic optimum fertilizer rate' was calculated with a simple yield model for a low and a high fertilizer application efficiency to predict which strategy would be best for the farmer. Calculations for a 'standard' data set for lowland rice show that the greatest benefit from an increase in application efficiency by urea deep placement instead of broadcast application can be expected when a marginal efficiency of about 9 kg rice per kg fertilizer N is used for determining the fertilizer rate. For a marginal efficiency of less than 6, savings on fertilizer are the main benefit of efficiency improvement; for higher marginal efficiencies yield increases become the main component of total benefit; for marginal efficiencies above 9, fertilizer use will increase when a more efficient technique is used, but increased yields compensate for their costs. In the four countries where a manually operated pneumatic urea injector was tested (Togo, Bangladesh, Indonesia and Ivory Coast) the price ratio of rice and fertilizer N ranged from 1.1 to 2.5. Even when a 'risk-avoidance' multiplier of 2 is used, we may conclude that fertilizer prices were too low relative to rice to make optimum use of the existing techniques for efficiency improvement. An equation is derived for estimating the price ratio at which the probability of farmer acceptance of techniques for improving fertilizer use efficiency is highest.