The fertilizer policy in the country has evolved from pervasive interventionism
in the 1970s to today's market-oriented regime. Government has abandoned
price policies and subsidies, focusing rather on standard setting, quality
regulation, and training. Over the same period, domestic demand for fertilizer
has continually increased, though recently, resurgent fertilizer prices have reduced
total utilization. Evidence suggests that farmers (at least in the case of rice) are
underapplying fertilizer, forfeiting efficiency gains at the margin. On the supply
side, imports have in the past few decades emerged as the main source of fertilizer,
as domestic production has dwindled. Priorities for research and policy are therefore understanding the behavior of farmers in terms of fertilizer application, and addressing internal price disparities, perhaps
by improved transport infrastructure and logistics.
