The study examines the tax subsidy to fertilizer importation previously granted by the FIRB through the FPA to determine the extent to which such subsidy is reflected in the prices of fertilizers. It notes that tax subsidy has a minimal impact on fertilizer prices compared to administrative cost and margin of the importer. While tax subsidy helps promote farmers' production, there are other factors adversely affecting farm production such as inadequate transport and distribution facilities, among others, that need to be addressed. It recommends encouraging farmers to set up cooperatives; formulating a range of fertilizer prices on a regional/provincial/municipal basis; urging traders to locate their fertilizer trading posts in areas proximate to farmers' location; etc.
