Why Do Chinese Farmers Use Too Much Fertilizer?

Overview

The severe overuse of fertilizers by Chinese farmers has brought about grave ecological consequences and economic losses. Why do Chinese farmers overuse fertilizer?

Introduction

In some developing countries, the deficient use of fertilizers that leads to low productivity has been a concern. According to a study by Duflo, Kremer, Robinson (2012), few farmers in Kenya used fertilizer despite high returns.

However, in China, the reverse is true—unfortunately too much reverse. The overuse of fertilizer N has become widespread. China has become the largest consumer of synthetic fertilizer nitrogen (N) in the world, accounting for 32% of the world’s total consumption. (Chen et al. 2011) Moreover, the return on the last dollar of fertilizer used was only $0.7 (Huang et al. 2008), which indicates that farmers make losses for overusing fertilizers. In addition, the overuse brought about serious economic consequences, such as damage to water quality and aquatic ecosystems and changes in atmospheric composition (Chen et al. 2011). Since the overuse of fertilizers is at the cost of not only the farmers themselves, but also the government, the environment and the health of the people, why do Chinese farmers overuse fertilizer?

Discussion of possible causes

Hypothesis 1. Lack of knowledge: farmers simply do not know they are overusing. Farmers generally receive very limited education and highly inadequate institutional support on fertilizer application and essentially make decisions on their own. Due to lack of knowledge on the optimum amount of fertilizer usage and the inability to calculate profits, they tend to maximize production instead of profits, and wrongly overuse fertilizer to secure high production. The training program conducted by Huang et al. (2012) which led to a significant reduction (22%) of inorganic N fertilizer use demonstrated that knowledge does affect the farmers’ behaviour.

Hypothesis 2. The fetter of old conventions. It is shown in the research by Zhen et al. (2005) that old farmers are more likely to use more fertilizer. They relied on their empiric knowledge and were unwilling to accept changes. They don’t realize the context of decision making has changed: the varieties change and the quality of fertilizers changes, yet they still apply fertilizers at a high rate.

Hypothesis 3. Low levels of trust. An interesting phenomenon is that even after the farmers received training program and reduced their fertilizer usage, the amount they used was still higher than the suggested amount by the scientists (Huang et al. 2012). This implies that farmers may have misgiving about the interference and may think they know better about their own land than the scientists and choose to believe in their experience. As the scientists usually have little contact with the farmers and only stay near the fields for a short time for the research work, it is very difficult for them to fully persuade the farmers.

Hypothesis 4. Loss aversion. Smaller farms are more likely to have high fertilizer intensities. (Zhen et al. 2005; Pan 2014) The explanation is that farmers with less farm land may find it more difficult to spread the risks across family plots and thus use fertilizer more intensively to stabilize the crop yields. The farmers cannot afford to lose production by testing reducing usage so they stick to the status quo. They keep the high fertilizer usage as the default option and are reluctant to make effort to find out a better option.

Hypothesis 5. Time and labour constraint. After the reform and opening up in China, more and more farmers engage in non-agricultural businesses. For the farmers who engage in off-farm activities, time available to make the decision becomes less. This could be a cognitive limitation that leads to bad decision on the fertilizer usage. Nevertheless, it could also be a rational choice that has taken into account the opportunity cost of labour. As the opportunity cost of labour rises, the farmers are more likely to use fertilizer in a single application rather than using split applications which give higher nitrogen use efficiency but require more labour (Sun et al. 2012). This also leads to higher usage of fertilizers.

Hypothesis 6. Distortion by government subsidies. The Chinese government provides heavy fertilizer subsidies, which result in overuse from the optimal level. While farmers in Kenya claimed that the lack of money was the biggest challenge for them to use fertilizers, the liquidity constraints play a trivial role in influencing fertilizer use in China due to the low price of fertilizers in China. (Zhou et al. 2010) Clearly, if the prices of fertilizers go up, Chinese farmers will reduce their usage.

Hypothesis 7. Present bias of farmers: the gains for the current year are higher valued than equal gains in the future. This can trigger a vicious cycle: the overuse of fertilizer causes land fertility declines. As there is almost no land fallow in China owing to strong demand for arable lands and limited land resources, the lands need high amount of fertilizer on the next year, which again worsens the land. Apart from that, the government used to place pressure on farmers to increase production to achieve local and national food self-sufficiency targets, and farmers reacted by increasing fertilizer use (Sun et al. 2012). Although there is an optimum production for sustainable development which is lower than the maximum output of a single year, the short-sighted policy and short-sighted behaviour make production exceed the sustainable amount.

Concluding remarks

The possible causes of fertilizer overuse in China are varied. Policy makers face great challenges regarding providing agricultural extension services to farmers. Policy makers should take into consideration the factors affecting farmers’ decision making and behaviours, and design strategies that react to these factors, so that the existing interventions can be improved.

References

Duflo, Esther, Michael Kremer, and Jonathan Robinson. 2010. Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya. American Economic Review, 101(6), 2350-2390.

Duflo, Esther, Michael Kremer, and Jonathan Robinson. 2012. How high are rates of return to fertilizer? Evidence from field experiments in Kenya. The American economic review 98(2), 482-488.

Huang, Jikun, et al. “Impacts of training on farmers’ nitrogen use in maize production in Shandong, China.” Journal of Soil and Water Conservation 67.4 (2012): 321-327.

Huang, Jikun, et al. “Training programs and in-the-field guidance to reduce China’s overuse of fertilizer without hurting profitability.” Journal of Soil and Water Conservation 63.5 (2008): 165A-167A.

Jing Chen, Yao Huang, and Yonghua Tang. “Quantifying economically and ecologically optimum nitrogen rates for rice production in south-eastern China.” Agriculture, ecosystems & environment 142.3 (2011): 195-204.

Pan, Dan. “The Impact of Agricultural Extension on Farmer Nutrient Management Behavior in Chinese Rice Production: A Household-Level Analysis.” Sustainability 6.10 (2014): 6644-6665.

Sun, Bo, et al. “Agricultural non-point source pollution in China: causes and mitigation measures.” Ambio 41.4 (2012): 370-379.

Qiao, F., L. Zhang, J. Huang, and S. Rozelle. 2006. Do China’s farmers overuse fertilizer: An empirical analysis. Working paper. Beijing, China: Center for Chinese Agricultural Policy, Chinese Academy of Sciences.

Zhen, Lin, et al. “Three dimensions of sustainability of farming practices in the North China Plain: a case study from Ningjin County of Shandong Province, PR China.” Agriculture, ecosystems & environment 105.3 (2005): 507-522.

Zhou, Yuan, et al. “Factors affecting farmers’ decisions on fertilizer use: A case study for the Chaobai watershed in Northern China.” J. Sustain. Dev 4.1 (2010): 80-102.

3 thoughts on “Why Do Chinese Farmers Use Too Much Fertilizer?

  1. This is a very interesting topic. Even more so, the reverse effect of fertilizer use against the generally accepted lack of fertilizers available for poor farmers most especially in the less developed countries.
    In this case, I think a very important factor is the ignorance of the farmers, and behavioural persistence. People tend to perservere to a certain behaviour and response reluctantly to change. The belief that fertilizer increases their yields is already matched up in their head, and it is unlikely that they will believe that some folks in shirts and trousers know more about their lands and crops than them. Incidentally, the benevolence of the Chinese government by providing fertilizer subsidies to these farmers is also not helpful.

    Do you think government reducing or withdrawing fertilizers subsidies would have any effect? Also, could you confirm if this is obtainable in the whole of China, or some rich regions.

    Like

    1. Thank you for your comment 🙂

      I totally agree with you and I like your description about the ignorance and behavioural persistence of the farmers. 🙂

      Concerning the subsidies, I think government should cut subsidies on fertilizers so that the market mechanism will push the prices up and the demand for fertilizers will be reduced. However, it should be emphasized that this policy could worsen the lives of the poor farmers who have to pay for higher prices. This policy can be effective in mitigating the situation of overuse, but the ensuring income of the poor farmers should also be considered. It is recommendable that new subsidies encouraging efficient use of fertilizers as well as other environmentally friendly nutrient management practices should be adopted. I think this should be applicable to all parts of China.

      Like

  2. Actually I have a question myself concerning the explanation for farmers who reduce the usage but don’t reduce as much as suggested. I believe it takes time to learn and it is similar to the findings in the Public Good Games where people seem to adjust their contributions little by little towards the dominant strategy. However, the observation is only two periods: Without training and after training. So, can I reach the conclusion safely, if we actually don’t know what will happen in the third period (and the fourth and so on)?

    Like

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s