Subsidy as An Economic Instrument for Environmental Protection: A Case of Global Fertilizer Use

Abstract

Fertilizer subsidies may constitute a key economic tool with which to provide food for the growing population. Therefore, this work aimed to (i) assess the effectiveness of subsidized chemical (NPK) fertilizer use in food production by comparing the crop output between developed and developing regions and (ii) examine the benefits of organic fertilizer and the need for its use in developing regions such as Africa. Secondary data from 2000 to 2019 on global subsidized fertilizer use, crop production, income, and other agro-environmental parameters, such as climate and soil, were collected from the international databases of the World Bank, Food and Agriculture Organization (FAO), Forest Resources Assessment (FRA), National Aeronautics and Space Administration (NASA), and World Income Inequalities Database (WID), as well as countries’ national statistics. Data were analyzed using qualitative, quantitative, and geospatial software and techniques, such as SPSS, averages, multivariate analysis, and spatial analytical Geographic Information System (GIS) tools. The results reveal that the total global fertilizer use continuously increased from 79 million tonnes in 2000 to 125 million tonnes in 2019. Subsidized fertilizer use and crop production increased with countries’ economic status. For example, countries or regions with more economic resources tended to have higher fertilizer subsidies. More than 95% of North American and European countries recorded the highest total chemical fertilizer use, ranging from 855,160 to 18,224,035 kg ha−1. In terms of organic fertilizer production, the percentage contribution in Africa relative to global production was only 2%, which was about 932,538 million tonnes below the production yield in North America. More organic fertilizer and less inorganic fertilizer should be encouraged instead of the total eradication of chemical fertilizers. This is especially applicable to developing countries, where food production is low due to poor soil and high food demand owing to a harsh environment and rapid population growth.