Producer's response to fertilizer subsidies - the experience in the coconut industry

Abstract

The author examines the initial response and actual fertilizer consumption patterns of coconut growers under the government's Fertilizer Subsidy Schemes for the 1956-78 period and finds that the scheme failed to arrest the declining trend in fertilizer use during the 1970s.With the aid of several cross-section studies,the author identifies a number of reasons for low response to the scheme.They are namely:bad weather spells,increasing dominance of the small-holder in the industry,lagged response of the authorities to large price increases,poor distribution network,and the failure of government extension services.The author argues that a comprehensive policy embracing subsidies,easy credit,efficient distribution of fertilizer and better extension services should have replaced the subsidy only policy.