Peer review

Open Access

Global fertilizer prices doubled during the 2020-2022 fuel-fertilizer-food crisis, pushing an additional 210 million people into acute food insecurity. We use transaction-level data from agro-dealers to analyze how this global shock transmitted through Kenyan retail markets. How global price shocks spread across rural markets to affect firms and farmers in low-income countries remains poorly understood. We show that retail fertilizer prices in Kenya rose 81% on average during the crisis, with remarkable spatial variation ranging from 5% decreases to 138% increases across shops. We use dyadic panel analysis to identify changes in price transmission and in market integration across Kenyan fertilizer retailers and to evaluate the effects of government policy intervention. We find evidence of asymmetric price transmission; agro-dealer prices responded faster to import price increases than decreases. We show that larger shops and major agricultural production zones experienced faster price transmission and stronger integration with import markets relative to high-poverty areas. Kenya's National Fertilizer Subsidy Program slowed price transmission but may have prolonged higher fertilizer retail prices. Our results imply that farmers do not benefit as rapidly from input price reductions as they would under symmetric transmission. Our results also demonstrate that global shocks transmit unevenly across markets, suggesting effective stabilization policies should account for heterogeneity in market conditions and variable pass-through behavior.

Text in English

Khaemba, C. : Not in IRS staff list but CIMMYT Affiliation

Market Intelligence Bill & Melinda Gates Foundation (BMGF) Foundation for Food & Agriculture Research (FFAR) United States Agency for International Development (USAID) Accelerating Genetic Gains in Maize and Wheat (AGG) CGIAR Trust Fund

https://hdl.handle.net/10568/175607