Abstract
In this paper, we use a series of field trials on Kenyan farms to explore the possibility that, while fertilizer and hybrid seed increase yield on model farms, they are actually not profitable on many small farms, where conditions are less than optimal. Our mean estimates of yield increases due to fertilizer use are in the range of the estimates found on model farms. We find that the mean rate of return to using the most profitable quantity of fertilizer we examined was 36 percent over a season, or 69.5 percent on an annualized basis. However, other levels of fertilizer use, including the combination of fertilizer plus hybrid seed recommended by the Ministry of Agriculture, are not profitable for farmers in our sample.