Strengthening Soil Health for Smallholder Farmers in Sub-Saharan Africa:
Modelling the economics of liming and biofertilizer adoption.
Soil acidity is a growing challenge in Sub-Saharan Africa, reducing the productivity of staple crops relied on by millions of smallholder farmers. In Kenya, a substantial share of cropland is degraded by acidity, particularly in major food-producing regions such as Kakamega, Nandi, Kericho, Kisii, and Nyamira, where the problem is especially severe. Although liming is a well-established solution, adoption among Kenyan farmers remains low, held back by limited awareness of soil acidity as an issue, the practical difficulties of applying lime, and its cost relative to farmers' means.
At the same time, an emerging body of evidence shows that co-applying biofertilizers alongside synthetic fertilizer can reduce synthetic fertilizer use by up to 40% while improving yields, particularly on depleted or low-fertility soils. These biofertilizers work by introducing beneficial soil bacteria called rhizobium, which live on the roots of legume crops and naturally convert nitrogen from the air into a form plants can use, reducing the need for purchased synthetic fertilizer to supply that nitrogen.
This matters on two fronts. Financially, it offers a pathway to boost smallholder incomes: farmers can achieve comparable or higher yields while spending less on costly synthetic inputs, improving their overall returns. Environmentally, reducing reliance on synthetic fertilizer lowers the risk of water contamination and soil toxicity associated with over-application, while improving soil fertility over time through increased microbial activity.
However, the economic viability of this approach for individual farmers and the conditions under which partially replacing synthetic fertilizer with biofertilizer makes financial sense, had remained unclear, particularly across countries with very different biofertilizer market structures.
The Projects: A Collaborative Approach to Soil Health Economics
Social Finance conducted two analyses, both commissioned by the Gates Foundation as part of its broader programme on soil health in Sub-Saharan Africa, to evaluate the economic viability of scaling soil health interventions for smallholder farmers.
The first informed a go/no-go decision on scaling liming in Kenya by assessing whether investing in lime is economically viable for farmers and whether a private lime market could be developed.
The second analysis modelled the costs and benefits of partially replacing synthetic fertilizer with biofertilizer for farmers in Kenya, Nigeria, and South Africa. These countries represent a range of biofertilizer market structures, from Kenya’s emerging market with the publicly developed BioFix product, to Nigeria’s government-led distribution of NoduMax, to South Africa’s established private market.
In Kenya, the liming model estimates farmer-level return on investment across 22 crops, 47 counties, four farm sizes, and three productivity levels over a four-year cycle. This analysis is complemented by a macroeconomic assessment using IFPRI’s RIAPA model and parallel cost research by SAFIC at Strathmore University. For the biofertilizer analysis, the model compares the cost and effectiveness of using synthetic fertilizer alone versus co-applying it with biofertilizer. Results are segmented by farm size, crop type, and soil conditions to account for the diverse farming landscapes in the three countries.
Key Elements of the Approach
In both projects, Social Finance combined detailed farmer-level economic modelling with primary and secondary research to ensure assumptions were based on the best available evidence.
Developed segmented Return on Investment (ROI) and cost-benefit models using farm-level data on yields, crop prices, and input costs for fertilizer and biofertilizer, referencing sources used across both projects, such as CIMMYT and the World Food Program, complemented by Kenya Markets Trust and KAMIS for the liming model, and national agricultural censuses such as Killimo STAT and NASS for the biofertilizer model.
Conducted rapid comparative international research, including expert interviews with liming producers, agricultural associations, and sector specialists in Kenya and India, as well as desk research on Brazil and the UK, to identify the factors behind Kenya’s high lime costs and potential cost-reduction strategies.
Tested the sensitivity of modelled yield responses using real-world field trial data, such as comparing Kenya’s modelled lime impact on maize and soybean yields with trial data from Jimma, Ethiopia, to validate the model’s direction.
Modelled multiple scenarios, including lime cost-reduction and differentiated yield-uplift assumptions by farm size for biofertilizer co-application, to stress-test the sensitivity of farmer-level returns to key assumptions.
Tracked the limitations and confidence level of each assumption, such as soil quality proxies, crop rotation patterns, and the risk of non-responsiveness to biofertilizer, and presented the models as directional, assumption-driven frameworks rather than precise causal estimates.
The Role of Partners in Driving Impact
Both projects were commissioned by the Gates Foundation as part of its broader program on agricultural inputs for smallholder farmers in Sub-Saharan Africa. Analytical partners enhanced the evidence base: IFPRI's RIAPA model provided an independent macroeconomic review of farmer-level findings, and SAFIC at Strathmore University conducted primary research on Kenya's lime cost structure, informing cost-reduction scenarios. Social Finance conducted the biofertilizer review independently, using academic literature, market data, and expert input to assess where partial replacement of synthetic fertilizer with biofertilizer may be economically viable.
Lessons Learned: Insights for Future Programs
Biofertilizers have strong potential—but there is no one-size-fits-all solution: They can improve yields, reduce reliance on synthetic fertilizers, and support soil health, but their economic value depends heavily on the product, crop, geography, and farming context.
Making lime cheaper won't be enough to unlock scale: Even under the most optimistic cost-reduction scenario, many farmers would only break even after the first year. Scaling adoption will require a mechanism to reduce costs, increase access to finance and bolster farmer demand through better evidence and support.
Market structure shapes the right entry point: The biofertilizer work across Kenya, Nigeria and South Africa shows that the viability and design of an intervention depends heavily on whether a market is government-led (Nigeria), transitioning (Kenya) or mature and private (South Africa), meaning a single market-development approach cannot be applied uniformly across countries.
Smallholder farmers face a structural disadvantage: Across both the lime and biofertilizer models, smaller farms consistently face higher per-unit input costs and lower revenue per hectare due to market access disadvantages, meaning interventions designed without farm-size segmentation risk overstating the benefits for the majority of farmers.
Directional models are valuable even with imperfect data: In contexts where rigorous causal evidence on yield response is limited, transparent, assumption-driven models, validated where possible against field trial data, can still provide a credible tool to support decision making.
Looking Ahead: Scaling Impact and Future Collaborations
This type of locally-led modelling work can be used to help funders, governments, and private actors identify where market-based soil health solutions can be scaled, and where additional measures such as credit, subsidies, or demand-side interventions are needed to support smallholder farmer adoption.
For the liming initiative in Kenya, the next steps include completing the IFPRI/RIAPA macroeconomic and policy modelling, conducting further agronomic research to refine assumptions, and carrying out a mixed-methods study to stimulate farmer demand.
For the biofertilizer initiative, the model is being refined as new evidence emerges, including finalizing the selection of biofertilizer and crop for the South Africa analysis.
Social Finance welcomes opportunities to apply this approach to other soil health inputs and regions across Sub-Saharan Africa.
Interested in scaling market-based solutions for smallholder soil health? Connect with us:
📩Chloe Eddleston, Associate Director, Social Finance International – chloe.eddleston@socialfinance.org.uk
Partners
Gates Foundation | IFPRI | SAFIC (Strathmore University)
Location
Kenya, Nigeria, South Africa