The most important use of a demand forecast to the government is for demand stimulation and supply management. Whether there is a state monopoly of fertilizer distribution or free participation of private and public sector agencies, governments in developing countries have the responsibility to estimate demand and ensure adequate overall fertilizer availability. The potential benefits of privatisation of fertilizer distribution cannot be realised unless total availability is enough to meet anticipated demand. If the private sector is free to import fertilizer, there is still the need for a central co-ordinating agency to monitor overall availability.
Short-term forecasts could be used by governments to:
supervise arrangements for sufficient timely availability of right fertilizer types to farmers;
reserve foreign exchange for imports;
initiate, discuss and finalise foreign exchange assistance from donor and multilateral agencies;
monitor the overall supply-demand balance to conserve foreign exchange and reduce the economic burden of excessive inventories;
negotiate port and transport facilities with concerned neighbouring countries if the importing country is landlocked and is dependent on use of neighbouring ports;
allot, on priority, adequate berthing facilities, railway wagons and storage;
arrange agricultural credit.
Long-term forecasts can be utilised by governments to:
evolve programmes to promote fertilizer usage and its efficient application;
invest in additional agricultural research facilities;
assess the need for additional domestic production capacity, estimate net import requirements for the future and determine long-term requirements for multilateral assistance;
formulate policies to increase domestic fertilizer production;
extend the irrigated area to facilitate multiple cropping and use of fertilizer responsive high yielding seed varieties.
