Abstract: The fertilizer subsidy programme was instituted as a way of making inorganic fertilizers readily available to Nigerian farmers at affordable prices in order to boost food production in the country. Not too long after the scheme took off, farmers started complaining bitterly that they did not receive their supplies of the substance at the time of need and in sufficient quantities. This study was consequently embarked upon to determine; inter alia, if the farmers` complaints about the subsidy scheme were founded and if so, to design alternative ways of administering the programme so that the lofty goals for which it was established could be realised. Primary and secondary data were collected on the relevant variables to the study. Primary data were collected from the farmers on, among other things, whether they received the fertilizers in sufficient quantities and at the time of need. These data were descriptively analysed. Secondary data were collected from NAFCON, AISC, ADP, FPDD (now FFD). Secondary data were collected. These data were on the quantities of fertilizers produced by NAFCON, the input usage of NAFCON, quantities of fertilizers supplied to Ondo State, quantities of fertilizers demanded (adopted) by farmers in Ondo State, the income of farmers in Ondo State and the prices of fertilizers. These data were inferentially analysed. Evidence from the descriptive analyses showed that farmers in Ondo State did not receive their supplies of fertilizers in sufficient quantities and at the time of need. However, evidence showed that for most years of the study period, the supply of fertilizers on the average surpassed adoption (demand). From the inferential analyses, econometric evidence showed that a subsidy introduced into NAFCON`S production process would lead to increased output of fertilizers. An increased output would induce fertilizer prices to fall in Ondo State. Econometric evidence also showed that with reduced prices, the quantities of fertilizers that would be available to the farmers for adoption would be relatively unchanged. This is because of the inelastic nature of the farmers` adoption or demand schedule. It is therefore the recommendations of this study that the adoption of fertilizers must continue to be subsidised, but the method of introducing the subsidy must change. The distribution logistics as it exists presently must be absolutely scrapped. The vast bureaucratic network through which fertilizers are distributed to the farmers must be totally by-passed. In its place, a system of distribution that is market-based must be instituted. The institution of a market-based distribution system can only be realised when the subsidy is introduced at the plant level which would translate into increased output of fertilizers. An increased output of fertilizers would cause fertilizer prices to fall in Ondo State where farmers could purchase fertilizers at reduced rates without having to deal with public-sector channels. In order for the quantities of the fertilizers available to the farmers to increase, more producers must be subsidised to participate in the industry so that the farmers` inelastic demand schedule could be made more elastic. Also, the producers benefiting from the subsidy must be made to submit themselves to government`s regulatory framework in terms of internal management (productivity, due process in purchases etc.) and quality control.