Stakeholders audit the ‘fertilizer subsidy program’ in Africa

Agricultural stakeholders from 11 African countries recently gathered in Nairobi, to assess the impact of fertilizer subsidy programs (FSPs) on farming among the continent’s small holder farmers (SHFs) making up two thirds of farmers in Africa, since they began resurfacing in late 1990s.

Fertilizer subsidy in Malawi

The workshop, organized by Food Agricultural Organization (FAO) had farmers’ unions,  input dealers, agricultural ministries and development bodies share knowledge, explore successes and propose solutions to challenges bedeviling FSPs success in Africa.  The workshop also explored if FSPs have been key in fighting food insecurity in Africa where they operate.

According to James Tefft a Senior Policy Officer with FAO there is need for continental FSP stakeholders to discuss what is working and what is not.  Tefft noted while governments may commit 25 to 40 percent of their budget to FSPs, their efficiency on farms is what matters. The resurfacing of FSPs has been triggered by high international fertilizer prices.

FSPs had collapsed in late 80s and early 90s due to market liberalization and cuts in government funding. But in the last 10 years, they have begun resurfacing to cushion Sub Saharan Africa SHFs from rising prices of Urea and Diammonium Phosphate (DAP) fertilizers.  Prices of the two fertilizers rose by between 141.3 and 242.7 percent in 2008/2009 compared to 2007/2008 season.

By then, Malawi touted as the best African model of FSP execution was getting higher yields on her farms. The country has 3.5 million farm families and 1.4 million are currently in FSP.  Farmers who got 0.8 tonnes of maize before per hectare get over 2 tonnes for the same. Per bag of fertilizer a peasant farmer can pay one sixteenth of the price and the rest paid by the government. The program was reinstated in 1998 but only in 2005/2006 did it begin to flourish due to consistent rains.

Christian Nolte a Soil Fertility expert with FAO emphasized FSP work on farms only if right agronomic practices are applied.  Malawi subsidizes Urea and Nitrogen, Phosphorous and Potassium fertilizer (NPK) commonly used to grow maize and legumes. The relative success of FSP in Malawi also has prompted the government to start subsidizing maize and legume seeds.  Farmers get open pollinated or hybrid varieties and pay a small fraction of their costs.

Farmers selected to receive subsidies are poor peasants actively farming. According to Mphatso Dikamau of Farmers Union of Malawi, out of 20 families in a community 8 can be selected to for subsidies.  The community and local chief, select peasants most in need of subsidies by sticking to the Ministry of Agriculture guidelines.

Selected farmers are given vouchers for each of subsidized input, which they redeem from selected agro-dealers stocking the subsidized inputs.   Vouchers are specific for each region to ensure inputs especially the seeds farmers get are ideal for the region’s weather. Vouchers have enhanced security features to prevent fraud issues and each voucher is input specific.

Ghana where FSP began in 2008 increase in usage of fertilizers among SHFs has been recorded.  In Africa, Ghana is among countries where fertilizer use is the lowest at 8kg per hectare. Currently in some farms fertilizer application per hectare has more than doubled due to FSPs.  Still, this is below the threshold advocated by New Partnership for African Development (NEPAD) of African farms increasing fertilizer application to 50kg per hectare by 2015.

According to Victoria Adongo a Coordinator with Peasant Farmers Association of Ghana, the price of one bag of 50kg fertilizer is subsidized by half. This has resulted in more fertilizer application. According to Justice Amoah of Ghana’s Ministry of Agriculture, in 2010, 100,000 metric tonnes of fertilizer were bought by farmers.  In 2011 there was a 65 percent increase recorded, consequently “yields have increased.

Kenya has the National Accelerated Agricultural Inputs Access Program (NAAIAP) which since 2007 has assisted 2.5 million small holder farmers.  The targeted subsidy program is initially free to poor farmers in homes affected or infected by HIV, disability or children headed households.  “Fertilizer use has increased by 10 percent since 2007,” said a ministry coordinator with the project.  The program gives the poor a bag of top dressing fertilizer and maize seeds for starters.

Poor farmers who flourish through the initial free offering “graduate” to where they can access credit facilities and upgrade farming to business. To cushion SHFs from high prices of fertilizer in 2008/2009 the government imported and subsidized fertilizers.  Today after vetting by a regional agricultural officer farmers pay a third of the cost of a 50kg bag. To get the fertilizer the officer has to visit the farmer, assess his farming and decide to approve or deny him the subsidy.

The workshop however highlighted mistrusts among public agricultural institutions and private input dealers in the FSP. Input dealers questioned government practices lack of transparency when importing viewing it as killing their business.  Private fertilizer companies were accused of illegally buying vouchers from farmers and redeeming them from public fertilizer institutions and re-bagging subsidized fertilizer and selling it back creating price distortions in market.

FAO views the discussions as necessary and is open to providing future platforms for agricultural stakeholders to gather together, and work on right policies and iron out any suspicions.

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By James Karuga, 

James Karuga is a writer from Kenya, who is passionate about sharing information that changes lives and educates people. Knowledge is power.

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