Fertiliser dealers protest expansion of subsidy plan
The private sector’s annual imports up to 600,000 tonnes bags of fertiliser can only sell in the local market whenever it arrives earlier than the government’s consignment of 500,000 tonnes. PHOTO | FILE
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The government, which used to offer subsidised fertiliser to maize farmers, has now expanded its intervention to cover other cash crops such as coffee, sugarcane and tea.
Private fertiliser dealers have opposed the move saying the subsidised fertiliser has made it impossible to sell their commodity to farmers at commercial prices.
The distributors said they have been forced to cut import of the input by between 30 and 50 per cent.
Private fertiliser distributors have threatened to abandon the business after the government broadened its subsidy programme to cover major cash crops, significantly reducing their market share.
Through their lobby, the Fertiliser Association of Kenya (FAK), the distributors said they have been forced to cut import of the input by between 30 and 50 per cent.
“We are unable to sell our stocks because of the government’s subsidy programme that has now been extended to other crops, we are simply not making profit and we are contemplating leaving the business,” said FAK chairman Eustace Muriuki.
The government which used to offer subsidised fertiliser to maize farmers has since expanded its intervention to cover other cash crops such as coffee, sugarcane and tea.
Mr Muriuki said some of the private fertiliser dealers have been forced to carry their stocks over a period of two years for lack of market after the government took over the same market that the relied on.
The subsidised fertiliser has made it impossible to sell their commodity to farmers at commercial prices, the lobby said.
The government imports the supplement through the National Cereals and Produce Board and sells it to farmers at half price while the remaining half is met by the government through its subsidy programme.
When fertiliser arrives at the port of Mombasa, a 50 kilogramme bag of DAP would retail at Sh2,800 commercially and the cost goes up when it is transported to other towns such as Eldoret. The same quantity of government fertiliser will sell at Sh1,800 countrywide.
Currently, growers are buying a 50 kilogramme bag of DAP and NPK fertiliser at Sh1,800 down from Sh4,500, CAN at Sh1,500, Urea at Sh1,500 and Sulphate of Ammonia (SSP )at Sh1,300 from Sh4,000.
The private sector’s annual imports up to 600,000 tonnes bags of fertiliser can only sell in the local market whenever it arrives earlier than the government’s consignment of 500,000 tonnes.
The country’s annual demand for the input is estimated as 500,000 tonnes which the government alone can meet.
The State, in partnership with the Toyota Tsusho, plans to establish a fertiliser plant in Eldoret to enable farmers to access the supplement at a reduced price, further signalling difficult times ahead for FAK members.
The ministry of agriculture estimates that the cost of a bag of fertiliser will drop by 40 percent once it is manufactured locally.
The firm was expected to start construction of the plant before end of last year, with the ministry targeting the first production of Nitrogen Potassium Calcium (NPK) fertiliser this year, but the plan seems to be behind schedule.
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