Involve private sector for e-fertiliser subsidy distribution system to succeed

News that the government is finally embracing technology to reach more smallholder farmers in the distribution of subsidised fertiliser is music to the ears of millions of food producers in the country and a grandiose leap to food sufficiency.

The electronic-based fertiliser distribution system is perhaps the biggest plus in the agricultural input access story which has been a long, hard slog.

With the technology that is riding on the impressive penetration of mobile phones in the country, farmers will now be able to access vouchers for the subsidised inputs via their phones. They will then use the vouchers to buy the subsidies at local agro dealers.

Already the ministry of Agriculture Livestock and Fisheries is confident it will reach more than 3.5 million smallholder farmers with the system. By building their profiles, it can then determine how much fertiliser a particular farmer needs, stemming wastage.

But more importantly, the technology harmonises one of the most chaotic distribution channels in the country ensuring the government curbs procurement delays, promotes transparency, tames costs and lessens distance farmers take to access the inputs. For Kenyan farmers have been the most buffeted by the unco-ordinated distribution channel.

A study by Bridgenet Africa, a Pan African institution working with smallholder farmers, in western Kenya found out that six in every 10 farmers had never used the subsidised fertiliser even though it was meant for them. It has always found its way to the hands of “political farmers” who then re-sell it to markets at prohibitive prices.

Farmers have had to walk long distances, some up to 50 kilometres to the nearest distribution point. Scenes of frustrated farmers ready to knock down gates to storage areas and scrambling for the little fertiliser they could get their hands on have been commonplace.

Yet such time and energy should have been concentrated in farms.

Such chaos in the key area of food production seemed to have inspired Nigeria to save face. With the electronic wallet concept, modelled along the same line as Kenya’s, the country was able to tame four decades of corruption within 90 days.

So far, adoption has been phenomenal with more than 10 million farmers being beneficiaries.

The model has also transformed Nigeria’s entire agricultural value chain while opening new frontiers for further investment.

The well calculated roll out has seen a tenfold increase in the number of fertiliser and seed companies that have been registered, transforming it into a $1 billion industry.

Within the first year, the Nigerian banks, which had traditionally shied away from investing in agribusiness, had lent $20 million to agro dealers, fertiliser and seed companies with a zero per cent default rate.

Having become a classic case study of our times, it is no wonder Kenya has borrowed from this model. But in Nigeria it is a process that took time, numerous consultations and prodigious interventions that involved key industry players.

Now in its infancy, the Kenyan model should borrow the Nigerian implementation model too.

For starters, the Kenyan government needs to work closely with the private sector players. One of the key concerns when the government rolled out the subsidy programme was delay in farmers accessing the fertiliser, which ultimately affected planting and harvesting time leading to reduced yields in what has become a vicious cycle.

Then there has been the distance farmers have to travel to access the nearest fertiliser point. The government has called on agro dealers to register with the new model, but that in itself is not enough.

How many agro dealers can the government effectively reach across the country? Tapping the private companies to work with agro dealers in their networks would make the exercise more fruitful and faster.

Take an agro input company such as Elgon Kenya Limited, for example. It prides itself in having one of the most extensive networks of agro dealers spread even in the remotest areas of the country. It would make sense to reach out to these agro dealers to tackle the distance hiccup.

The company’s agronomists and agriculture experts also work closely with the agro dealers by training them on agricultural best practices. These agro dealers have established a working relationship and trust with the farmers which means using them for the roll out would be an easy sell for the model.

Dr Akinwumi Adesina, the former minister of Agriculture and Rural Development in Nigeria, who oversaw the roll out of the e-wallet system, while addressing the 36th Session of the International Fund for Agriculture Development Governing Council, credited the success of the system to removing the government out of the procurement and distribution of fertiliser and seed and creating incentives for private sectors to reach farmers easily.

Kenya could equally borrow from this, allowing government to only play a facilitative role while creating a conducive business environment for private companies to import and package subsidised fertiliser that reaches farmers on time and at pocket friendly prices.

It has successfully worked elsewhere, we can do it too.

Mr Maina is a communications manager with Elgon Kenya, an agro-input company.