Data cast doubt on success of Kenya’s fertiliser subsidy


Workers arrange bags of subsidised fertilizer at the National Cereals and Produce Board depot in Elburgon, Nakuru County. FILE PHOTO | JOHN NJOROGE | NMG

President William Ruto’s plan to bring down prices of food by providing cheap fertilisers to farmers has been tried before by his predecessors, with varied degrees of success, but failed to achieve the intended goals.

His predecessors — Mwai Kibaki and Uhuru Kenyatta — tried this experiment of fertiliser subsidy with very little success, leading the latter to end the programme as it became clear that taxpayers were throwing good money after bad.

But now, with prices of food soaring due to multiple shocks including a debilitating drought, the ongoing war in Ukraine, the lingering effects of Covid-19 and the rise in interest rates in developed countries, Dr Ruto’s government has rekindled the subsidy to help bring down prices of such food crops as maize.

“If we had not withdrawn the fertiliser subsidy…stuck to the plan on food security…we wouldn’t be in the crisis we are in today,” said Ruto in July on rising prices of food commodities.

Official figures, however, tell a different story about the fertiliser subsidy.

Since 2010, the growth in the value of chemical fertilisers used by farmers has not necessarily led to—or had a positive correlation with— an increase in the production of maize, a staple crop that uses the most fertiliser in the country.

If anything, the relationship between the growth in the value of chemical fertiliser and the growth in maize production has been inverse.

Rather than a percentage increase in chemical fertiliser leading to — or being correlated with — a jump in the percentage in the quantity of maize produced, they have gone in opposite directions, analysis of official data shows.

For example, in 2011, when the value of chemical fertiliser used in planting jumped by 56.1 percent to Sh9.4 billion from Sh6 billion in the previous year, maize production declined by 3.9 percent.

In 2011, Kenya produced 34.4 million bags, a drop from 35.8 million bags in the previous year.

Things were different in 2012 when chemical fertilisers — including ammonium sulphate, ammonium phosphate, ammonium nitrate, urea and ammonium chloride — used dropped by 17.7 per cent to Sh7.7 billion.

Rather than maize production going down, it increased by 21.8 percent to 41.9 million bags, an indicator that other factors other than fertiliser use were the main driver of better harvests in Kenya.

Between 2010 and 2021, the value of chemical fertilisers used increased by 240 percent from Sh6 billion to Sh20.5 billion.

However, production of maize — the main beneficiary of the subsidy through the National Cereals and Produce Board — increased by only 2.5 per cent in the same period.

Dr Timothy Njagi, a research fellow based at Tegemeo Institute, a policy think tank, says several factors have led to this paradox, including the fact that subsidised fertiliser did not reach many farmers.

Moreover, there has been non-optimal use of fertiliser. For example, says Dr Njagi, when farmers were asked to switch from the commonly used Di-ammonium Phosphate (DAP) due to increased acidity of the soil to NPK fertiliser, most of them continued using one bag of the latter per acre as they used to do with DAP instead of two.

“This has led to low productivity,” said Dr Njagi.

Perhaps one of the biggest problems has been the lack of knowledge by farmers, which has seen them use the wrong fertilisers, partly because most of them do not know the micronutrients lacking in the soils.

Expectedly, the subsidy programme was also bogged down by government bureaucracy with the cheap fertiliser often reaching the farmers late into the planting cycle.

The World Bank in its April 2018 Kenya Economic Update, talked of Kenya having an “untargeted” and “regressive” fertiliser input subsidy that was not only costly but also benefited large and medium-sized farmers even as it “led to crowding of private sector retail fertiliser markets in maize-growing areas”.

President Mwai Kibaki started the subsidy programme in 2008, which the Uhuru Kenyatta regime inherited to boost food production by making this critical agricultural input affordable, especially to the majority of smallholder farmers grappling with high costs.

President Ruto’s administration has said it would use Safaricom’s platform to roll out the fertiliser subsidy for the next planting season, allowing more than 10 million farmers to access the giant telco’s technology under the government-backed e-wallet system.

“We shall be working with Safaricom on the implementation of this e-subsidy programme to ensure that it is accomplished. We have worked with them on a smaller project before and it was successful,” said Agriculture PS Kellow Harsama.

E-subsidy is an electronic vouchering solution that makes use of data and Short Message Service (SMS) to manage the issuing, redemption and reconciliation of vouchers on behalf of the Ministry of Agriculture.

Once details have been captured, the growers will receive a text message from the service provider confirming their registration details, the agro-dealers participating in their locality and the availability of fertiliser.

The government will conduct soil mapping and testing exercises across the country ahead of the distribution of subsidised fertiliser to help determine the type of supplement that will be supplied in a given region, ending a mismatch that has characterised the use of fertiliser by farmers.

A World Bank report had vouched for a smart subsidy or better targeted, scheme for the millions of poor smallholder farmers that can’t afford the input benefit.

This would then translate into an increase in yields as three-quarters of farming in Kenya is done by smallholder farmers or those who own two hectares and below.

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Note: The results are not exact but very close to the actual.