NAIROBI, Kenya – Recent reforms in Kenya’s fertilizer distribution system have resulted in a significant 20.5% decrease in fertilizer usage across the country, according to the 2024 Africa Agriculture Status Report by the Alliance for a Green Revolution in Africa (AGRA).
The consumption plummeted from 835,000 tons in 2020 to 663,400 tons in 2022, with further declines expected in 2023.
The drop is attributed to changes in the National Fertilizer Subsidy Programme (NFSP II), which saw the government transition from using micro, small, and medium-sized enterprises (MSMEs) for last-mile delivery to distributing subsidized fertilizer through the state-owned National Cereals and Produce Board (NCPB).
This policy shift, aimed at enhancing traceability and accountability through an e-voucher system, has inadvertently sidelined private sector input distribution networks.
Consequently, volumes handled by last-mile agro-dealers have dropped by 77 to 88 percent, forcing many small and medium enterprises (SMEs) out of business.
AGRA’s report warns that this disruption could lead to long-term consequences for the sector, as medium to large-scale fertilizer blenders face the prospect of downscaling operations due to unsold stock.
This represents a reversal in the growth trajectory of a sector traditionally driven by private investment.
Despite increased local blending capacity, which rose from 22,100 tons per year in 2004 to 73,000 tons per year by 2022, the report suggests that the policy changes may stifle further private sector investment.
AGRA President Agnes Kalibata emphasized the need to support MSMEs to drive food systems transformation and sustainable growth, particularly by integrating smallholder farmers into the agribusiness value chain.
The findings have sparked debate among stakeholders, with Soy MP David Kiplagat advocating for a return to the voucher system to allow farmers to purchase fertilizers from retailers at subsidized prices, should shortages occur at NCPB depots.
The consumption plummeted from 835,000 tons in 2020 to 663,400 tons in 2022, with further declines expected in 2023.
The drop is attributed to changes in the National Fertilizer Subsidy Programme (NFSP II), which saw the government transition from using micro, small, and medium-sized enterprises (MSMEs) for last-mile delivery to distributing subsidized fertilizer through the state-owned National Cereals and Produce Board (NCPB).
This policy shift, aimed at enhancing traceability and accountability through an e-voucher system, has inadvertently sidelined private sector input distribution networks.
Consequently, volumes handled by last-mile agro-dealers have dropped by 77 to 88 percent, forcing many small and medium enterprises (SMEs) out of business.
AGRA’s report warns that this disruption could lead to long-term consequences for the sector, as medium to large-scale fertilizer blenders face the prospect of downscaling operations due to unsold stock.
This represents a reversal in the growth trajectory of a sector traditionally driven by private investment.
Despite increased local blending capacity, which rose from 22,100 tons per year in 2004 to 73,000 tons per year by 2022, the report suggests that the policy changes may stifle further private sector investment.
AGRA President Agnes Kalibata emphasized the need to support MSMEs to drive food systems transformation and sustainable growth, particularly by integrating smallholder farmers into the agribusiness value chain.
The findings have sparked debate among stakeholders, with Soy MP David Kiplagat advocating for a return to the voucher system to allow farmers to purchase fertilizers from retailers at subsidized prices, should shortages occur at NCPB depots.
