Munya stops fertiliser subsidy programme to tame cartels

The Agriculture ministry has suspended the subsidised fertiliser programme and dissolved the Strategic Food Reserve (SFR) in restructuring measures aimed at revamping the sector.

Cabinet Secretary Peter Munya, while announcing the reforms during a meeting with farmers in the North Rift region at the weekend, said the government will instead be sourcing low-cost but quality fertiliser from manufacturers at Sh2,300 per bag which will be sold on agency basis.

“We have talked to those selling the fertilisers and we have decided that the government will not procure subsidised fertiliser this planting season in order to protect our farmers from cartels.

BUY FROM MANUFACTURERS

“Farmers will buy fertiliser from manufacturers through the National Cereals and Produce Board (NCPB) and Kenya National Trading Corporation (KNTC) at a cost of 2,300 across the country,” Mr Munya said.

Under the subsidy programme, fertiliser for planting was going for Sh1,800 while that used for top dressing was being sold at Sh1,500 per bag.

It is now retailing at Sh3,200 which has pushed production costs higher, thus hurting small-scale farmers.

The Agriculture CS said the reforms are aimed at weeding out cartels in the fertiliser supply chain.

He added that in the next planting season, cereals growers will be buying fertiliser through the voucher system, noting that its piloting has already started.

VOUCHER SYSTEM

“Just bear with us this planting season in buying the fertiliser from NCPB and KNTC but from next season, we will be using the voucher system in order to block the cartels who have been frustrating our farmers,” Mr Munya said.

SFR, which has been responsible for buying emergency stock, will now operate as a department within NCPB and is mandated to carry out market surveys and establish the appropriate time of buying produce from farmers.

Mr Munya further disclosed that the government has been losing Sh2 billion annually in bureaucracy due to conflict in administrative and financial management of the two State agencies.

“The Cabinet last week agreed that there is no need of having both SFR and NCPB doing the same thing and sometimes getting embroiled in payment conflicts leading to inefficiency of the two State agencies, hence we must streamline,” said the CS.

PAYMENTS

The SFR, the managers of emergency food stocks, were last year at loggerheads with NCPB over Sh11 billion owed for previous maize deliveries.

Recently, Agriculture Principal Secretary Hamadi Boga said that SFR owes NCPB Sh7 billion while NCPB is holding Sh8.7 billion that belongs to SFR and none was honouring its obligation.

SFR Board Chairman Noah Wekesa said it was up to the Ministry of Agriculture to institute the reforms to enhance efficiency and food security.

“As a board, we have executed our duties to the satisfaction of farmers as attested to in the current attractive maize prices of above Sh3,000 per 90kg bag but the Ministry of Agriculture has the mandate to institute reforms beneficial to farmers,” Dr Wekesa said.

He said SFR has allocated Sh10 billion to buy maize for emergency stocks from local and external markets.

PYRETHRUM AND COTTON

At the same time, Mr Munya revealed plans to revive the pyrethrum and cotton sub-sectors and streamlining of the dairy sector in a bid to cushion farmers from losses.

The raft of reforms come after productivity in agriculture shrank by 3.2 per cent on the backdrop of delayed long rains last year, dipping its contribution to the GDP, the latest budget policy statement shows.

Consequently, the government has proposed a raft of measures to shore up the sector, which is the mainstay of the economy.

The period under review was also characterised by an invasion of the Fall armyworm in the maize belt of the Rift Valley and failure of the fertiliser subsidy programme due to procurement issues.

The resultant high prices of key food items raised food inflation from 2.6 per cent in December 2018 to 9.3 per cent in December 2019.