2023/24 fertiliser subsidy under scrutiny
International Food Policy Research Institute (Ifpri) has projected that farmers should expect to pay as much as K37 000 to buy one bag of fertiliser under the Affordable Inputs Programme (AIP) in the 2023/24 farming season.
The projection means government will have to spend K238 billion on AIP to subsidise 1.7 million farming households.
In the 2023/24 fiscal budget rolling out on April 1, government has budgeted K117 billion for AIP with the Japanese Government pledging to pump K5 billion into the subsidy budget.
However, in its analysis Ifpri says at the current price of K70 000 per bag, and with 3.4 million bags required, governments contribution is expected to be at K33 000 per bag, implying that a farmer contribution will be at K37 000.
Reads the report in part: “If prices remain at today’s level, the AIP will require a total of K238 billion to procure the fertiliser needed to supply 1.75 million beneficiaries, of which K123 billion will be recuperated in the form of farmer contributions.
“The tricky part is that the whole K238 billion in fertiliser will need to be procured and pre-positioned ahead of the growing season so that farmers can access their inputs on time.”
The report argues that this will require a line of short-term credit, which the government or its heavily indebted parastatals may be hard-pressed to access.
Produced by researchers Jan Duchoslav and Joachim De Weerdt, the report urges government to communicate, as soon as possible, credible commitments to pre-approved private suppliers that a total of 3.4 million bags of fertiliser will attract a government contribution of K33 000 each.
It admits that to contribute more within the allocated budget, the programme would require further donations, as most of the fertiliser donated to this year’s AIP has been distributed, and no other donations seem to be in the offing.
During a meeting with the Parliamentary budget cluster on Agriculture and Food Security and Natural Resources and Climate Change recently, Ministry of Agriculture AIP coordinator Justin Kagona said the proposed allocation of K117 billion for AIP will target 1.750 beneficiaries.
He further confirmed that the fertiliser was being calculated at an average price of K70 000 per bag.
“Currently, the price of a fertiliser bag is ranging from K65 000 to K70 000. For planning purposes, we are putting it at K70 000 per bag. But government is yet to make a decision on the amount for farmer contribution,” said Kagoma.
The 2022/2023 AIP faced various challenges which saw farmers struggling to access fertiliser.
Farmers started accessing fertiliser while their plants had already overgrown. Some farmers also failed to access fertiliser despite paying for the commodity.
