ESAFA Conference Highlights: Effective policies for fertilizers trade in Africa

05 Dec 2017

With a conducive policy environment, Africa can boost investment in the regional fertilizer trade to support farmers raise productivity and food security, fertilizer associations say.

While a strategic input, fertilizers are largely inaccessible and unaffordable to many African smallholder farmers who are challenged by low yields and poor productivity.

The absence of appropriate fertilizer policies is a barrier to agribusiness development in Sub-Saharan Africa, a region that needs to urgently tackle food and nutritional insecurity.

Tanzania – a country with a diverse agriculture sector where crop production accounts for more than 55 percent of the agriculture GDP – has developed and implemented attractive fertilizer policies that can serve as a model for Africa. Tanzania is the second biggest economy within the East Africa Community, a regional intergovernmental organization of six countries.

Keen to boost agriculture investment in the region, the ECA has developed the Harmonized Regulatory Instruments and Procedures for the fertilizer market.

Tanzania Fertilizer Regulatory Authority (TFRA) Chairman, Dr. Mbette Mshindo Msolla, said, Tanzania has promoted investment in the fertilizer trade and addressed the challenge of poor quality fertilizers by developing an inclusive Act on fertilizers.

As an autonomous body, the TFRA facilitates regulation on the importation, manufacturing and distribution of fertilizers from port to farm gate.

Through effective monitoring of the fertilizer value chain, the TFRA has reduced trade in fake fertilizers, a serious problem for farmers. 100 fertilizer inspectors and 14 fertilizer analysts have been trained in Tanzania to prevent the trade of fake fertilizers. The country is also building an accredited lab for analyzing fertilizers as part of measures to ensure quality fertilizers.

Dr. Msolla says harmonized fertilizer regulations and policies can support a viable fertilizer industry in Africa. Policy harmonization needs to include the development of standards and procedures, markets and infrastructure as well as strengthen research and development.

“To have a successful regional fertilizer programme, we need to create a policy environment conducive to fertilizer market development,” Dr. Msolla said, noting that improving efficiency along the fertilizer value chain is key to developing efficient trade corridors and rationalizing fertilizer policies and products.

EAC and Southern Africa Development Community (SADC) should harmonize regulations to facilitate cross-border fertilizer trade, improve access and reduce fertilizer costs to help farmers improve productivity, said Dr. Msolla.

Some African countries have implemented fertilizer subsidy programmes as a way for farmers to access and use more fertilizers. However, subsidies have also been seen to exclude private sector participation in the fertilizer market.

“Subsidies are fine as long as they have a known time frame of support and should be aimed at improving availability and access,” said Dr. Msolla.

In Mozambique, the Mozambican Association for Fertilizers (AMOFERT) has been instrumental in developing and successful implementing fertilizer regulations.

“Mozambique does not have a fertilizer Act yet and we realized that it will take a long time to have one in place and through consultations we have been able to get regulations in place to give direction for the fertilizer trade,” says AMOFERT President, Carlos Zandamela. “A draft Fertilizer Act has been submitted to government for consideration.”

AMOFERT was formed in 2014 as a platform bringing together importers, agro dealers government, private sector, donors, and NGO representatives to help improve fertilizer business in Mozambique.

“There have been concern from the private sector that it is not easy to do fertilizer business in Mozambique and this is one reason for the low use of fertilizer and its high cost,” he said, adding that, “There has also been concern on the bureaucracy faced when the fertilizers land at the ports to the time they reach the farmers. A solution is to eliminate some taxes and make fertilizers cheaper.”

The challenge of high fertilizer costs, is in part, a result of government tax on the input. As a result of this, Zandamela said AMOFERT was currently undertaking research studies to understand the challenges and identify solutions to improving the fertilizer trade and agribusiness in Mozambique.

“There are cases where fertilizer lands in the Nacala and Beira ports but all the paperwork has to be processed in Maputo and this constrains business operations. Smaller agro dealers have to go to Maputo or Nacala and this is a problem if they are far from the port,” said Zandamela. “We are working with AFAP to develop hub agro dealers to bring fertilizers closer to the farmers on time.”

Mozambique has trained 40 inspectors and 40 lab technicians. Three regional soil labs in the north, center and south regions of the country will be upgraded for fertilizer testing.

Zandamela says policy development is important in supporting regional fertilizer trade and agribusiness. His association is advocating for the elimination of fees and taxes on fertilizers and materials for the production of fertilizers. This would in turn eliminate inefficiencies on fertilizer value chains.

Mozambique is currently implementing a pilot subsidy programme among 22 500 farmers in Manica, Sofala, Zambezia and Nampula provinces to use electronic vouchers in buying fertilizers under a programme funded by the European Union.