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State allocates Sh3.6bn for fertiliser subsidy plan – Business Daily

Workers offload fertiliser from a truck to a godown at the National Cereals and Produce Board, Eldoret depot. FILE PHOTO | NMG
The Treasury has allocated Sh3.6 billion for the fertiliser subsidy programme following a presidential directive last week to bring down the cost of the commodity by nearly half.
At the same time, the Ministry of Agriculture has capped the number of bags at 100 per farmer, anticipating heightened demand for the 1.4 million bags that are expected to be made available ahead of the short rains season.
Farmers are expected to pay Sh3,500 for a 50-kilogramme bag of the commodity, down from Sh6,500, and will be supplied via National Cereals and Produce Board (NCPB) depots.
“To actualise presidential directive, the subsidised fertiliser programme will start with counties undertaking planting during the short rains season of 2022,” said Agriculture Principal Secretary Francis Owino.
Dr Owino said Sh3.55 billion will subsidise 71,000 metric tonnes of assorted fertiliser to farmers, which will sell at varying prices depending on the type.
A 50-kilo bag of DAP planting fertiliser will go at Sh3,500, with NPK selling at Sh3,275. Top dressing fertiliser like CAN and Urea will sell at Sh2,875 and Sh3,500 respectively.
The state estimates that at least 1.4 million acres will be planted in the coming short rain season. The short rain crop plays a key role in Kenya’s food security as it supplements the main season harvest that is planted in March.
President William Ruto in his inaugural speech last week promised that the cost of fertiliser will be brought down to Sh3,500 to enable farmers access it with ease to boost food security in the country.
The government had in April offered farmers subsidy on fertiliser after the price shot to a historic high. However, the programme was not effective due to the shortage of the commodity in the market, which saw some farmers plant without the supplement.
Fertiliser normally plays a key role in production as it adds important nutrients to the soil to boost yields. Most of the Kenyan soils have been depleted of key nutrients.
The directive comes as a relief to farmers who have been grappling with high cost of fertiliser in the market, which has mainly been occasioned by the ongoing war between Russia and Ukraine that has disrupted logistics with most goods unable to cross the Black Sea.
The new administration sees the fertiliser subsidy plan for food producers as a more viable answer to the runaway food prices in Kenya compared to subsidising consumer prices.
The State had in July inked a deal with millers to cut the price of maize flour to Sh100 from upwards of Sh200 under a Sh8 billion Treasury-backed subsidy programme.
The plan, which ended last month, was however dogged by supply problems as the cheaper flour was hardly available on shop shelves, partly due to alleged hoarding by wholesalers in anticipation that they would sell it at a higher price once the subsidy was terminated.
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Joseph Muongi

Financial.co.ke was founded by Mr. Joseph Muongi Kamau. He holds a Master of Science in Finance, Bachelors of Science in Actuarial Science and a Certificate of proficiencty in insurance. He's also the lead financial consultant.