Investment in fertiliser trade has almost doubled since the government privatised the import and distribution of the input last year.
According to research by the Ministry of Agriculture, since the privatisation of fertiliser importation and distribution, there has been an increase of 46 per cent in investment in fertiliser business; that is between 2013 season A (August-December) and 2014 seasom A (August-December).
Charles Murekezi, the co-ordinator for fertilizer distribution at the Ministry of Agriculture, said total investment hit Rwf5.025b during season A in 2014, up from Rwf2.7b in 2013 season A.
Investments in the Western Province were at RwfRwf1.7b last season, up from Rwf969.9m in 2013 season A, Rwf562.5m was invested by dealers in Southern Province during season A of 2014 compared to Rwf355.6m a year before, while traders in Northern Province injected in Rwf1.9b during season A in 2014, up from Rwf1.3b a similar season last year.
“After the privatisation of fertiliser trade, there was a significant rise in uptake with the Eastern Province experiencing huge increases of fertiliser use amounting to 85 per cent, Northern Province 33 per cent, while fertiliser use moved up by 37 per cent in the Southern Province and a 43 per cent growth was recorded in the Western Province.
“This performance is expected to continue and grow further in the coming years despite some demand constraints in some districts,” Murekezi said at the recent agro-dealers and importers sensitisation workshop organised by the Ministry of Agriculture in partnership with International Fertiliser Development Centre (IFDC), an agro-promotion NGO.
According to available statistics, Rwanda imports over 40,000 tonnes of fertilisers per year.
IFDC supports local agro-dealers and promotes hi-tech-driven input distribution, monitoring and management under its PReFER project, which is funded by USAID.
The agriculture ministry changed fertiliser import and distribution policy to encourage participation of the private sector.
So far, two companies are licensed by the agriculture ministry to import and distribute fertilisers to over 140 retailers across the country.
The government had been importing and distributing fertilisers to farmers on credit, but stopped last year when it brought in the two private sector players to import and supply the input.
The privatisation is on a pilot phase with one of the companies supplying 10 districts while the second one serves 20 districts under the subsidy programme. He says there are other dealers who import and sell fertilisers according to market rates.
Murekezi said the ministry decided to privatise the business mainly due to increased difficulty in recovering payments from farmers after supplying the fertilisers on credit. “The move is expected to stimulate fertiliser demand and increase agricultural output and, consquently, agriculture market development,” Murekezi said.
Although dealers had expressed fears over how the ministry will ensure that quality fertilisers are imported by individual firms, Murekezi said fertilisers will be tested, evaluated and certified by the Rwanda Bureau of Standars.
“In addition to that, there are fertiliser inspectors at the district level to ensure that suppliers of low quality fertilisers are apprehended,” he said.
Murekezi also said the ministry set a price ceiling to ensure that all can farmers afford fertilisers.
He said the Ministry of Agriculture has already deployed district fertiliser inspectors tasked with ensuring that the price ceiling is being respected by all fertiliser dealers across the country.
He was also optimistic that with increase in the number of distributors, competition will force dealers to sell at good prices.
Murekezi explained that in case a dealer tries to sell the input at a price above the ceiling, there are help lines farmers can call to report such traders or any other complaints.
He urged dealers to continue educating farmers to further increase their interest in using fertilisers to boost crop production.
David Gisselquist, the International Fertiliser Development Centre chief of party and policy advisor, said they are hopeful by mid-next year the sector will be fully liberalised “to bring in more private sector players.
This is important to bring down prices of fertilisers as well as promote efficient distribution networks”.
He pointed out that the country has been importing over 40,000 tonnes of fertlisers per annum, which he hopes will go up after full liberalisation of the sector.
“The farmers have appreciated the development as they can get the fertilisers as and when they need them from accredited suppliers,” he said.
He was also certain fertiliser quality will not be compromised, saying the government has good systems in place to track dealers and make sure no one sells fake fertilisers.
“Dealers have also been trained; and everyone knows who sells fertilisers, making it hard for traders to supply fake inputs,” Gisselquist explained in an interview with Business Times.
Donathali Kankesha, a dealer in Kicukiro District, said the new system has eased access to fertilisers.
“More farmers are now using fertilisers as the input is readily available across the country,” Kankesha said.
She said last season her firm sold over 60 tonnes of fertilisers. She, however, noted that there is low demand presently because this time of the year most farmers do not plant maize.
Joseph Habururema, the chairperson of the Rubavu Agro-dealers Association, said when traders get supplies importers, they sell directly to farmers; those with subsidy vouchers and those who can afford to pay the full amount.
He also added since the government privatised the fertiliser trade, the number of farmers using fertilisers has increased.
Habururema attributed the increase to the fact that there is always ready supply of fertilisers all the time.