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Kenya: Citizens Ponder Fertilizer Prices
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East African Business Week (Kampala)
5 May 2008
Posted to the web 5 May 2008
Samuel Otieno
A row is brewing between the Kenyan government and fertilizer suppliers over how to cut down prices on farm inputs and make them available to the farmers.
Agriculture minister, Mr. William Ruto recently accused the suppliers of hiking prices of fertilizers and other inputs and has since asked the National Cereals and Produce Board (NCPB) to seek alternative ways of reducing prices of top dressing fertilizer Calcium Ammonium Nitrate (CAN) to at least Ksh1,650 (US$26).
He said the commodity is now out of the reach of many deserving farmers. "We have secured enough funds to ensure that the NCPB is going to sell CAN fertilizer at Ksh1,650 and still remain profitable," said Ruto.
The minister, however, did not elaborate on the source of the funds although lately donors have promised to fund government efforts to resettle the displaced people and assist them reconstruct their economic lives.
However, manufactures and suppliers of fertilizers, remain doubtful over the implementation of the minister's directive unless government injects the promised funds to NCPB immediately.
A source at the NCPB told East African Business Week on condition of anonymity that Ruto's suggestion is not likely to be implemented under the prevailing global economic trends unless the government directly, "offered subsidies on imported farm inputs to make them affordable to the farmers".
"It is clear that the current high cost of fertilizer has been influenced by the recent rigorous expansion of cereal production in countries like China, India, Brazil and even the US," said the source.
Said the NCPB official, "Fertiliser importers like MEA have outlined constraints faced in trying to reduce the cost of farm inputs particularly fertilizer and firm's contention that the prevailing prices are controlled by factors beyond Kenya's borders is true."
Giant farm input supplier, MEA, which holds 40% of the fertilizer market in the country, has come out to defend the skyrocketing fertilizer prices, saying the prevailing situation mirrors the trend in the world market.
Recent high demand of the product by cereal- producing countries and the high cost bio-fuels used in the manufacture of the farm input have pushed the prices beyond the financial ability of many Kenyan farmers.
"The prices of fertilizer shot up to an all -time high due to a combination of factors in the global market including the increased cost of fuel and has nothing to do with the post-election violence in Kenya," said MEA's managing director Mr. Eustace Muriuki.
According to Muriuki: "The Government should subside the prices of fertilizer as a way of cushioning the farmers from the escalating cost of production."
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The position by NCPB and MEA had earlier been confirmed by Agriculture permanent secretary Mr. Romano Kiome who took the same position, saying the runaway fertilizer prices were being indicated by conditions beyond Kenyan borders.
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