Ethiopia: Govt Set to Introduce New Fertilizer Procurement System Amid Ongoing Supply Crisis

31 July 2023
Addis Standard (Addis Ababa)

Addis Abeba — In a bid to address the perennial issue of timely fertilizer supply for millions of small-scale farmers in Ethiopia, the government is poised to launch a new procurement system. The proposed fertilizer procurement system allows for contracts with suppliers to be extended up to three years, effectively shortening the time it takes to procure the agricultural input by a maximum of four months.

Government officials have indicated that this new system has been introduced in response to the instability of the current system. "The current fertilizer purchase system is volatile," Girma Amente (PhD), minister of agriculture, said during a press briefing held on 29 July, 2023. Unlike the current arrangement of one-year agreements with suppliers, the newly proposed fertilizer procurement system will allow for the purchase and supply of fertilizer for a three-year period, according to the Minister.

The Ethiopian Agricultural Business Corporation (EABC) is the exclusive importer of fertilizers in Ethiopia. Once it receives the green light from the government, the corporation initiates an annual international tender process every August to identify the most suitable candidate for supplying fertilizers for the upcoming main harvesting season. This practice has been consistently followed since the corporation's establishment in 2016. Selecting a supplier can take as long as four months.

Fertilizer holds significant importance as a strategic commodity in Ethiopia's import lineup. In preparation for the approaching harvesting season, the country has invested over one billion dollars to secure approximately 14 million quintals of NPS, NPSB and Urea fertilizers. This expenditure accounts for 6.5% of Ethiopia's annual import bill.

In recent years, the delivery of fertilizers to small-scale farmers has faced significant disruptions. The global fertilizer trade, which has already been affected by economic constraints before 2021, has now been further impacted by the global energy crisis resulting from the Russia-Ukraine conflict. These two countries, along with Belarus, play crucial roles as major players in the global fertilizer industry.

To overcome supply disruptions, the corporation launched an international tender two months earlier than usual last year. However, despite this proactive approach, ensuring the timely delivery of fertilizers to Ethiopian farmers has presented challenges.

According to Girma, out of the 13.6 million quintals of procured fertilizers, only 68% have reached the hands of farmers.

Due to a severe shortage of fertilizers, numerous farmers are currently confronting the looming risk of missing out on the crucial planting season. Teff, wheat, and barley are among the key crops that are anticipated to be planted in June and July during the meher season, which runs up to December. The repercussions of these challenges have sparked widespread demonstrations throughout the nation, with protest focal points arising in various regions, including Hadiya Zone in the former SNNP region as well as Bahir Dar in the Amhara region.

Amidst the disruptions in global supply chains, the availability of fertilizers is facing significant hurdles due to logistical difficulties spanning from Djibouti port to central warehouses and, eventually, cooperative unions.

According to the Ministry of Transport and Logistics, a campaign initiated last week has successfully facilitated the transportation of 600,000 quintals of fertilizer from the Djibouti port. This achievement was realized within a mere three-day timeframe. To accomplish this feat, a fleet of 439 cross-border heavy trucks and 25 train wagons were deployed. However, despite these commendable efforts, there have been notable challenges in the distribution process of the fertilizer.

The delay persists even after the fertilizers have reached the central warehouses, with one specifically located inside the premises of the corporation in the Akaki Kality district. On July 27, 2023, officials from the Ministry of Agriculture discovered a sizeable amount of fertilizer that had been kept at the corporation's warehouse for more than a week. The next day, officials of the corporation issued an official statement assuring the public that proactive measures have been implemented to improve the unloading and distribution procedures for fertilizers arriving from Djibouti port. AS

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