The price increase is despite over $121 million invested by the Nigerian government in the Presidential Fertiliser Initiative (PFI).
Salifu James needs six to eight 50kg bags of fertiliser for his 35 acres of rice and sugarcane crops. But the 49-year-old farmer could only buy a single bag this year. To make up for the low quantity, he adopted the broadcast method of fertiliser application - spreading the substance uniformly across the field.
"I need the required quantity per acre to get the right result but I bought NPK 20:10:10 fertiliser at N27,000, so I have to manage what I can afford as I have to buy other inputs," Mr James told PREMIUM TIMES at his farm in Igbalu, a community in Imota area of Ikorodu, Lagos State. He knows that the situation will affect his yield at the end of the season but he is helpless.
There are many clusters of farmers producing rice and sugarcane in the community but for many of them, the high price of fertiliser is a major source of headache. Ajulo Mojisola could only cultivate a part of her one-acre farm because of the rising cost of input, especially fertiliser. "I cut the farm size according to the quantity of fertiliser I could afford," Mrs Mojisola said.
Government Intervention
The plight of Lagos State farmers mirrors the challenges farmers are facing across Nigeria despite the intervention of the Nigerian government through the Presidential Fertiliser Initiative (PFI) launched by former President Muhammadu Buhari in December 2016 to ramp up local production and make the critical farm input affordable for farmers.
Through local production, the PFI projected that fertiliser would be sold at N5,500 per 50kg bag to farmers. The Nigeria Sovereign Investment Authority (NSIA) implements the initiative through its subsidiary, NAIC-NPK Limited. The NSIA-supported intervention was designed to stimulate local production of N.P.K. fertiliser and make it available to farmers at affordable prices while also saving the country $200 million annually in the importation of fertilisers and ₦60 billion of the annual budget in fertiliser subsidies.
The initiative improved local fertiliser production, as the country produced over 2.97 million metric tonnes of the commodity. This was achieved through the resuscitation and establishment of 52 blending plants in 19 states in the country.
The PFI also produced over two million metric tonnes, and data revealed a decline in the volume of fertiliser imported over the last four years.
According to the Food and Agriculture Organisation (FAO), the quantity of fertiliser imported into Nigeria dropped steadily to 154 tonnes in 2020, from 23,3032 tonnes in 2016.
But the impact of the initiative has been inadequate as farmers lamented how increasing fertiliser cost affects their output, profitability, and the nation's food sustainability.
A rice farmer, Chinasa Asonye, said she only bought fertiliser once at N5,500 in 2016. She now buys it at N25,000. "My profitability has reduced because fertiliser is very expensive and scarce," she lamented.
Due to the high cost of fertiliser, Mrs Asonye said she has to augment it with rice husk but the output has been poor.
Sky-high fertiliser prices
A fertiliser seller, AbdulRauf Suleja, said he gets his supply within the country but sells far above N5,500. "The last time I sold for N5,500 was in 2017. Now a bag goes for not less than N19,000," he said.
Kefas Isuwa, another retailer, said the price varies as he sells the Golden Fertiliser brand for N27,800 and Synergy brand for N18,500. "These prices are above N5,500," he said, adding that his profit margin is usually very poor at just N500 due to the high market price of fertiliser.
"The selling price variation is because of the location of supply. To be candid, getting fertiliser from Nigeria is not cheaper," Mr Kefas said.
For Mikailu Kasimu, another retailer, purchasing the commodity from the blending plants can be quite difficult. He noted that on average, he gets it at N17,500.
Underlying Concerns
The National President of the All Farmers Association of Nigeria (AFAN), Kabir Ibrahim, said the price increase is due to scarcity of the products. He noted that the impact of the PFI initiative on price has been relatively low due to supply concerns.
"In 2021, we were buying fertiliser for N11,200 as against the PFI N5,500. This is because the NSIA allowed blenders to buy directly from suppliers and the subsidy was reviewed," Mr Ibrahim pointed out. The AFAN boss noted that the NSIA now allows blenders to procure directly, making it quite expensive for farmers.
An agricultural consultant and farmer, Hassan Dalha, said prices rose this year by about 80 per cent. He attributed this to the removal of subsidies on fertiliser and a ban on importation. He said the situation will negatively impact food prices after harvest this year.
"You cannot compromise the use of fertiliser per hectare. For example, for rice, you need six bags, depending on the status of the soil. Just because the fertiliser price has increased, you now put two bags, it doesn't work that way. You have to put it in the right quantity. This is affecting farmers' profit," Mr Hassan added.
Despite over $121 million invested in the PFI, farmers still purchase fertiliser at astronomical prices. This has undermined the objective of PFI to help farmers prosper and reduce food inflation.
Nigeria's annual inflation rate rose to 22.79 per cent in June from 22.41 per cent in the previous month, according to the National Bureau of Statistics (NBS) (NBS) in its latest report. The statistics office said the June inflation rate showed an increase of 0.38 per cent points when compared to May 2023 headline inflation rate.
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"The average annual rate of food inflation for the twelve months ending June 2023 over the previous twelve-month average was 24.03 per cent. This was a 5.41 per cent points increase from the average annual rate of change recorded in June 2022 (18.62 per cent)," it said.
Way Forward
Speaking on the possible way out, Bongo Adi, a professor of Economics at the Lagos Business School, said: "The solutions should be looked at holistically. The government should take the responsibilities and tackle the problem at the primary level".
For Mr Ibrahim, the president of AFAN, "the best way is to rejuvenate the Presidential Fertiliser Initiative (PFI) by making the blenders to produce optimally and the government should offtake it to give subsidy directly to farmers. "That way, the private sector will take over the supply of fertiliser and farmers will get it at the best prices possible."
Mr Dalha, in his submission, said better implementation of government intervention in fertiliser and price control would make the commodity available at an affordable rate. He advised that government should not be involved in selling fertiliser directly to farmers because many of the potential beneficiaries would not be real farmers but "paper farmers".
"There should be proper monitoring and evaluation of the production and movement of fertiliser, and the regulation should be enforced," he said.
