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Rising price of fertilizer jolts farmers

By Gbenga Akinfenwa (Lagos) and Joke Falaju (Abuja)
19 December 2021   |   4:05 am
As the dry season planting beckons, farmers seem to be in dilemma over the scarcity of fertilizer.

Fertilizer

As the dry season planting beckons, farmers seem to be in dilemma over the scarcity of fertilizer.
 
Currently, a bag of fertilizer, which previously sells for between N5, 000 and N5, 500 is now selling for between N12, 500 and N15, 000, a development experts claimed will pose serious challenges to the farmers.
 
According to stakeholders in the sector, the development can further worsen the lingering food crisis, as the farmers are becoming helpless. They are worried that the country appears to be returning gradually to the old fertilizer distribution regime, when access to the product was cumbersome.
 


Investigations showed that during the old distribution regime, fertilizers were diverted by the political elites for personal gains and when supplied they are either adulterated or underweight.
 
Between 1980 and 2010, the country lost about N776b, an average of N26.3b yearly to corruption under the old fertilizer distribution template.
 
During his tenure as the Minister of Agriculture, the President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, made drastic efforts to address the problem. The move eventually led to the introduction of the Growth Enhancement Scheme (GES), where farmers used cell phones to access fertilizers via the electronic wallet (E-wallet).
   
Under the GES programme, the Federal Government provided 25 per cent; the states also provided 25 per cent, while the farmers’ pay 50 per cent for each bag of the product supplied to them.
 
According to the National Association of Nigerian Traders (NANTS) in 2015, with the GES, via the e-wallet at 50 per cent subsidy, 1.2 million farmers reportedly bought a maximum of two bags of fertilizer in 120 days.

However, despite the loud applause that complemented the GES programme, where fertilizers were supplied through SMS via their phones, in addition to access to subsidised farm inputs, the reverse has been the case since 2015 when the initiative was stopped abruptly.

Few months ago, the former Minister, Sabo Nanono, revealed that over 33 fertilizer blending plants were producing about five million metric tons of fertilizer yearly and many more still coming on board, expressing optimism that Nigeria would have no business importing fertilizer by 2023.
 
Said Nanono: “In the next two to three years, we may not need to be importing any fertilizer again into the country, more importantly I want the blending plant to know that we can produce up to the capacity that we need, what we need to do is to fill in the gap and take the product to the farmers.”

But the simple question that counters former minister’s narration is the scarcity of the product in the market.

The Managing Director of Prime Fertilizer, Felix Okonti told The Guardian that the global increase in the price of ammonia, an essential ingredient in fertilizer production is one of the factors responsible for the current situation.

“The global retail prices of Ammonia monitored by DTN revealed a surge in the price of Ammonia by 38 per cent between October and November this year putting the price at $1,113 per tonne. This has led to an increase in nitrogen fertilizer from nine to 36 per cent.

“Nigeria has only two Ammonia plants, which is not enough to serve the 70 million farming population in the country; this has led to blending plants in the country to solely rely on importation to meet the rising demand,” he said.

He said despite the soaring prices of fertilizer component globally, the rigors and the high cost of clearing containers at the sea ports has even made matters worse for blenders who in the long run transfer the cost to the farmers, and from farmers to the end consumers.

“In addition to this is the rising cost of transportation, as transporting a trailer load of fertilizer costs noting less than N650, 000 compared to the sum of N450, 000 last year. Logistic companies have attributed the new price to the rising cost of diesel.”

He revealed that while the Federal Government under the Presidential Fertilizer Initiative (PFI) had tried to ease the rigors of importation of raw materials for blenders such that raw materials were imported by the government and transported to the blending plants, it actually paid off, as farmers were able to get fertilizer as low as N5, 500.

Okonti however, said it is unfortunate that the programme was modified last year, such that blending companies would have to apply for credit facility, and some of the criteria is that they (blenders) would provide a lump sum of the loan been requested for coupled with a strong collateral.

However, findings showed that not many blenders are able to meet up with this requirement, making the subsidised N5, 500 fertilizer not so available for farmers. So, the farmers are left with little or no option than to buy from the open market with the price ranging from N12, 000 to N15, 000.

Okonti lamented that although Nigeria is blessed with all the raw materials needed for fertilizer, he said what is lacking is the processing plants.

He regretted the collapse of the Nigeria Fertilizer blending company (NAFCON Complex) in the 1980s, saying the Shell Alakiri gas field in Ogoni land had enough natural gas that can feed the blending plant for 120 years “and since the natural gas was abundant, extracting methane and Nitrogen to make Ammonia and when fixed with Carbon Dioxide, Urea is obtained. When Urea is fixed with imported Phosphoric Acid and Potassium Chloride, NPK is produced.”

Okonti said with this in place, Nigeria could have been the leading exporter of Ammonia globally, but unfortunately the reverse is the case now.

He stressed the need for government to set their priority right and demonstrate more political will towards improving food security in the country.

A source, who pleaded anonymity, said the current challenge was caused by government’s policy on the product. He added that the development was largely due to the Federal Government’s refusal to grant waivers to importers to bridge the demand and supply gap.

He added that government is laying claim to the fact that terrorist groups have been hijacking some of the materials used for fertilizer production, especially in the Northeast to manufacture explosives, hence the move.