Kenya plans to encourage local production and blending of fertilisers to help cut import costs and reduce subsidies needed to make the commodity affordable for poor farmers, the Agriculture Minister, Willy Bett, said on Thursday.
The minister made the disclosure on the sidelines of the World Economic Forum on Africa in Kigali that the government spent more than 16 billion shillings (159 million Dollars) to subsidise fertiliser in the last three years.
He added that “the next step now is to manufacture fertiliser; production could start in 2020 once the country starts producing hydrocarbons.”
Farming accounts for a quarter of Kenya’s annual economic output, but the high cost of fertilisers means farmers rely on subsidies or avoid using them, which hurts output.
Kenya is seeking to develop oil reserves found in recent years, and the minister also pointed to some gas finds. Ammonia for fertilisers can be produced from hydrocarbon feed stocks, such as natural gas and oil.
Toyota Tsusho is already putting up a fertiliser blending plant in the western town of Eldoret, Bett added.
High input costs have turned some farmers away from export crops such as coffee.
Bett said the government was encouraging farmers to create unions and cooperatives that could group together to buy fertilisers in bulk, reducing costs for individuals.
“Subsidy is not a sustainable programme,” he said.
Kenya has also been reviewing levies and taxes charged on other key crops, such as tea.
One plan is to drop the levy on Kenyan tea sold at a weekly auction in Mombasa.
