Fertilize crisis looms on Sh5.7bn subsidy row – Business Daily

Commodities

Fertilize crisis looms on Sh5.7bn subsidy row


fertilize

A worker pulls a cart loaded with fertilizer in Eldoret in March 2020. PHOTO | JARED NYATAYA | NMG

edwinmutai_img

Summary

  • The legislators have threatened to paralyze the passage of the Sh138 billion mini-budget if the fertilizer subsidy is not reinstated by Tuesday.
  • The National Assembly’s Agriculture Committee said the Treasury had removed the entire amount that was meant to cushion farmers from the skyrocketing prices of fertilizer.
  • The committee said despite reallocating the budgetary requests for the Ministry of Agriculture to secure the Sh5.734 billion subsidy, the Treasury had gone ahead and transferred the money to the security docket.

MPs want President Uhuru Kenyatta to order the reinstatement of a Sh5.7 billion fertilizer subsidy that the Treasury has removed from the supplementary budget.

The legislators have threatened to paralyze the passage of the Sh138 billion mini-budget if the fertilizer subsidy is not reinstated by Tuesday.

The National Assembly’s Agriculture Committee said the Treasury had removed the entire amount that was meant to cushion farmers from the skyrocketing prices of fertilizer.

The committee said despite reallocating the budgetary requests for the Ministry of Agriculture to secure the Sh5.734 billion subsidy, the Treasury had gone ahead and transferred the money to the security docket.

“The committee had allocated Sh5.7 billion for fertilizer subsidy. But we are shocked that there is no single shilling allocated in the Supplementary Budget I,” Silas Tiren, who chairs the committee, said.

“We will paralyze the supplementary budget on Tuesday if nothing happens to reinstate the entire amount between now and then.”

Fertilizer prices have hit an all-time high on fears that Russia’s invasion of Ukraine will curtail global supplies.

Russia was the world’s largest exporter of nitrogen products or planting fertliser in 2021.

The risk of disruption to shipments comes as fertilizer costs have already been soaring because of the high prices of natural gas in Europe, which forced some plants to halt or curtail production.

In Kenya, the cost of fertilizer has increased to Sh7,000 from a low of Sh4,000 last year, a blow to farmers who are preparing for the planting season that kicks off this month.

Lawrence Omuhaka, Agriculture chief administrative secretary, told MPs the ministry was banking on the approval of the Sh5.7 billion in the supplementary budget to help cushion vulnerable farmers ahead of the long-rain planting season.

The Sh5.7 billion is estimated to offer subsidies on 114,000 metric tons of various types of fertilizers for 910,000 vulnerable farmers.

“We are learning of the new development now. I will immediately contact my Cabinet Secretary [Peter Munya] who will, in turn, bring the matter to the attention of the Cabinet and by extension the President, “he said.

Mr Omuhaka said to maintain the price of ferilisers for farmers, a Sh31.85 billion subsidy will be required.

He said the amount is enough to procure 574,766 metric tons of assorted fertilizers.

A 90kg bag of Diammonium Phosphate, which retailed at Sh3,000 late last year, is now selling at between Sh6,500-Sh7,000.

[email protected]

.

Leave a Comment