Fertiliser Shortages: Thwart Agricultural Hopes

Ethiopia, a country rich in natural resources, has one of the most varied agro-ecological settings. The country’s diversity makes it suitable for growing hundreds of crops, with 74.3 million hectares of arable land spread over 18 major agroecological zones at altitudes ranging from 148 metres below sea level to 4,620 metres above sea level. The country is also home to a large number of livestock resources. Ethiopia’s agricultural sector plays a crucial role in the country’s economy, employing over 70Pct of the population and contributing to more than a third of the GDP. Despite promising results, it has yet to realise its full agricultural potential due to subsistence-oriented farming practices, limited technology adoption, sub-optimal agronomic practices, and a heavy reliance on rain-fed farming. Conflict and severe drought records have resulted in poor crop output, limited market access, income loss, and substantial postharvest losses. As if that were not bad enough, farmers now deal with acute fertiliser shortages, writes EBR’s Bamlak Fekadu. 

Agriculture is the most significant component and bedrock of Ethiopia’s economic development, contributing to over a third of the country’s GDP and 65.62Pct of employment. Agriculture is still an important economic activity, with more than 75Pct of Ethiopia’s 120 million people living in the countryside. Ethiopia’s agriculture primarily comprises subsistence farming, in which most smallholder farmers have less than two hectares of farmland.

Ethiopia’s agricultural sector has reported considerable growth over the past decade due to an estimated doubling in modern farm inputs, the rapid expansion of arable land, increased labour productivity, government investments in the extension system, and an improved road network.

Building on what has already been trending, Prime Minister Abiy Ahmed’s (PhD) regime has also significantly emphasised improving the agriculture sector. Among the top policy changes his administration made were improving small and large-scale irrigation development, financing agricultural inputs, supporting cluster farming, and reducing postharvest loss at all levels of the food cycle.

Although the government has made efforts to increase domestic production of essential crops, there are still significant hurdles due to continuous conflict in several parts of the country and other economic issues. However, the sharp rise in the price of fertiliser in the international market has made Ethiopia and other developing countries suffer. In addition to severe drought in many parts of the country, food aid-dependent citizens have sharply increased to more than 20 million.

A severe foreign currency shortage has led to a drastic drop in fertiliser shipments and distribution, exacerbating concerns over food security. The initial plan of distribution the government prepared faced considerable challenges due to the pervasive foreign currency shortage, prompting Ministry of Agriculture officials to take urgent measures.

According to the Agricultural Affairs Standing Committee of the House of Peoples Representatives, chaired by Solomon Lale, less than half a million tonnes of the 1.3 million tonnes of fertiliser the Ministry of Agriculture requested was delivered to farmers.

Under the leadership of Girma Amente, the Ministry planned to distribute 2.2 million quintals of fertiliser left from the previous year and import 12.8 million quintals for the harvest year with a projected budget of one billion dollars.

Commercial banks in Ethiopia were required to allocate 15Pct of their foreign currency reserves to priority items, such as agriculture inputs. Fertiliser, selected seeds, and pesticides fall into the second-tier priority list, and the Ministry opens letters of credit (LCs) to import them. However, the number of LCs opened this year has fallen by half.

With 24 ships set to bring fertiliser to Ethiopia via Djibouti Port, only 13 LCs opened, accounting for 6.9 million quintals, according to the Ministry of Agriculture. Following an instruction given by the National Bank of Ethiopia (NBE), which allotted one billion dollars for this year’s procurement, the Commercial Bank of Ethiopia (CBE) was responsible for opening the LCs. CBE has opened the letter of credit for importing fertiliser. However, the supplier delayed delivery of the much-anticipated fertiliser because the LC’s opening was initially late at CBE. The situation was a big blow for the Ministry, which had planned to avoid delays.

The bill for fertiliser imports has skyrocketed in recent years. The most abundantly used type, NPS (a compound fertiliser containing highly uniform granules of three essential plant nutrients of nitrogen, phosphate, and sulfur), has more than doubled in the last year to USD 1.2 billion compared to the previous year. The inflating cost of inputs, starting with natural gas, and the rising shipping costs globally are driving the prices higher.

Due to COVID, the war in Ukraine and subsequent diplomatic warfare between Russia and the European Union and its allies, and the trade war between China and the United States and its allies, there is a global supply chain disruption. This compounded problem has caused a massive price spike in many essential commodities, and the fertiliser shortage has become a global phenomenon. The situation has become hard to come by in low-income countries like Ethiopia.

Fertiliser demand, which fell during the COVID-19 lockdowns, rebounded in late 2020–2021 as the need for fertiliser surged following the lifting of traffic restrictions in many countries, and prices rose as high as 300Pct in response to the surge in demand.

The outbreak of the Russia-Ukraine war on February 24, 2022, exacerbated global disruptions in markets for important food crops and fertilisers, threatening food security worldwide. Although fertiliser prices have decreased since 2022, the war dramatically increased costs.

Russia and Belarus are significant producers of urea, phosphate, and potash. And the ongoing conflict, economic sanctions, and disruptions in Black Sea trade routes have hampered their fertiliser exports.

Usually, Ethiopia’s farming season lasts from the end of May to the end of September. Still, this year’s rainy season began more quickly, and due to a lack of fertiliser supply and a price spike, farmers were frustrated. Combined with ongoing instability, this has created uncertainty and anxiety among farmers who rely on their crops for their livelihoods.

Since the end of May, peasants in the State of Amhara have staged protests to demand access to and immediate delivery of fertiliser as the primary planting season draws near and farmers whose livelihoods depend on subsistence farming experience fears of missing the planting season.

Hundreds of protesting farmers took to the streets of Bahir Dar, the seat of government for the State of Amhara, chanting slogans written in bold on banners: “Give us fertiliser” and “Solve the fertiliser problem!” The same goes for Gondar peasants, who have been “waiting with hope” to receive fertiliser but have run out of patience. They have also expressed their fears that the shortage may force them to abandon farming preparations for the coming season in June-July.

The issue has been developing for over a year, despite the recent protests receiving media coverage. In March of last year, farmers in the East Gojjam Zone of the State of Amhara were the first to raise concerns with zonal authorities about fertiliser scarcity and its rising price before the planting season.

Although farmers have staged peaceful protests concerning low yields amid ideal rain conditions, the administration appears to pay less attention to the problem of providing more fertiliser while asserting a forex crunch.

Farmers utilising fertiliser are in shock due to the skyrocketing price of fertiliser, which jumped as high as 170Pct or ETB 6,700.00 per quintal, from agriculture unions and operatives, while the price in the parallel market went as high as ETB 10,000.00.

Last harvest season was abundant for Wondimu Tegene, 47. A father of six, he and his family depend on 2.5 hectares of land in North Gondar, Amhara.

He rented an extra hectare from his neighbours for ETB20,000 to expand his wheat and maise farming last year. Millions of farmers like Wundimu put Ethiopia on the global map of a dozen countries that produce more than 10 million tons of wheat.

Wondimu used two quintals of NPS fertiliser and urea on his farm plots last year. He was delighted with the outcome and harvested 32 quintals of wheat and 38 quintals of maize from each hectare, above the national average of around 30 quintals.

In May, he had to cut short his plans to boost productivity on his 2.5 hectares of land and rent out the extra hectare. When he went to the fertiliser distribution centre 25 km from his farmland, where he had bought the NPS and urea last year, he learned that there was no sufficient fertiliser. His attempt to find it with private vendors only ended up with a price offer nearly tripled from ETB 3,000, y the price he paid last year for a quintal of fertiliser.

“I wasn’t prepared for this,” Wondimu told EBR. A chair of the Farmers Union who wants to stay anonymous in the State of Amhara, with over 250,000 smallholders under its umbrella, in the east Gojjam Zone, has already received less than 70,000 quintals of NPS.

The significant shortfall in fertiliser supply could have a detrimental impact on crop yields and the livelihoods of smallholder farmers.

“The amount the union received is far below the required amount to meet the fertiliser needs of all smallholders in the region,” says the chair. “The shortage of NPS could have a negative impact on crop yields and ultimately affect the livelihoods of farmers in the area. Authorities are abusing members of the Union with falsified allegations by linking them to armed movements in the region, despite the urgency of the matter.”

The fertiliser shortage could be due to a combination of factors, including limited government subsidies and high import costs. The chair still has concerns that the low fertiliser supply could lead to food insecurity and increased poverty among farmers, calling on the government to urgently address this issue and ensure that farmers receive the necessary support to sustain their agricultural activities.

Wondimu was not alone. The improbable rise in fertiliser prices also shocked Ayachew Desalegn, 45. A farmer in Arba Minch, in the State of Southern Nation, Nationalities and Peoples, resides almost 800 km farther south of Wondimu.

“I bought two quintals of NPS- the fertiliser of my choice- last Mehir, [Ethiopia’s main harvesting] season, spending ETB 2,600 a quintal,” says Aychew. “It was worth it, as I harvested 38 quintals from my plot. With the price going up as high as ETB 10,000 now, I can only buy half the fertiliser I bought last year.”

Alemu Ashagerie is a smallholder farmer with less than one hectare of land in Lome, a district in the State of Oromia, located 87 kilometres from Addis Ababa in the East Shewa Zone of the Great Rift Valley.

Due to the shortage and spike in price, Alemu and his neighbours used a mix of composts with agricultural extensions, including composted animal manure, compost, sewage sludge, food processing wastes, and municipal biosolids.

“It’s impossible to harvest and expect yield without chemical fertilisers because the land has already adapted to chemical fertilisers,” Alemu said.

He also mentioned that they are exploring alternative methods, such as crop rotation and cover crops, to reduce their reliance on chemical fertilisers and improve soil health in the long run. Using compost has cut prices, enhanced soil health, and reduced pollution produced by artificial fertilisers.

However, according to Samuel Assefa, PHD, an agricultural expert with three decades of expertise, compost will not be as adequate as artificial fertilisers. “Using compost or adopting organic fertiliser is not a dependable solution,” he argues. “Because proposing organic fertilisers for commercial purposes requires a lot of time and space.”

“Ethiopia’s soil is currently content with a high acidity level,” he said, sharing his belief that combining compost and artificial fertilisers may be the most effective way for farmers to save money while improving soil health.

Over 18 million small-scale farmers use Input Voucher Sales (IVS) to buy fertilisers, improved seeds, and agrochemicals. The Agricultural Transformation Agency (ATA) assigns microfinance institutions to provide credit to farmers through vouchers. Around 40Pct of farmers are primarily smallholders whose farming relies on fertiliser and microfinance, and cooperatives remain the finance sources for the farmers to get fertiliser.

Farmers are urging the government to act quickly before the situation worsens and threatens their livelihoods. Following this, EBR attempted to reach the regional agriculture bureau heads but couldn’t get a response on the matter.

Last May, Ajebe Seneshaw, deputy head of the State of Amhra’s Agriculture Bureau, told the national broadcaster that the fertiliser shortage is a national problem. He promised to provide 150,000 quintals of fertiliser on loan from the Ethiopian Agricultural Works Corporation to areas that plant crops earlier than the rest. He also expressed hopes that fertiliser transportation would soon resume in Amhara. The State needs close to 350,000 quintals of fertiliser for the season. The State’s Bureau of Agriculture plans to distribute via farmers’ unions to distribute it directly.

Whether the bureau delivers on its promises, the ongoing strike by the farmers in the State could be a small picture of an increasing crisis Ethiopian farmers across the country are facing.

According to Ethiopian Agricultural Businesses Corporation (EABC), there is a continued shipment of inputs for the 2023/24 farming season. An additional 600,000 cubic meters of NPS Fertilizer also arrived at the port of Djibouti on June 11, 2023. As a result, the amount of imported fertilisers for the 2022/23 crop season has increased to more than six million tonnes. Later in June, the corporation expects four ships to deliver 2.3 million cubic meters of fertiliser at Djibouti port. Of this amount, half a million quintals are urea, and 1.8 million are NPS boron/NPSB.

EABC has been conducting fertiliser procurement through international tenders since its establishment as a federal government public enterprise in 2015 with an authorised capital of ETB2.4 billion to buy agricultural inputs and technologies from domestic and international markets and supply them at reasonable prices.

The first vessel carrying fertiliser arrived at the port on December 27, 2022, and the corporation distributed the imported fertiliser through farmers’ unions.

From 1.8 million metric tonnes the previous year and 440,000 metric tonnes in 2008, the total amount of imported fertiliser has increased and now exceeds six million metric tonnes.

Contrary to May’s parliament report, Agriculture Minister Girma Amente, while briefing local state-owned media in March, said that the federal government has subsidised ETB 21 billion to procure fertiliser in preparation for the current crop season.

According to the Minister, Ethiopia has purchased 12.8 million quintals of fertiliser for the year, and there are still two million quintals left from last year, which brings the total to about 15 million quintals.

Minister Girma hopes farmers will benefit from this fertiliser subsidy. He disclosed that the government plans to supply this fertiliser stock nationwide for both rainy seasons.

Solomon’s Standing Committee demanded an explanation after learning that farmers planted seeds without fertiliser due to a shortage of inputs. However, disregarding the complaint and blaming a lack of precise figures and locations for supporting the claim, Sofia Kassa, state minister for agriculture, disclosed that the Ministry representatives recently spoke with bank executives about prioritising fertiliser inputs.

According to the Food and Agriculture Organization (FAO), Ethiopia’s growth rate of expenditure on food and agriculture from 2004–2018 exhibited a 26Pct nominal annual growth rate, followed by Malawi’s 22Pct, Kenya’s 18Pct, and Uganda’s 17Pct.

Although South Africa, Algeria, Nigeria, Morocco, Egypt, and Tunisia account for most of Africa’s fertiliser production, there is a plentiful raw material supply of potash in Dallol in the State of Afar in Ethiopia. This natural raw material is the primary input used to make fertiliser. With adequate investment to develop the resource potential in Afar, Ethiopia can play a significant role in the global fertiliser industry.

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11th Year • July 2023 • No. 119 EBR