Factors Affecting the Distribution and Use of Fertilizer in Kenya: Preliminary Assessment

Abstract

About 80% of Kenya’s population lives in rural areas, and most of these households are dependent on agriculture for a large part of their livelihood. Increased productivity of the millions of people engaged in agriculture is clearly required for living standards to rise. But since Kenya’s arable land mass is largely fixed and already under cultivation, expansion of cropped area is not a realistic option to increase the livelihoods of Kenya’s rural opulation, growing at 3.34% per year. There are two basic avenues for labor productivity in agriculture to rise: intensification of agriculture, i.e., increasing crop yields per unit of labor through the use of improved farm technologies, and greater diversification into higher-valued crops. Both of these strategies are likely to require increased use of fertilizers and other productivity-enhancing inputs. Yet despite the crucial role of increased fertilizer use in raising agricultural productivity and rural incomes, fertilizer use in Kenya for the past decade has been stagnant, hovering around 285,000 metric tonnes annually. Predictions that the liberalisation of the domestic fertilizer market would dramatically stimulate the use of fertilizers have not materialised. But data on aggregate trends in fertilizer use, while useful in clarifying the problem, are not particularly useful in identifying the micro-level constraints on fertilizer distribution faced by stockists and its profitable use by smallholders. There is currently a lack of information on the characteristics of households that use fertilizer and those that do not. This information may be useful in identifying the constraints that need to be addressed in order to realise the predicted benefits of market liberalisation on fertilizer use and agricultural productivity in Kenya. The report identifies the major factors constraining the profitability and access of fertilizer use by smallholder households in Kenya. The report first describes the fertilizer distribution system after market liberalisation and fertilizer use patterns among mallholders. After identifying the major constraints on fertilizer use from the standpoint of distributors and farmers, the report then discusses potential policy options for improving fertilizer profitability and accessibility in support of agricultural intensification and iversification. Findings and policy implications are based on two sources. The first source is a survey of 1,540 rural farm households conducted in May/June 1997 covering 24 districts. The second data source is a structured survey conducted in September 1997 of 59 firms involved in fertilizer retailing in 17 districts representing markets where the earlier sampled farmers purchased fertilizers. The paper is organised into several sections. Section 2 presents the methodology of the study. This is followed by a description of the fertilizer distribution system and a description of household- and region-level fertiliser use patterns. Finally, policy implications on fertiliser use are presented.