Assessment of the impact of the Kenya Government fertilizer subsidy on the performance of domestic private sector fertilizer trade

Introduction Fertilizer subsidy was reinstated by the Kenyan government in 2022 to cushion farmers against increasing fertilizer prices on the domestic market caused by shocks to the global fertilizer supply chain. This study assessed the efficiency and effectiveness of the distribution process; the impact of the fertilizer subsidy on the domestic private sector trade; and proposed optional delivery mechanisms for better outcomes to actors in fertilizer supply chain. Methodology The study used mixed method approaches; secondary data, qualitative survey of key stakeholders and quantitative survey of beneficiaries. Results Findings show that the private sector and the government incurred about the same cost of delivering the fertilizer to last-mile agro-dealer. The absorption of the subsidised fertilizer increased over time especially when the fertiliser price reduced to Ksh 2,500 per 50kg bag. However, farmers faced challenges in accessing the fertiliser such as long distances and increased transport costs to the nearest NCPB depots, late delivery of subsidised fertilizer; mismatch between fertilizer types demanded by farmers. Distribution of the subsidised fertilizer was skewed towards the high potential maize growing region of the country. Certain farmers received subsidized fertilizer from both the NFSP and the county, while other farmers received did not receive since the NFSP and the county farmer database were not combined resulting to uneven distribution of fertiliser. Conclusions While all stakeholders viewed the decision to subsidise fertilizer favourably, the model used was suboptimal. The discounted fertiliser is not easily accessible because to high transportation costs, long queues at collection depots, and a delayed process during fertiliser pickup. To enhance access, the government should incorporate the private sector in distributing subsidised fertilizer. The NCPB storage facilities should be centrally positioned to facilitate farmers' quick access to subsidised fertiliser. Timely fertilizer delivery, proper fertilizer distribution, and subsidy predictability are essential for achieving the goal of increased productivity.