Bulk fertilizer imports aimed at making inputs affordable to cereal farmers are set to arrive in the country today ahead of the weeding season in the grain basket region of North Rift.

The cargo is the first in a series of bulk imports that the Kenya Tea Development Agency (KTDA) is expected to ship in to boost the production of key crops, which were battered in January's post-election violence.

The arrival of the consignment is the culmination of Agriculture minister William Ruto's promise to farmers that affordable fertiliser would soon be available in the market.

Price fall

The minister spoke at the height of a fertiliser pricing crisis that had seen the cost of a bag of Calcium Ammonium Nitrate (CAN) rise to more than Sh2,000 this year from Sh900 last year. Mr Ruto said the price would fall to Sh1,650 to enable those who planted without fertiliser to top-dress their crops.

The minister then gave the Kenya Tea Board Sh850 million to buy the fertilizers.

"NCPB will play a pro-active role in sourcing fertilizer at competitive international prices to help stabilise domestic prices," Mr Ruto said. "We are empowering the board to sell CAN at affordable prices to enable farmers improve the quality of their yield."

Yesterday, Agriculture permanent secretary Romano Kiome urged growers to buy inputs from the National Cereals and Produce Board (NCPB) for better pricing.

He spoke at an open forum for stakeholders in the sector held in Nairobi. The meeting was to review how far the stakeholders have gone in implementing the recommendations of tea sector report of 2005.

KTDA, the agency that is charged with the duty of shipping in fertilisers needs Sh3.3 billion to satisfy the needs of growers affiliated to it. The managing director, Mr Lerionka Tiampati, said a sharp rallying of global fertiliser prices had thrown the annual fertiliser import scheme into disarray.

Dr Kiome said the Government's intention is not to subsidize fertilisers, but to stabilise prices in the market by offering farmers affordable alternatives.

He reversed earlier plans by KTDA to stop importing fertilizers on behalf of nearly half a million farmers this year, citing a steep rise in global prices.

The PS said the agency would instead seek alternatives to fertilizers or explore ways of local blending.

It is estimated that importing fertilizers without the sulphur component could enable KTDA save up to Sh1.2 billion in costs.

"The consignment is expected at the Mombasa port on June 28. It includes Di Ammonium phosphate, Calcium Ammonium Nitrate and NPK, and will be available to maize, wheat and tea farmers," Dr Kiome said.

Experts said failure to apply correct amounts of the NPK fertilizer could compromise the quality of locally produced tea that commands 10 per cent of the global tea market.

In recent months, small scale farmers have been up in arms against changes made to the advance payments ahead of the main bonus in October each year. In 2007, farmers received Sh21 per kilogramme of green leaf they delivered, down from Sh24 per bag the previous year.

Yesterday, the tea agency cited continued strengthening of the shilling against the US dollar as well as increased cost of production as the main factors eroding profitability in the tea sub-sector.

The agency also proposed that the four billion shillings debt that the 57 tea factories owe lenders be written off and joint ventures be established to help drive implementation of the eight planned hydro power generation projects in the country.

Imminent collapse

Participants said the tea sector faced imminent collapse unless solutions are found to the high cost of production-particularly labour, electricity and fuel.

Last year, the sector generated Sh43 billion in foreign earnings, down from Sh47 billion previously. Analysts said significant decline in prices would only come through tax rebates on manufacturing fertilizers locally.

Kenya has in the past been advised to use by-products from the oil refinery in Mombasa and shipments from other locations to manufacture fertilizers.

Finance minister Amos Kimunya set aside two billion shillings for importation of fertilizers in this year's budget. The Government is also considering setting up a Sh4 billion revolving fund to help farmers buy agricultural inputs.

Last year, KTDA shipped in 62,500 tonnes of fertiliser worth Sh1.2 billion on behalf of its members and is expected to bring in 63,500 tonnes this year.

Some 514 102 small scale farmers own 95,000 hectares of tea in the country.

In the past one year, the price of Di Ammonium Phosphate fertilizers have increased three fold from $256 per tonne (about Sh16,216) to $800 (about Sh50,480).

Ministry statistics show that the prices of fertilizer have since the turn of the year shot up to Sh3,400 per 50kg bag compared to Sh1,296 last year, a growth of 160 per cent. The rise is attributed to an increase in global oil prices and freight charges.

The price of standard crude oil, the major component in fertilizer making, has risen from Sh4,020 per barrel in 2005 to over Sh9,730 per barrel today. This represents a 40 per cent rise from January, and have tripled in the past three years. Freight charges have also gone up from an average of Sh3,300 three years ago to an average of Sh5,700 today.

Kenya imports between 450,000 tonnes and 500,000 tonnes of fertilizer every year. Cereals production consumes the bulk with 150,000 tonnes closely followed by horticulture that takes up 65,000 tonnes.

Coffee and tea take up 40,000 tonnes and 30,000 tonnes respectively while the remainder is taken up by other small crops.