Evaluation and recommendations for improving fertilizer marketing in Kenya

First external evaluation covers the period 9/84-7/85 and is based on document review, site visits, and interviews with distributors, consultants, Government of Kenya (GOK) planners, and farmers. One program objective, to obtain private sector involvement in fertilizer distribution, has already been fully achieved. During March and April 1985, 20,800 tons of diammonimum phosphate (DAP) were imported and distributed through 16 private firms to the major maize and wheat producing areas. Outside of this, however, little progress has been made in improving fertilizer management and distribution. Three GOK committees - formed to allocate USAID fertilizers to distributors and to make other decisions on fertilizer matters - have marginally met covenants of the program (although without private sector participation), but committee members do not have sufficient understanding of the role of fertilizers to make timely marketing decisions; the import plan for 1985 was not complete, quantities were not indicated by time frame; tabulations were incorrect; and documentation was late and/or inadequate. Educational programs to improve fertilizer marketing and use are virtually nonexistent, and distribution and pricing systems still favor large over small farmers. For example, the GOK receives a margin of about 12% on the sale of USAID DAP to wholesale distributors, distributors receive about 8%, but the stockists who directly serve small farmers receive only 1%. Also, many farmers cannot afford the 50 kg bag of DAP currently available. To correct these problems, a pricing study is being conducted and USAID has proposed introducing 10 kg bags. In sum, an integrated fertilizer marketing system does not at present exist in Kenya: the GOK chooses products, quantities, and price, while distributors decide only which customers will be supplied and margins to be served. A long-term master plan is needed to develop a marketing system which is centrally managed by an autonomous organization which has profit and loss responsibility, is self-sustaining, and makes all marketing decisions, e.g., as to product type, product quality, prices, promotional activities, and distribution.