|
Getting your Trinity Audio player ready…
|
Writes Dr. Mathew M. Abang
Agriculture is the backbone of most economies in Southern Africa. However, overall the sector is not performing well due to low agricultural productivity which is partly attributed to the under-use of oftentimes poor quality fertilizers. The poor performance of the agriculture sector is posing a serious constraint to economic growth, food security, and poverty alleviation in the region. One of the key challenges of fertilizer use in Southern Africa is that countries are at different stages of development and therefore their fertilizer policy and regulatory frameworks are at different stages of maturity. These disharmonious policies, standards, laws and procedures have served as an impediment to regional trade in fertilizers. However, the establishment of a regional market is necessary for the development of more viable and sustainable fertilizer markets in the region.
The development of a regional market requires the establishment of a regional regulatory framework that promotes fertilizer trade within the region. It is to this end that, in partnership with SADC and AFAP (African Fertilizer and Agribusiness Partnership), FAO facilitated a highly consultative process at national and sub-regional levels that culminated in the development of the SADC harmonized fertilizer regulatory framework (HFRF) that will lead to improved access by farmers to reasonably priced fertilizer of good quality.
To support the implementation of the HFRF, the Southern Africa Fertilizer Program (SAFP) has been developed and was recently approved by the SADC Council of Ministers but awaits funding in order to become operational. The program was developed through a joint effort by AFAP, FAO, and SADC (commissioned by FAO under the joint SADC/FAO project “Support Towards the Development of a SADC Harmonized Fertilizer Regulatory Framework” and developed by AFAP). The SAFP spells out the strategy and implementation plan to be used to address the gaps and challenges identified and recommendations made by two regional synthesis reports (one focused on the status of the fertilizer sector while the second looked at fertilizer regulatory frameworks). The program aims to sustainably increase the regional supply, distribution, and use of appropriate, affordable fertilizers of high quality in the SADC region. Its overall goal is to contribute to improved sustainable agricultural productivity and inclusive economic growth in the region.
The strategy is to apply a multi-pronged approach targeting all levels of the fertilizer supply chain to enhance the ability of strategic actors from the public and private sectors to improve the business and regulatory environment and transition to a private-sector-led regional fertilizer market that responds to effective demand for fertilizer of good quality in Southern Africa. The strategy is to be applied in the regional context of challenges and opportunities using strategic partnerships that will need to be developed to implement the requisite activities for attaining regional impact during the life of the project and achieving the expected results.
Although the program will be implemented at the regional level the successful accomplishment of the activities will hinge on country-level cooperation. It is expected that countries will review the regional program and, beyond the collectively identified priorities, will be able to identify their priorities and design national programs that take into account their peculiarities and coordinate their implementation with the relevant regional-level activity.
The SAFP is particularly timely given the current global context of disrupted fertilizer supply chains which has resulted in high fertilizer prices. COVID-19 disruptions and the subsequent Russia-Ukraine conflict have resulted in a limited supply of fertilizer. As a result, availability of fertilizers from global markets to smallholder farmers in Sub-Saharan Africa is even more constrained than usual, and where is it available the price is completely unaffordable hence putting fertilizer completely out of their reach. The global situation is likely to continue for the foreseeable future and therefore action needs to be taken to ensure that African smallholder farmers have access to this critically important productivity-enhancing input. Key actions that need to be taken in this regard are investments to substantively increase fertilizer production in Africa and interventions to dramatically improve fertilizer use efficiency. The SAFP has components that cover these two areas of intervention.
The first component will support fertilizer policy and regulatory improvement as well as harmonization and domestication. SADC has decided to use the powerful legal instrument of regional regulations to enact harmonized trade rules and quality control procedures in order to increase farmer choice, bring prices down, improve buyer confidence, and otherwise make the fertilizer trade easier, faster, and cheaper. The regional regulations for fertilizer should provide a detailed set of procedures for the functioning of domestic and regional fertilizer markets. They should set out regional rules and quality standards based on international best practices that will minimize border delays through mutually acceptable measures and harmonized quality control standards. The 2019 FAO Code of Conduct on sustainable use of fertilizers offers a good benchmark in this regard.
The regional regulations for fertilizer should provide a set of procedures for the functioning of domestic and regional fertilizer markets based on fertilizer registration and harmonized quality control standards. They should facilitate trade and improve fertilizer quality by providing a framework within which countries will speak the same language in terms of mandatory labelling standards and maximum allowable limits on nutrient deficiencies, and licensing of fertilizer professionals. Countries with such harmonized regulations can freely trade fertilizer between one another with imported fertilizer being subject to the same quality control procedures and level of inspections as it was in the country of origin thereby improving consumer confidence and minimizing border delays.
This alone will be an important achievement once operational since currently there is a wide variety which creates blockage, ranging from slow and expensive testing requirements which are currently a major constraint to the introduction and marketing of new fertilizer products in countries such as Malawi and Mozambique, to Zambia where locally produced blends are exposed to more stringent rules than imports.
However, unlike other regional economic communities like EAC and ECOWAS, these SADC regional regulations do not automatically supersede national legislation. The regional regulations need to be domesticated into national law and they will also need to be supported by the development of new institutional structures and improved capacities that the new regulations demand. Furthermore, while these systems are highly effective as quality control instruments, they are technically demanding and require specialist skills, advanced laboratory equipment, and other resources to implement which are generally lacking in most of Southern Africa. There is a need to match regulatory ambitions with current regulatory resources and regulatory capacities.
Ultimately the objective of this component is to establish or improve national fertilizer policy and regulatory systems and institutions that are aligned with the HFRF for SADC and the 2019 FAO International Code of Conduct for the sustainable use and management of fertilizers. Regional Technical Working Groups will be established for the formulation of regional-level policy and programme initiatives in support of regulatory harmonization. Although all these activities will be coordinated and accomplished at the regional level, effective implementation will mostly take place at the country level.
The second component will seek to ensure a strong competitive, inclusive, private-sector-led regional fertilizer market. The objective is to contribute to the development of a sustainable fertilizer market that provides appropriate and high-quality fertilizer at affordable prices to farmers in the SADC region. Fertilizer markets in SADC are varied with larger markets, smaller markets and a number of variations in between.
There is a need to make the larger, stronger markets more inclusive and relevant to the needs of their farmers and the region, strengthen and grow the weaker markets, and then link them regionally. Furthermore, although there are fertilizer production and blending facilities in the region, with the exception of the ones in South Africa, they are operating below capacity due to their inability to produce competitively with fertilizers on the global market and in many countries, fertilizer products are taxed. The issue should be to produce fertilizer products that are appropriate for the crop and soil nutrient needs of the farmers in the region.
Boosting the supply and distribution of quality fertilizers in the region will entail conducting fertilizer quality assessments/studies in selected SADC Member States to collect relevant data on fertilizer products, markets, dealers, and other agronomic and economic variables. Analyses of both nutrient deficiencies and monetary shortfalls will help prepare relevant policy briefs for dialogue among stakeholders in the fertilizer value chain including the private sector. These will guide efforts by the private sector to have greater impetus to invest in improvements in the quality of fertilizer products that are being supplied and distributed for use in the region, particularly fertilizer blends that are being produced in the region.
With regards to strengthening the markets, there is a need to strengthen agro-dealers networks in rural areas across all SADC member states. Where they do not exist or their numbers are too thin, existing traders with the potential to become agro-dealers need to be identified.
Overall, agro-dealers need to be capacitated through training to improve their business acumen and enhance their technical knowledge of fertilizer (i.e. storage, transport, usage, etc.) and how to apply good agricultural practices. Access to finance is also a challenge faced by market actors particularly lower down the supply chain; there is a need for initiatives that will improve access to finance to purchase and distribute fertilizers. In general fertilizer supply chains in SADC are high-cost supply chains, and there is a need to explore opportunities to create more efficient supply chains through actions such as containing the FOB price through smart sourcing; containing insurance & freight through efficient port handling; introducing risk-sharing mechanisms to reduce fertilizer financing costs; and reducing wholesale and retail margins through more efficient purchasing and distribution systems.
A key action that can strengthen fertilizer markets in the region is the establishment of a bona fide regional fertilizer association and regional public-private dialogue fora. There is already a regional fertilizer association, the Fertilizer Association of Southern Africa (FERTASA). However, a substantial effort is required through membership restructuring for FERTASA to become a bona fide regional fertilizer association for Southern Africa with representatives in each country (which could be existing national fertilizer associations or other relevant private sector organizations in the countries).
FERTASA is the ideal regional association to strengthen since it has the mandate to represent and advocate on behalf of the largest fertilizer manufacturing companies in South Africa and indeed in Southern Africa as a whole. A series of activities will need to be implemented that will lead to FERTASA’s sustainability and to the delivery of critical services to its members (better access to finance and market information, optimized logistics cost, improved knowledge on fertilizer products, procedures and regulations).
The third component will focus on the development and dissemination of comprehensive input packages in cooperation with SADC–CCARDESA. Ideally, national soil maps that identify nutrient deficiencies and other soil properties should guide fertilizer standards and recommendations. This is not usually the case, especially in smallholder farming systems of southern Africa. The objective of this component is to facilitate the development and dissemination of fertilizer recommendations and accompanying/related blends that are suitable for specific crops and agroecological zones to sustainably improve agricultural productivity in Southern Africa.
All the activities under this component will be implemented in close collaboration with SADC, national soil fertility research institutions, and the private sector. The key expected result is comprehensive fertilizer packages comprised of updated fertilizer recommendations for targeted crops and agroecological zones across Southern Africa and appropriate, high-quality fertilizer products developed and disseminated to farmers in Southern Africa. Given the long-term nature of developing soil maps and updating fertilizer recommendations, some of the activities under this component will be implemented in the short to medium term while some will be implemented in the long term.
Regarding sustainability, it is expected that there will be donor funding for this 5-year program but that key elements of the work will continue well beyond the 5-year period through public-private partnerships. The donor funding will be used to lay the groundwork for this future sustainability by working with both public and private sector partners to address the specific identified gaps that are constraining the development of a conducive business operating environment for the southern African fertilizer industry.
Most importantly, the Program envisages long-term sustainability for this investment and is underpinned by four pillars, namely: enhanced fertilizer system efficiencies; growing public-private sector engagement; improved capacities of the public sector to govern and operate in the evolving fertilizer markets; and expanding use of fertilizer blends by smallholder farmers. In five years the program will establish more sustainable fertilizer systems in the target countries capable of (1) ensuring that farmers have affordable, timely, and reliable access to balanced fertilizers; (2) the private sector has regular input into policy processes; (3) well-informed and skilled public-sector officials operating in the fertilizer space; and (4) improve the trade of quality fertilizers in Southern Africa. The project will leverage investments by private sector firms and development organizations engaged in value chains across Southern Africa.
Mathew M. Abang (Ph.D., MBA) is the Plant Production and Protection Officer, Sub-regional Office for Southern Africa – Food and Agriculture Organization of the United Nations (FAO)
The views expressed in this information product are those of the author(s) and do not necessarily reflect the views of the Food and Agriculture Organization of the United Nations (FAO).