Posted on :Wednesday , 22nd March 2017
The newly built fertiliser plant in Eldoret has started sales after the government bought five tonnes to be offered to farmers under the taxpayer-funded subsidy plan.
Japanese conglomerate Toyota Tsusho owns the Eldoret blending plant and hopes to upgraded it in the second phase of construction at a cost of Sh123 billion.
Agriculture Cabinet Secretary Willy Bett said the five tonnes will be used in pilot farms to establish suitability for local soil and crop requirements.
"We are starting with five tonnes to see how farmers will respond, but we intend to buy huge volumes in future, basing on the response from farmers," said Mr Bett.
The plant is blending imported fertiliser to suit local soil and crops requirements, denying its operators cost savings that would substantially lower costs.
This has dimmed the hopes of farmers who were betting on the plant to cut fertiliser prices and lower production costs.
Farming accounts for a quarter of Kenya's annual economic output, but the high cost of fertilisers means farmers rely on subsidies or avoid using the input, which hurts production.
Toyota Tsusho's brand is labelled Baraka and is retailing at Sh3,000 per 50 kilogramme bag, while the same quantity of government subsidised manure is being sold for Sh1,800 at the National Cereals and Produce Board (NCPB).
Kenya has been encouraging local production and blending of fertilisers to help cut import costs and reduce subsidies needed to make fertilisers affordable for poor farmers.
The government spends up to Sh3 billion annually to provide farmers with low cost imported fertiliser.
Kenya will benefit from cheaper fertiliser once the Eldoret plant is upgraded to a manufacturing factory.
"The next step now is to manufacture fertiliser," Mr Bett said earlier, adding that production of fertilisers could start in 2020 once the country starts production of hydrocarbons.
Kenya is seeking to develop oil reserves found in recent years, and the minister also pointed to some gas finds.
Ammonia for fertilisers can be produced from hydrocarbon feedstocks, such as natural gas and oil.
Kenya has for long had plans to put up a fertiliser plant to cut prices, which inflate food prices.
In 1975, the government had picked KenRen, an American firm, to manufacture fertiliser for domestic and export markets.
The deal cost taxpayers tens of millions of shillings but never materialised.