How Fertilizer Subsidies Combat Food Scarcity in Uganda
For farmers worldwide, fertilizer is a key method to replenish soil nutrients and boost crop yields. But over the past two years, Uganda, like the rest of the world, has experienced unprecedented widespread fertilizer shortages along with skyrocketing prices, reduced inventories and tripled freight and logistical costs. Because of these constraints, farmers have reduced fertilizer usage across the country. Fertilizer shortages, high prices and reduced use put immediate economic pressure on farmers and create long-term potential for lower crop yields and depleted soil.
To alleviate these pressures, the USAID-funded Feed the Future Uganda Institutional and Systems Strengthening (ISS) Activity facilitated a dialog workshop for stakeholders that resulted in the launching of a fertilizer subsidy program to relieve 80,000 smallholder farmers in Uganda.
Participants during the National Fertilizer Dialog in June 2022. Photo Credit: Feed the Future Uganda ISS Activity.
Hosting Dialog to Understand the Root of the Fertilizer Problem
To gain a complete understanding of the fertilizer problem, ISS began by hosting a national fertilizer dialog workshop with the National Fertilizer Platform of Uganda and the African Fertilizer and Agribusiness Partnership in June 2022. The objectives of the dialog were to 1) discuss the impact of high fertilizer prices on Uganda’s food security and economic development, 2) analyze fertilizer inventories and discuss the implications of shortages, and 3) explore sources of organic fertilizers in the event of continued high prices for artificial fertilizers.
Attended by representatives of the public and private sectors, development partners, regulators and banking officials, the dialog focused on identifying policy and regulatory options to reduce fertilizer prices in the short, medium, and long terms. Participants also made specific recommendations to improve fertilizer availability and affordability.
Creating Fertilizer Subsidies for Ugandan Farmers
As a result of the dialog hosted by ISS, two international fertilizer trade companies (Export Trading Group and Yara) combined efforts with Rabbo Bank, the Bill and Melinda Gates Foundation and other development partners to create and launch a fertilizer subsidy that reduced fertilizer costs to Ugandan farmers by 25 percent. This subsidy covered 20,000 metric tonnes of fertilizer. It offered quick relief to 80,000 smallholder farmers in Uganda, enabling them to increase production and productivity in the short run, counteracting the nation’s food insecurity.
Studies, Advocacy, and Education on Fertilizers
In addition to the fertilizer subsidy, two other concrete recommendations came from the fertilizer dialog. One recommendation was for a detailed, structured and long-term study about the status of fertilizers in Uganda. ISS is now soliciting proposals for research firms to conduct this study. The study will assess both inorganic and organic fertilizers and review the impact of fertilizers on Uganda’s food security and economic development.
Another recommendation from the dialog was to promote the use of organic fertilizers in Uganda through advocacy and education. This includes advocacy on which organic inputs are appropriate to Uganda’s food systems. To that end, ISS supported the National Organic Movement of Uganda in hosting a national dialog on organic fertilizer in December 2022 to explore alternatives to synthetic fertilizers. Among the issues suggested to address was the need for a law to operationalize the organic fertilizer policy.
Building the Basis for Market Resiliency
Fertilizer shortages are still an issue in Uganda and worldwide, but with the proactive work of the USAID-funded Feed the Future Uganda ISS Activity, fertilizer subsidies, and longer-term fertilizer studies will enable Uganda’s agricultural sector to create greater market resiliency for managing similar shocks in the future.
About the project: The Feed the Future Uganda ISS Activity is a five-year initiative funded by the United States Agency for International Development (USAID) with the aim of increasing responsiveness and accountability of Government of Uganda Ministries, Departments, and Agencies (MDAs) and Industry Apex Organizations (IAOs) to their members, constituents, and the public, as well as to create a more conducive environment for the agriculture-sector to drive inclusive development for Uganda’s future.