Transformation Policies

7. Transformation policies

Change the way we work in agriculture

  • Fix fertilizer
  • Fix marketing institutions
  • Fix financial value chains
  • Fix agricultural investment framework

 

 

 

 

 

 

8. Our fertilizer strategy

Stimulate a thriving private sector fertilizer industry, with government getting out of fertilizer procurement and distribution, supporting farmers through Growth Enhancement Support Systems

Structure of Government distribution system versus private sector voucher distribution system

 

Government Distributed

 

 

Fig 35: Government distributed fertilizer support program

 

Private Sector Distributed

 

 

Fig 36: Private sector distributed fertilizer support system, utilizing input vouchers

 

  • Government distribution system is inefficient and wastes government resources
  • Government distribution channels subsidize corruption
  • This is a major issue and government must get out of fertilizer distribution
  • All import and distribution should be done by the private sector.

 

Overview of the fertilizer voucher program

A proven efficient, effective and sustainable way to deliver government subsidies.

Taraba State’s Experience:

Government Distribution vs. Private Sector Voucher Program

Fig 37: Reach of respective programs to intended beneficiaries

 

Fig 38: Government Cost to deliver

 

Fig 39: Agro-dealer development

 

Key benefits of voucher system

  • Private Sector Voucher program reaches 8 times more farmers

a. Voucher program reaches 94% of farmers, while existing government system reaches an estimated 11% of farmers.

  • Private Sector Voucher program cost less than 50% to administer

a. Due to cost sharing with private sector, program costs less than 50% to run.

b. In addition, in the voucher system, farmers receive fertilizer 10% cheaper due to more efficient private sector distribution systems.

  • Private Sector Voucher programs develops Agro-dealer networks

a. As opposed to the Government Distribution system that crowds out the private sector, the voucher program encourages the development of a strong private sector

 

Roles of targeted Growth Enhancement Support (GES) to migrate farmers from subsistence farming to commercialized systems

 

 

Growth Enhancement Support Investment will be targeted at Twenty Million farmers in 2020. Investment will generate 5x to 10x returns in increased production.

 

 

  • Phased approach with support to farmers reducing over 4 years
  • Estimated cost per farmer per year is 5,000 Naira (US$30)
  • Expected benefit of program is up to 80,000 Naira per farmer (US$500)
  • Total cost of program is approximately 400 Billion Naira (US$2.5 Billion)
  • Total benefit of program is 6,800 Billion Naira (US$40 Billion) a 16 fold benefit versus cost
  • GES will leverage Mobile technology to achieve scale e.g MPESA

 

 

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