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Bottlenecks, high tariffs impede fertiliser supply in Tanzania

Saturday April 09 2016

The fertiliser supply chain in Tanzania is clogged by both tariff and non-tariff barriers.

The barriers impede timely delivery of the input at affordable prices to farmers.

Importers said, for instance, that registration of a new fertiliser in the local market costs $30,000, compared with $5,000 in Kenya. In addition, the registration process is also protracted, as authorities demands field trials of the new fertiliser for three consecutive crop seasons, before it is approved.

James Parsons, an importer and avocado grower cites, boron as probably one of the most important fertiliser required in agriculture, but it is unavailable and unregistered in the Tanzanian market.

“Foliar feeds are not sufficient to apply enough boron to the soil. These are also expensive,” Mr Parsons said.

He added: “We need solubor and borax to be registered. These are the simple products used all over the world. Why do they have to be examined when everyone knows what the results will be?” he asked.

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A study on fertiliser taxation in East Africa undertaken by Tanzania Horticultural Association (TAHA) and BEST-Dialogue shows that Tanzania charges the highest tariffs among the EAC member countries.

TAHA chief executive Jacqueline Mkindi said that during their study, they realised that Tanzania charges six indirect taxes. Kenya has five charges, Uganda taxes four including VAT, Burundi imposes three taxes whereas Rwanda only charges two. 

“In Tanzania, fertilisers are tax-free. However, there are six indirect taxes and charges that contribute to the high prices of fertiliser even before reaching the farmers,” said Ms Mkindi.

This, she said, explains why the level of fertiliser use in Tanzania is as low as 7kg of nutrients per hectare compared with 27kg and 53kg nutrients per ha for Malawi and South Africa respectively.

This is despite the Abuja Declaration, to which Tanzania is a signatory, which directs African Union member states to ensure tax regimes, policies and regulations reduce costs of distributing and buying fertilisers in rural areas.

The Tanzania Fertiliser Regulatory Authority defended the charges, saying they are stipulated in the law.

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