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Final Report CF # 3/08 Constraints of Farmers’ Access to Fertilizer for Food Production By M. Jahiruddin, Principal Investigator M. R. Islam, Co-Investigator M. A. Momen Miah, Co-Investigator Department of Soil Science Bangladesh Agricultural University This study was carried out with the support of the National Food Policy Capacity Strengthening Programme May1 2010 This study was financed under the Research Grants Scheme (RGS) of the National Food Policy Capacity Strengthening Programme (NFPCSP). The purpose of the RGS was to assist in improving research and dialogue within civil society so as to inform and enrich the implementation of the National Food Policy. The NFPCSP is being implemented by the Food and Agriculture Organization of the United Nations (FAO) and the Food Planning and Monitoring Unit (FPMU), Ministry of Food and Disaster Management with the financial support of EU and USAID. The designation and presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of FAO nor of the NFPCSP, Government of Bangladesh, EU or USAID and reflects the sole opinions and views of the authors who are fully responsible for the contents, findings and recommendations of this report. May2 2010 Constraints of Farmers’ Access to Fertilizer for Food Production EXECUTIVE SUMMARY Fertilizer is a major input for crop production. Fertilizers that are most commonly used by the farmers of Bangladesh are urea, TSP and MoP, of which urea alone shares 70-75% of the total fertilizer use. Fertilizer use in this country has increased over time due to expansion of irrigation facilities and depletion of soil fertility induced by higher cropping intensity and cultivation of high yielding crop varieties. In 2008, a fertilizer crisis had arisen in the country. The farmers could not buy urea fertilizers in required amounts in time because of insufficient availability. They were unable to buy non-urea fertilizers like TSP and MoP in needed amount because of the high price. Further the farmers were not getting expected benefits from the use of mixed and non-urea fertilizers due to adulteration. Considering these issues, the present study was undertaken in November 2008 for one year with the following objectives: (i) to identify the constraints of farmers’ access to fertilizer, (ii) to evaluate fertilizer marketing systems, and (iii) to suggest modification of existing fertilizer policies to mitigate the constraints. Suitable approaches and tools were followed to achieve the objectives of the study. The approaches included consultation of relevant documents and reports, key informants’ interview (KII), and a household survey. The Upazila Agriculture Officer (UAO) who is the key person for fertilizer issues at the upazila level and who deals with the projection of fertilizer demand, its distribution to the dealers and monitoring of sale was interviewed. The interviews (KII) were conducted in 11 upazilas across the country: Phulpur (Mymensingh), Kalihati (Tangail), Gabtali (Bogra), Ulipur (Kurigram), Kaharol (Dinajpur), Naogaon Sadar, Paba (Rajshahi), Doulatpur (Kushtia), Faridpur Sadar, Chandina (Comilla) and Bahobol (Habiganj). A household survey of individual farmers and interviews were carried out in three villages under three upazilas: Panihari (Phulpur upazila), Chak-Sekendar (Gabtali upazila) and Harang (Chandina upazila). A total of 75 farmers consisting of 25 in the marginal category (owning <0.5 ha land), 25 in small category (0.5-1.0 ha land) and 25 medium category (1.0-2.5 ha land) farmers in the three villages. A structured questionnaire was followed for i the survey. Data of fertilizer use and farmers’ characteristics, along with farmers’ response to the constraints of accessibility to fertilizers were collected. The fertilizer demand in Bangladesh is met by domestic production and import. For urea, a significant portion of the demand is met from local production and for non-urea fertilizers, a significant demand is met by import (about 90% import for TSP, 100% for MoP and about 50% for DAP) which is largely done by the private sector and a small portion by BADC. In Bangladesh at present there are six urea producing factories, one TSP and one for DAP all which are under the control of Bangladesh Chemical Industries Corporation (BCIC). The six urea factories have the maximum annual production capacity of 23.2 lakh tons, but the capacity has come down to 12.8 lakh tons production in 2008-09. The rest amount of urea demand is met by import from KAFCO (privately run in Bangladesh) and other countries such as KSA, Kuwait and China. Regarding fertilizer prices, urea is being sold at Tk.12/kg, with effect from June 2008. Price of non-urea fertilizers was quite high in 2008: TSP 80/kg, MoP Tk. 75/kg and DAP Tk. 85/kg. The new Government has revised its price, now the rate (as of November 2009) is Tk. 22/kg TSP, Tk. 25/kg MoP and Tk. 30/kg DAP. These prices are noted to be affordable to the farmers. Projection of fertilizer demand is an important aspect for fertilizer availability to the farmers. The Upazila Agriculture Officer (UAO) estimates the fertilizer demand, primarily based on previous year allocation and not based on soil fertility level. A fertilizer demand projection model has been developed under this study, based on soil fertility status of an area. It is simple and useful model, which can be efficiently used as a tool for assessing fertilizer requirement of different crops at different scales (plot, farm, upazila, district and national scales). Distribution channels for both urea and non-urea fertilizers are similar. The same BCIC dealers lift out the urea fertilizer from the factory gate and buffer godowns, and TSP fertilizer from factory gate and importers’ warehouse. The BADC dealers collect non-urea fertilizers from BADC godown only. The farmers can buy fertilizers both from dealers (union level) and retailers (ward/village level). ii The quality of non-urea fertilizers is often below standard, with more than 80% adulteration for mixed fertilizers (NPKS), above 50% adulteration for privately imported SSP and TSP, and 25-30% adulteration for MoP and DAP. Adulteration might occur at the storage and distribution places. This is an alarming situation. Quality of locally produced fertilizers is quite good. In 2008, the main constraint of farmers’ access to urea fertilizer was the inadequate availability of fertilizer for introducing the controlled sale system where urea was sold in 4-5 days a week in presence of a Sub-Assistant Agriculture Officer (SAAO). For non-urea fertilizers like TSP, MoP and DAP, the main constraint was found to be high price. However, the situation has much improved and those two constraints are no longer valid. The new Government has withdrawn the controlled sale system and revised the non-urea fertilizer price twice, with 50% reduction each time. Farmers have no complaints about the present sale system of urea (no card/slip, dealers’ shop open 7 days a week). Now the farmers can buy urea in required amount for use in their crops. From the fertilizer use data, it appeared that farmers were using fertilizers less than the requirement. There were negligible differences for urea, considerable difference for TSP and remarkable difference for MoP, even in 2009 when price of non-urea fertilizer was substantially reduced. This created unbalanced use of fertilizers which produces negative impact on soil fertility and crop yield. The principal reason for lower use of TSP and MoP fertilizers was determined to be the lack of adequate knowledge and motivation about the benefits of non-fertilizers on soils and crops. Fertilizer use was found to be significantly correlated with farm size (r = 0.844 for urea, r = 0.524 for TSP and r = 0.665 for MoP) and annual income (r = 0.684, 0.477 and 0.596, respectively). So, the marginal farmers use lesser amount of fertilizers than the small farmers, and the small farmers use lesser amounts than the medium farmers. Other characteristics such as age, education, family size, farming experience, training experience, communication exposure and use of organic fertilizers by farmers did not show significant relationship with their chemical fertilizer use. Farmers are interested in using urea super granule (USG) in rice cultivation since it reduces urea use by 25-30% and increases yield by 20-25%. The lack of adequate availability of USG in the market is a major constraint. Promotion of USG technology would save urea fertilizer demand to a considerable extent. iii Overall, the study indicates that inadequate availability of urea fertilizers and the high price of non-urea fertilizers (TSP and MoP) were the major constraints for fertilizer access and use in 2008. These constraints have been largely removed in 2009 with the change of fertilizer sale and price policies by the new Government. Now, the major issues are related to fertilizer (non-urea) adulteration, unbalanced fertilizer use and fertilizer use at lower rates by the marginal and small farmers. Recommendations Fertilizer supply and distribution The present policy of urea production, import and distribution under the Government control should be continued. In the case of non-urea fertilizers (TSP, DAP and MoP), the on-going policy of private sector import mainly distributed by the Government control can be continued. Strong monitoring is needed at storage and distribution points to check adulteration of the fertilizers. Fertilizer estimation template The fertilizer template developed in this study can be considered for use by the Upazila Agriculture Officer (UAO) for fertilizer demand estimation. This template can also be used from micro to macro levels i.e. from farm to country levels. Fertilizer prices and sale system Present price of urea (Tk. 12/kg) and that of non-urea (TSP Tk. 22/kg, MoP Tk.

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