President William Ruto’s flagship fertiliser subsidy programme has come under renewed scrutiny after a damning World Bank report revealed it may have wiped out more than 200,000 jobs across Kenya’s agricultural supply chain.
The multilateral lender says the losses stem from the centralised National Fertiliser Subsidy Programme (NFSP-2), which fundamentally altered how fertiliser is imported, distributed and sold — with devastating consequences for private agro-dealers and last-mile distributors, particularly in rural Kenya.
How Ruto’s Fertiliser Plan Backfired
According to the World Bank, the government’s decision to centralise fertiliser importation and distribution, working with only a small number of approved importers, effectively shut out thousands of private players who previously powered the sector.
Under NFSP-2, only authorised vendors — largely state-affiliated outlets — were allowed to sell subsidised fertiliser at fixed, below-market prices. While the move was aimed at lowering costs for farmers, the report warns it instead crowded out equally efficient competitors, triggering massive job losses.
“By establishing exclusivity in the distribution and retail of subsidised fertilisers, NFSP-2 could potentially be generating distribution inefficiencies and crowd out equally efficient competitors,” the World Bank noted, adding that job losses along the supply chain are estimated at over 200,000 positions.
Most affected were last-mile agro-dealers, many of whom lost their businesses overnight when they were locked out of the subsidised fertiliser market.
The report also highlights another unintended consequence: reduced access for farmers, especially those in remote areas.
Previously, farmers could buy subsidised fertiliser from a wide network of private agro-dealers within their communities. Under the new model, many were forced to travel longer distances to government depots — increasing transport costs and delaying access to critical farm inputs.
“In practice, this means most last-mile agro-dealers are unable to participate even if they can deliver better service to customers,” the World Bank observed.
Before NFSP-2, Kenya’s fertiliser market was largely liberalised. Private companies imported fertiliser, sold it through thousands of agro-dealers, and prices were determined by market forces. Targeted farmers received cash or voucher-based subsidies, allowing them to buy inputs from outlets of their choice.
The new system scrapped that flexibility, concentrating power in a few hands — a move the World Bank suggests undermined efficiency and employment.
Quality Concerns Add to the Controversy
The fertiliser saga has also been dogged by quality concerns. In 2024, the Kenya Bureau of Standards (KEBS) recalled 5,800 bags of fertiliser after tests showed they failed to meet required standards.
KEBS Managing Director Esther Ngari told Parliament that BL-GPC Original fertiliser, distributed through the National Cereals and Produce Board (NCPB), was neither organic nor compliant with certification rules and had counterfeit standardisation marks.
Big Questions for Government
The revelations raise uncomfortable questions for the Ruto administration, which has repeatedly touted the fertiliser subsidy as a cornerstone of its food security agenda.
As farmers grapple with access challenges and agro-dealers count their losses, pressure is mounting on the government to rethink the model, restore private sector participation, and strike a balance between affordability, efficiency and jobs.
For now, the World Bank report paints a sobering picture: a well-intended subsidy that may have cut costs for some farmers — but at the expense of livelihoods for hundreds of thousands of Kenyans.
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