Why does it cost so much?
A ship carrying fertilizer docks at an East African port. Are the cranes
working? Has the cargo been cleared for offloading? Are there enough rail
trucks available,
or secure storage facilities? If the answer to any of these questions
is "no", who pays? The African farmer up country. And he or she
is already paying for expenses, real or anticipated, incurred in both formal
and informal payments to get goods out of customs and across borders, to say
nothing of covering the costs of the inevitable pilferage which will occur.
This is not to say that all African ports present all these problems all
the time, nor that the continent is alone. Nevertheless, they are sufficiently
common for suppliers to make sure, through their price for their product,
that they are well covered for every eventuality, both certain and uncertain.
This necessity, coupled with the comparatively low volume of business, jacks
up the price well beyond the reach of all but the bigger, commercial farm
enterprises.
And it is these commercial businesses who are trying to compete on
the world market.
The penalty is being paid not once, but twice. For every inefficiency in delay, double handling, and handout, there is a cost. And when the producers' crops make their return journey by road or rail to the port of export, the whole process is played out again in reverse. Who pays this time? Again, it is the producer, squeezed - because he or she is squeezable- to accept a farmgate price low enough to allow all the supply chain costs to mount up on top. If African farmers are to play their part in reducing the continent's food deficit, they must have the fertilizer inputs they need at a price they can afford. Transport forms up to half of the landed cost of fertilizer in most of the remote crop production areas of Africa so fertilizers could cost less, if only the supply chain did not hang so heavy around the neck of supplier and user alike, strangling farmers' hopes of greater prosperity.
