LIBERIAFERTILIZERASSESSMENT

LiberiaFertilizerAssessment

P.O. Box 2040 Muscle Shoals, Alabama 35662, USA

www.ifdc.org

In Support of:

The African Fertilizer and Agribusiness Partnership

October 2014

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Acknowledgments

This study was commissioned and funded by the United States Agency for International

Development (USAID) under the Feed the Future (FTF) initiative. It is part of a set of studies

covering 12 countries in sub-Saharan Africa (SSA) in support of the African Fertilizer and

Agribusiness Partnership (AFAP), a collaboration among the International Fertilizer

Development Center (IFDC), Alliance for a Green Revolution in Africa (AGRA), African

Development Bank (AfDB) and Agricultural Market Development Trust (AGMARK), with the

support of the African Union (AU) specialized agency, the New Partnership for Africa’s

Development (NEPAD).

Porfirio Fuentes, IFDC senior scientist – economics and trade, of the IFDC’s Office of Programs,

produced this report based on literature review and interviews conducted in Liberia. This

assessment draws also on a fertilizer assessment survey conducted in August 2013 by Jean

Sogbedji, Soil Fertility Officer at IFDC-NWAFD. Joshua Ariga, scientist – economics, Office of

Programs, provided support in finalizing the report.

The staff of the Liberia Ministry of Agriculture, fertilizer importers, distributors, retailers and

farmers in Liberia provided useful information and insights to the assessment team. Special

thanks goes to Mr. Jonathan Boiboi for his collaboration in coordinating the field visits and to

Dr. Subbah, Ministry of Agriculture, for facilitating the visit to Liberia.

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TableofContents

Executive Summary ........................................................................................................................ v 

1. Introduction ................................................................................................................................. 1 

2.0 The Conceptual Framework ...................................................................................................... 3 

3.0 Data Collection Methodology ................................................................................................... 3 

4.0 Policy and Institutional Framework .......................................................................................... 4 

4.1 Role of Public Institutions ................................................................................................. 4 

4.2 Agriculture Policy Framework and Development Programs ............................................. 5 

5.0 Review of Agricultural Sector .................................................................................................. 7 

5.1 Land, Soil and Water Resources ........................................................................................ 7 

5.2 Land Tenure and Use ......................................................................................................... 8 

5.3 Agriculture Productivity and Production ........................................................................... 9 

6.0 The Liberia Fertilizer Market .................................................................................................. 11 

6.1 Fertilizer Supply Chain for Liberia .................................................................................. 12 

6.1.1 Players in the Fertilizer Market ............................................................................. 13 

6.1.2 Fertilizer Importation and Consumption ............................................................... 15 

7.0 Estimating Fertilizer Requirements to Meet Agricultural Growth Targets ............................ 16 

8.0 Key Challenges in Fertilizer Value Chains and Recommendations ....................................... 19 

8.1 Dealing with Challenges in Value Chains to Meet Agricultural Growth Targets ........... 19 

8.1.1 Regulatory Framework .......................................................................................... 19 

8.1.2 Uncertainty in State Market Interventions ............................................................ 20 

8.1.3 Access to Credit ..................................................................................................... 20 

9.0 Conclusion and Suggestions ................................................................................................... 21 

References ..................................................................................................................................... 23 

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ListofTables

Table 1. Average Production, Area and Yield for Select Crops in Liberia 2006-2012 ................ 10 

Table 2. Yield and Production Gaps Based on NAIP Targets. ..................................................... 17 

Table 3. Using Nutrient Removal Factors to Estimate Fertilizer Requirements .......................... 18 

Table 4. Incremental Nutrient and Product Requirements ............................................................ 19 

ListofFigures

Figure 1. Fertilizer Supply Chain .................................................................................................. 13 

Figure 2. Fertilizer Import Trend in Liberia, 1961-2012 .............................................................. 15 

   

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Acronyms

AFAP African Fertilizer and Agribusiness Partnership AfDB African Development Bank AGMARK Agricultural Market Development Trust AGRA Alliance for a Green Revolution in Africa AU African Union CAADP Comprehensive Africa Agriculture Development Program CAAS Comprehensive Assessment of the Agriculture Sector CARI Central Agricultural Research Institute CBL Central Bank of Liberia CIA Central Intelligence Agency CIF Cost, Insurance and Freight DAP Diammonium Phosphate ECOWAS Economic Community of West African States FAO Food and Agriculture Organization of the United Nations FAOSTAT Food and Agriculture Organization Statistical Databases FAPS Food and Agriculture Policy and Strategy FED Food and Enterprise Development [Program for Liberia] FSNS Food Security and Nutrition Strategy FTF Feed the Future Initiative [USAID] GDP Gross Domestic Product GoL Government of Liberia ha hectare IFDC International Fertilizer Development Center ISFM Integrated Soil Fertility Management kg kilogram LASIP Liberia Agriculture Sector Investment Program MDG Millennium Development Goals MoA Ministry of Agriculture MOP Muriate of Potash mt metric ton NAIP National Agriculture Investment Plan NEPAD New Partnership for Africa’s Development [AU] NGO Non-Governmental Organization PRS Poverty Reduction Strategy SSA Sub-Saharan Africa UDP Urea Deep Placement USAID United States Agency for International Development VAT Value-Added Tax WB World Bank WFB World Fact Book [CIA]

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LiberiaFertilizerAssessment

ExecutiveSummary

The agricultural sector in Liberia is dominated by smallholder farmers with low productivity,

partly resulting from low access to improved agricultural production technologies, especially

fertilizer. To raise productivity and total production it is important to encourage agricultural

intensification in order to achieve the National Agriculture Investment Plan (NAIP) growth

targets, especially for marginal lands that cover large parts of Liberia. The adoption of improved

technologies under an integrated soil fertility management (ISFM) framework can raise

productivity and augment smallholder farmers’ incomes and reduce food insecurity, while

preserving the environment.

Fertilizer prices are relatively high in Liberia, driven by demand and supply forces that are

constrained by structural impediments. Some of the fertilizers intended for use in the commercial

export subsector (rubber, sugar, cotton and oil palm) are diverted to non-export crops, therefore

creating a mismatch between fertilizer product and target crops.

Since fertilizer use in Liberia is at a rudimentary stage, a holistic approach is required to

encourage smallholder farmers to adopt and increase use by lowering costs at farm-gate. The

introduction of technology packages should be accompanied by investments to build the capacity

of agro-dealers and farmers to understand the agronomic aspects and benefits of using fertilizer

and the development of an enabling environment with clear legal and regulatory framework and

enforcement capacity. With this framework in place and the provision of appropriate fertilizer

blends and pack sizes made affordable to farmers – coupled with incentives to increase fertilizer

use through access to credit – crop insurance and output markets will encourage increased

productivity, income and improved food security.

This assessment contributes to providing some insights that will help stakeholders tackle these

challenges. The report estimates fertilizer quantities that will contribute to achieving the NAIP

agricultural growth targets by 2017. It also identifies the challenges in the supply chain and

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recommends policy actions necessary to support the increased levels of estimated fertilizer

consumption and the associated increase in output.

The estimation of annual fertilizer requirements at a national level is a challenging exercise that

can lead to under- or over-estimations of demand. In this assessment, estimates indicate that

Liberia must increase its consumption from about 3,000 metric tons (mt) of fertilizer products

per year to 28,000 mt in order to meet the agriculture sector growth targets by 2017. This level of

fertilizer use will require addressing existing constraints in the supply chain in order to deal with

larger volumes. This includes addressing bottlenecks in the procurement, importation and

distribution as well as addressing research and extension challenges.

Logistical problems exacerbated by poor roads, storage and trucking services add to the costs of

fertilizer. Improved infrastructure is required to reduce costs of moving fertilizer from ports to

farmers. Efficiency in logistics will contribute to fertilizer quality and, coupled with appropriate

recommendations and technical knowledge, raise yields and production, which will increase

demand for fertilizer.

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LiberiaFertilizerAssessment

1.Introduction

Liberia became the first internationally recognized independent African country in 1847. It

experienced some growth in gross domestic product (GDP) despite many years of poor

governance and economic inequalities (Clower et al, 1966) that led to the 1980 military coup

followed by a 14-year civil war (1989-2003) that devastated the socio-economic structure in the

country. The civil war disrupted economic growth in Liberia, hindering development activities

and exacerbating poverty. To reduce post-war food insecurity, the Government of Liberia (GoL)

and its partners have been working to revitalize the agricultural sector and raise rural smallholder

farmers’ incomes.

Approximately 70 percent of the population lives in rural areas, primarily engaged in smallholder

subsistence farming. Total population is estimated at 4.2 million (WB, 2014) with 2.5 percent

annual growth (CIA-WFB, 2014). Despite Liberia’s modest economic growth, poverty remains

relatively high at 64 percent (WB, 2014) and is higher in rural areas. Liberia ranks third among

the 20 poorest countries in the world and is the fourth poorest in sub-Saharan Africa (SSA) with

a U.S. $300 annual income per capita in 2013. An estimated 84 percent of the population

(3.53 million people) survives with an income below the poverty line. The Food and Agriculture

Organization of the United Nations (FAO) classifies Liberia as a low-income, food-deficit

country with half of the population classified as food-insecure or highly vulnerable to food

insecurity (CAAS-Lib Report, 2007).

Despite many years of civil unrest, Liberia has had an average 7.5 percent annual GDP growth

during the 2001-2013 decade, compared with 20.4 percent in the preceding decade (WB, 2014).

Liberia’s economy is heavily reliant on agriculture as the main source of foreign exchange and

employment. It is estimated that in 2012, agriculture accounted for 70 percent of total

employment, 25 percent of exports and 39 percent of GDP, which dropped to 26 percent by 2013

(CBL, 2013). The service and industry sectors accounted for most of the differential in GDP

(CBL, 2013). The relatively small country (GDP @ U.S. $2.9 billion in 2013) has unreliable

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electric power supply, poor infrastructure, high transportation costs and macroeconomic

instability reflected in high inflation rates, heavy domestic debt burden and high dependence on

donor funding (GoL, no date).

Over the last couple of decades, the relative contribution of various sectors to the GDP has

shifted. Although during the war agriculture production declined, in 2012 its share of GDP was a

modest 39 percent (with a growth rate of 3.7 percent), compared with a 2002 estimate of

80 percent (WB, 2012). This structural shift from agriculture to industry is partly a consequence

of the devastation on the agriculture sector from the long civil conflict. As a result, Liberia

became dependent on food imports accounting for 95 percent of the urban food requirements.

Rubber, an export crop, contributed about 31 percent of agriculture GDP in 2008 (LASIP, 2010).

To address the challenges facing agriculture, GoL engaged in a series of countrywide discussions

and consultations with various public entities, private sector partners and civil society. These

discussions led to the adoption of new policies and programs under the National Agriculture

Investment Program (NAIP) and to the adoption of the CAADP Compact. To address the

challenges of poverty, food insecurity and malnutrition, GoL is implementing the NAIP under

the Liberia Agriculture Sector Investment Program (LASIP), which encompasses policies and

programs in line with the pillars of the Comprehensive Africa Agriculture Development Program

(CAADP) framework. Under LASIP, GoL has committed to raise agricultural growth by at least

6.0 percent and keep the national budget allocated to agriculture to at least 10 percent in line with

the CAADP.

This study adds to the body of knowledge in support of efforts towards the implementation of the

NAIP. The purpose of this assessment is to estimate the quantities of fertilizer required to meet

the agricultural production targets and to identify and make recommendations to tackle the

primary challenges in the fertilizer value chains. The report addresses two fundamental

questions:

How much fertilizer is needed for smallholders to produce the quantities of food, cash crops

and export crops targeted in the NAIP?

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What public investments and policy changes are necessary to ensure a smooth flow of these

new and significantly increased quantities of fertilizer through the supply chain?

2.0TheConceptualFramework

This study adopts a value chain framework as the core methodology to address the issue of

procuring and distributing enough fertilizer to meet the agricultural growth targets. An analysis

of the amount of fertilizer needed and the capacity of the existing fertilizer distribution system to

meet those needs requires an assessment of the nodes in the value chain, associated stakeholders

at each node and commodity flows along value chains. To achieve this, the following

assumptions are made: (1) the NAIP crop production targets accurately reflect the national food

requirements, (2) markets will adapt and absorb the increased levels of crop production, and

(3) fertilizer use will be profitable despite changes in relative prices occasioned by demand

and/or supply forces in input and output markets.

The study discusses the role and effect of policy on the value chain participants in light of

increased fertilizer use and examines the complementary role played by the existing physical,

human, institutional and financial capacity in raising efficiency of the distribution system. The

challenges to raising the flow of fertilizer through the chain are identified using simple tabular,

graphic and descriptive analyses.

3.0DataCollectionMethodology

Two methods were applied in collecting data and information for this study: (1) secondary data

and (2) empirical data collection through interviews with key players in the public and private

sector (Ministry of Agriculture [MoA], importers and other businesses, organizations and

institutions implementing projects and conducting research in Liberia, etc.). The study derived

most of the data from existing or secondary literature or reports on fertilizer issues in Liberia by

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various organizations and research institutes, including IFDC. This exercise covered the

following areas, though some information was unavailable in sufficient detail:

National country investment plan targets from country development plans and CAADP

documents.

Agricultural production data: crops, area cultivated and production.

Fertilizer: imports, consumption, application rates per hectare (ha) and adoption rates.

There is a significant amount of data that is not available from literature sources, which therefore

required the study team to travel to Liberia to meet with and collect necessary information and

perspectives from key stakeholders. Problems were encountered where some desired data were

not available or accessible, including the following:

1. Disaggregated data on application rates per hectare by crop.

2. Percentage of farmers using fertilizer by crop and region.

3. Quantity of fertilizer products for each crop; fertilizer consumption in many SSA countries is

reported at the national level, and quantities are not reported by crops or regions.

4.0PolicyandInstitutionalFramework

4.1RoleofPublicInstitutions

To facilitate the implementation of policies, strategies and programs, GoL relies on key public

institutions led by MoA, which is the central institution responsible for regulating and promoting

agricultural development through appropriate policy design and implementation. MoA has

approximately 25 percent of its staff in rural areas while the rest are stationed in and around

Monrovia, the capital city. In addition, poor delineation of departmental responsibilities leads to

conflict from overlapping roles, creating competition for scarce resources. All these derail

service delivery to farmers as the ministry undergoes a restructuring process to clarify roles and

responsibilities across divisions and to deploy more staff in counties or districts where they are

most needed. However, any changes will undergo a slow legislative approval process, which

may delay implementation of an improved structure. Among others, MoA has a planning

department that hosts the policy analysis division dealing with policy formulation and a research

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and extension department with the responsibility for coordinating the dissemination of

information to farmers.

The Central Agricultural Research Institute (CARI) is a state research agency within MoA with

the mandate to conduct applied agricultural research to encourage adoption of appropriate

technologies. Its infrastructure and network with local and international research centers is poor,

and it is undergoing a rebuilding effort to recover from the destruction of its buildings during the

war. GoL supplies seed through CARI to farmers on credit, which is repaid at harvest (USAID-

FED Project/IFDC, 2013). Farmers also purchase seed from large producers or use their own

seed from the previous season’s harvest.

The Liberian Extension Services have been characterized by a top-down approach on the

“transfer of technology” with little capacity building at farm level using a participatory approach.

As a result of a weak extension system, farmer recommendations are not up to date, and

technology dissemination is limited.

Prior to the civil war, GoL was engaged in marketing agricultural inputs and outputs through a

number of parastatal institutions whose creation was justified on the grounds of market

imperfections and failures facing smallholders. These public input and output marketing agencies

performed poorly and faced rent-seeking activities, taking a toll on public funds through

subsidies in order to stay afloat. Most of these public agencies were associated with export crops

like rubber, coffee, cocoa and palm oil. These institutions were set up to administer the

production, marketing of major crops and faced management challenges, rent-seeking, etc. These

challenges affected their performance.

4.2AgriculturePolicyFrameworkandDevelopmentPrograms

Although Liberia currently has no comprehensive agricultural policy and regulatory system, it is

in the process of developing one with assistance from the international donor community.

Liberia’s agriculture framework is based on the Vision 2030, which projects where the nation

ought to be in the year 2030 and provides a long-term framework for decisionmakers in the

public and private sectors and civil society. It seeks to rebuild Liberia, recognizing the challenges

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and constraints imposed by the past while taking advantage of the opportunities offered within

current domestic and international space. The Vision also seeks to strengthen the nexus between

peace, democracy and development. In support of the Vision, GoL has adopted international and

regional policies and programs and developed its own policy framework.

The NAIP identifies priority areas for investment in line with CAADP to transform the

agriculture sector and contribute to economic growth, employment, food and nutrition security,

and poverty reduction by 2020. The NAIP adopts a pro-poor approach to raise productivity,

strengthening institutions and making markets work through commercialization and private

sector initiatives, such as outgrower schemes. Under NAIP, GoL has committed to revise and

reform policies including the liberalization of cocoa and coffee marketing and the provision of

fiscal incentives, such as the removal of tariffs on agricultural inputs, to facilitate private sector

investment. GoL recognizes that the implementation of NAIP will require institutional reforms to

develop capacity in the public sector. The structure and roles of MoA and state agencies have to

be redefined through a decentralization of activities. Through an institutional development

program, GoL plans to develop capacity in the public sector for policy formulation, planning,

coordination and implementation and monitoring of agriculture programs and projects using

evidence-based policy analysis and recommendations.

A number of domestic policy papers and strategies have been designed to spur agricultural

growth and improve food security and nutrition while safeguarding the environment. The

Poverty Reduction Strategy (PRS, 2008-2011) is a medium-term, multi-sector, comprehensive

policy framework that articulates the vision for moving toward inclusive sustainable growth and

development to achieve the Millennium Development Goal (MDG) of halving hunger and

extreme poverty by 2015.

In 2010, Liberia signed and adopted the CAADP compact, committing to work toward achieving

an agriculture sector annual growth rate of 6 percent and meeting the Maputo pledge of

allocating at least 10 percent of the national budget to the sector. The thrust of these efforts is to

strengthen the Food and Agriculture Policy and Strategy (FAPS) and the National Food Security

and Nutrition Strategy (FSNS), both developed within the broader context of the PRS.

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Under FAPS, GoL has articulated its efforts to meet the 6-percent agriculture growth target

through investments to develop more competitive, efficient and sustainable food and agricultural

value chains and linkages to markets; improve food security and nutrition, especially for

vulnerable groups; and strengthen human and institutional capacity. GoL has a program to

develop competitive value chains and market linkages through rural infrastructure investments,

encouraging agro-processing and outgrower schemes and finance services to rural farmers. The

NAIP recognizes the need for a land and water resources management policy to promote

adoption and use of new technologies.

The objective of FSNS is to ensure food availability, access and utilization by focusing on the

needs of the food insecure and nutritionally vulnerable groups in the society. To achieve its goal,

the FSNS envisions to exploit all opportunities to increase food production by addressing the

constraints farmers face, diversifying food production, improving post-harvest processing,

safeguarding communal resources that are important food sources, maintaining predictable and

stable food imports, strengthening Liberia’s strategic food reserve mechanisms, and making

appropriate use of international food assistance.

5.0ReviewofAgriculturalSector

5.1Land,SoilandWaterResources

Liberia occupies a land area of approximately 111,370 square kilometers (about 43,506 square

miles), of which 86 percent is dry land with the remaining area covered by water (LASIP, 2010).

Nearly 600,000 ha are considered arable land, out of which 220,000 ha are under permanent

cultivation with tree crops, mainly rubber and oil palm (FAO, 2005).

Soils range from muds and hydromorphic clays along the coast and the inland swamps to

shallow soils on the mountain plateaus in the north. The upland soils are generally acidic with

low fertility and low water-holding capacity, and they are prone to soil erosion. The flood plains

have the problem of potential flooding that can destroy crops, but the effect of flooding can be

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reduced with proper cropping timing and adequate drainage. The valley swamps, which are

potential rice fields, are poorly drained and have low fertility and organic matter. The low hills

are well-drained lands that can be used for upland rainfed rice, vegetables and cassava

production but also have the problem of low fertility and are prone to soil erosion.

Though water is not a major constraint for Liberia, which has some rivers and lakes across the

country, irrigation potential is underutilized with no comprehensive strategies in place (LASIP,

2010). Liberia is one of the African countries with the highest per capita renewable water

resources with an annual 71,000 cubic meters per capita, of which agriculture takes 57 percent,

followed by the domestic sector with 28 percent and industry with 15 percent (FAO, 2005).

5.2LandTenureandUse

Liberia does not have a national land registry and, therefore, no records to determine the land

ownership, transfers, boundaries, etc. Most land holdings lack formal titles; the main land tenure

and holding systems are: (a) title holders, (b) customary occupation, (c) leasing, (d) borrowers

and (e) squatters.

Customary land tenure without title is the dominant system in more intensive agricultural areas.

Title holdings and customary occupation allow for land rental or leasing and borrowing. Under

these arrangements, tenants are allowed to plant only annual crops, and land is typically rented

for one cropping season to avoid permanent land claims by tenants. Land borrowers typically

know the lender and are expected to supply a given amount of the produce to the owner. Some

tenants refuse to leave after renting the same land for several years and claim that investments in

the form of trees, etc., entitle them to some ownership. Therefore, the prospects of long-term

land development, such as soil conservation and planting of tree crops (including adoption of

technology), are influenced by tenancy (Deininger, 2003). Even title holders may be unwilling to

make long-term decisions due to potential fraud and disputes on uncertain land boundaries and

multiple rental transactions. There is also the fear that the well-connected may expropriate land

that has attractive investments on it, which deters occupiers from making necessary investments

such as soil conservation measures. These reduced investments in improved technology and

appropriate management practices will lead to reduced yields and incomes.

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There is a drafted Land Commission Bill that is intended to resolve disputes and lay the legal

framework for transactions on land.

5.3AgricultureProductivityandProduction

In Liberia, agricultural production has been relying on extensive cultivation with low

productivity using limited improved techniques and technologies like fertilizers (LASIP, 2010).

Though Liberian climatic conditions potentially allow for multiple cropping seasons per year,

there is only one planting per year due to poor knowledge, financial constraints and absence of

risk-mitigating strategies. The traditional subsistence farming method includes shifting

cultivation with slash and burn before planting, with 95 percent of the farms located in the

uplands. These farming practices can lead to deforestation, soil erosion, loss of biodiversity and

land degradation due to soil mining. Basic rudimentary tools are used for land preparation, and

use of improved technology such as fertilizers is not widespread. Therefore, better farming

tools/implements, coupled with adoption of improved technology, can raise productivity and

production in Liberia.

Timber, which made up to 50-60 percent of total exports until the early 2000s, was recently

eliminated from trading due to international sanctions. Rice and cassava are the country’s first-

and second-ranked main staple food crops, cultivated by 71 percent of farm families in fragile

uplands. Cassava is cropped as a follow crop after rice, at times planted intercropped with maize,

vegetables and other food crops. Rice occupies the largest cultivated area, followed by rubber

and cassava.

The average yields for rice and cassava are 1.3 and 7.2 mt/ha, respectively. Rice is an important

staple food crop with an estimated annual consumption of 120 kilograms (kg) per person,

equivalent to a national total of 468,000 mt/year with a 2011 population of 3.9 million (IFDC,

2013). Based on the 2010 GoL Agricultural Survey, 73.7 percent or 209,740 farmers of

agricultural households were rice producers with 25.9 percent female-headed households (GoL,

2014).

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Thirty-three percent of the caloric intake per capita is from rice, followed by 21 percent from

cassava (FAOSTAT, 2007). Though rice production has increased sharply from 164,000 tons in

2006 to 291,000 tons in 2012 (FAOSTAT, 2014), there is still significant deficit to meet

consumption which is complemented with imports. The deficit is made up through subsidized

rice importations, which accounted for 69 percent of annual supply and consumption in 2011. By

2015, rice production is projected to reach 400,000 ha from 180,000 ha in 2006 based on

consumption levels of 124 kg per capita (CAAS-Lib Report, 2007). Other traditional food crops

are cassava and vegetables, whose production are also expected to expand rapidly. (ECOWAS

Commission, Republic of Liberia. AU-NEPAD, no date)

Table 1. Average Production, Area and Yield for Select Crops in Liberia 2006-2012

Production Area Yield (mt) (ha) (mt/ha) Cereals Maize, green 21,231 6,375 3.34 Rice, paddy 267,006 211,544 1.28 Pulses and Legumes Soybeans 3,121 7,621 0.41 Pulses 3,611 5,546 0.65 Groundnuts, with shell 5,214 7,871 0.66 Roots and Tubers Sweet potatoes 20,236 2,079 9.78 Taro (cocoyam) 26,925 3,164 8.51 Yams 20,401 2,385 8.55 Cassava 506,186 71,097 7.20 Other Crops Oranges 8,259 2,353 3.54 Pineapples 8,006 1,429 5.61 Bananas 122,143 11,261 10.85 Plantains 46,216 20,167 2.30 Fruit, tropical 3,251 586 5.54 Commercial/Cash Crops Rubber, natural 78,100 95,786 0.82 Oil, palm fruit 42,214 17,000 10.25 Sugarcane 263,571 25,857 10.19 Cocoa, beans 5,957 35,071 0.17 Coffee, green 1,942 8,386 0.23 Fresh vegetables 75,213 13,996 5.40 Totals 1,528,805 549,575

Source: FAOSTAT, 2014.

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Low productivity for rice is reflected in the dominance of upland production system

(>90 percent) with little surplus entering the commercial market. Rice is also produced in the

lowland swamps during the rainy season under irrigation/flooding system in rotation with

vegetables during the dry season. The smaller farms in the lowlands have higher yields than in

the uplands. Rice growers face challenges from poor seeds and access to fertilizer and farming

tools, unreliable rainfall and extension services. Among tree crops, rubber production has been

critical to agricultural growth, accounting for about 86 percent of total exports in 2008, declining

to about 40 percent by 2013 (CBL, 2013). Oil palm and cocoa are the other dominant export tree

crops.

Inadequate storage and processing facilities, coupled with poor roads and high transactions costs,

make it difficult for farmers to produce for the market. Liberia only has 700 km of paved roads,

with most of it in need of repairs, in addition to 2,504 km unpaved secondary roads and

1,425 km feeder roads (CAAS-Lib report, 2007). Subsidized imported rice has a competitive

edge over the local supply of rice, which faces constraints ranging from poor seed technology to

high transport costs. High costs of production and the import subsidies will continue to

contribute to low access to output markets for farmers and therefore reduced production of rice

(USAID-FED, 2014).

The problem of inadequate infrastructure for value addition (storage, processing facilities)

contributes to post-harvest losses (USAID-FED, 2014). Large private businesses dominate the

export market for rubber and oil palm products, while the state is divesting from coffee and

cocoa and letting private business participate. There are wholesale and retail markets scattered in

rural and urban centers across the country where small- and medium-sized private businesses

operate.

6.0TheLiberiaFertilizerMarket

Information on Liberia’s fertilizer imports and consumption is difficult to access since records

are either unavailable or poorly kept and incomplete. However, available data indicates that the

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fertilizer market is small with limited formulations and most common fertilizers being triple

superphosphate (15-15-15) and urea. Fertilizer use by smallholder farmers is low with most of

the imported fertilizer being used by large commercial crop producers, including multinational

companies; medium-sized plantations growing rubber, oil palm, sugar, coffee and cocoa; and

farmers in vegetable and lowland rice production. Adoption rates by subsistence/staple food

crops farmers are low, and those that use fertilizers do so in small amounts and not sustainably.

Fertilizer use is limited due to farmers’ lack of knowledge, access to fertilizer and high prices.

6.1FertilizerSupplyChainforLiberia

Liberia’s fertilizer market is not well-developed and is characterized by few suppliers/importers,

who are located mainly around Monrovia. The commercial importers supply government/non-

governmental organization (NGO) projects, plantations and large farms, retailers, and

smallholder farmers directly. There is some trickle-down from plantations when they have

surplus fertilizer that spills onto the market, merging with fertilizers that cross the borders from

neighboring countries to retailers and directly to smallholder farms. There are few retailers/agro-

dealers who rely on government and donor agencies to purchase their products for distribution to

farmers. Few suppliers have made an attempt to establish distribution points in the rural areas.

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Source: Author’s sketch based on field interviews/discussions.

Figure 1. Fertilizer Supply Chain

Free distribution of fertilizers by donor agencies makes it difficult for private traders to sell their

inputs in the rural areas. There are itinerant stockists or traders who repackage inputs into smaller

packs for distribution to farmers. The repackaging poses a problem of adulteration and quality

deterioration. There is no quality regulatory framework in place nor the capacity to enforce

compliance, in terms of human and testing equipment. Though currently there is a signed

Economic Community of West African States (ECOWAS) regional quality standards legislation,

its implementation and adoption by member states may take some time.

6.1.1PlayersintheFertilizerMarket

Actors in the fertilizer markets include government institutions, private suppliers, international

donors and NGOs. There is no fertilizer policy nor a regulatory system for quality control. Due

to the smallholders’ negligible use of fertilizers, the government, development partners and

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NGOs are focusing on development assistance in the form of improved technologies to jumpstart

adoption. The FAO is distributing free fertilizer in some of their intervention zones through

demonstrations and farmer field days.

In 2011, there were three transnational companies under government concessions, accounting for

about 98 percent of fertilizer and other agro-inputs imported into the country. By 2012, these

changed as more companies entered the market to supply other cash and export crop producers

with fertilizer. These importers also supply government and donors’ programs that then

distribute to farmers at subsidy or free.

Though there are over 20 registered importers, there are three main importers-cum-distributors –

Wienco, Greenfield and Gro-Green – dealing in triple superphosphate, urea, muriate of potash

(MOP) and other NPK formulations. These companies have access to both international and

local sources of financing for their operations. Wienco is the leading importer and has

established a rural distribution network together with donor support under projects like DAI-

FED. It supplies cocoa smallholder farmers with inputs on credit, which are then repaid at

harvest of the crop under an arrangement supported by NGOs and donors. Apart from credit

provision, Wienco also trains agro-dealers and conducts farmers’ field days.

Distributors get their supply from importers, government and donor agencies involved in

introducing fertilizers and other technologies to farmers. Retailers are located in rural towns, and

fertilizer is one of the items among an assortment of merchandise sold by these traders. Some of

these retailers repackage fertilizers into smaller packs before selling to smallholder farmers.

There is some fertilizer that crosses the border from Guinea and Côte d’Ivoire for use in

neighboring regions within Liberia, and some fertilizers intended for the plantation crops find

their way to smallholder farms.1

1 There are cases where farmers sell their subsidized fertilizers to other farmers or to traders who then sell across borders. http://afkinsider.com/71932/illegal-sell-fertilizer-mali-weakens-subsidy-programs/. This is an area that calls for better regional policy formulation and regulatory measures to assure quality of fertilizers.

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6.1.2FertilizerImportationandConsumption

Most of the fertilizer consumed in Liberia is applied on commercial crops with very little used by

smallholder subsistence farmers. Apart from fertilizers that are distributed for free by

international organizations, there is little private trade in fertilizer outside the vicinity of

Monrovia. It is estimated that adoption is approximately 1 percent with less than 4 kg/ha for

those using fertilizers.2 Use of fertilizers is constrained by land tenure (CAAS-Lib report, 2007)

in addition to low education levels, access to extension advice and information on farming

practices.

It is difficult to find up-to-date data and information on fertilizer use in Liberia. Data from the

FAO website (FAOSTAT) predates the civil war and shows declining consumption as the war

approached and negligible use during the war. The institutional breakdown during the war meant

that even the small amounts of fertilizer moving across the border went unrecorded and so were

not reflected in the graph (Figure 2).

Source: FAOSTAT, 2014.

Figure 2. Fertilizer Import Trend in Liberia, 1961-2012

2 This estimate was made based on discussions with market players; it is difficult to find reliable data on fertilizer use in Liberia.

0

1000

2000

3000

4000

5000

6000

7000

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Available data for 2011 and 2012 has to be treated with caution for two reasons: (1) due to the

inconsistent tax regime structures, importers are wary of the tax implications when providing

information on quantities traded; and (2) getting reliable national estimates of fertilizer

consumption is difficult due to some cross-border trade, most of which is undetermined because

the flow follows unofficial channels/routes.

7.0EstimatingFertilizerRequirementsto

MeetAgriculturalGrowthTargets

In this section, we estimate quantities of fertilizer required to meet the agricultural production

targets in the NAIP. The estimation process follows a two-step procedure. First, we analyze the

gap between the current and target production levels (Table 2). This gives an indication of the

incremental production from increasing fertilizer use. The next stage estimates the fertilizer

needs that will generate this increase in production (discussed in the next section).

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Table 2. Yield and Production Gaps Based on NAIP Targets

Major Crops Area

Yield Total Production

Current NAIP Target Current NAIP Target

Gap (NAIP

Less Current) (‘000 ha) (mt/ha) (‘000 mt)

Maize 6 3.3 4.5 21 28 7 Rice, paddy 212 1.3 1.7 271 363 92 Cassava 71 7.2 9.6 512 685 173 Sweet potato 2 9.8 13.1 20 27 7 Beans 6 0.7 0.9 4 5 1 Soya 8 0.4 0.5 3 4 1 Groundnuts 8 0.7 0.9 5 7 2 Bananas 11 10.9 14.5 122 164 41 Plantains 20 2.3 3.1 46 62 16 Coffee 8 0.2 0.3 2 3 1 Yam 2 8.5 11.4 20 27 7 Taro 3 8.5 11.4 27 36 9 Pineapple 1 5.6 7.5 8 11 3 Sugarcane 26 10.2 13.6 264 353 89

Totals 385 1,326 1,774 448 Source: Various MoA reports, FAOSTAT and authors’ calculations. Note that the yield and production estimates are based on averages over several years (2006-2012).

The crops included in Table 2 represent 70 percent of the total planted area and were selected

based on available data. Assuming no significant change in cultivated area over this period,

production would have to increase by 34 percent to meet the 2017 targets, which implies an

incremental production of more than 448,000 mt of produce.

The second step after quantifying the gap in crop production is to construct estimates of nutrients

required to meet this gap based on crop nutrient removal rates. This method estimates fertilizer

requirements based on nutrients removed by harvested crops, adjusted to reflect fertilizer use

efficiency. Nutrient levels contained in the incremental harvested crops were estimated and

adjusted using efficiency factors for N, P and K. The approach assumes good management

practices on the part of farmers and that fertilizer application is for maintaining soil fertility

levels rather than building them.

18

Table 3 shows the results from this approach. The analysis indicates that incremental nutrient

removal associated with the increased output of targeted crops would total 5,400 mt of nutrients

(2,100 mt N, 900 mt P2O5 and 2,400 mt K2O).

Table 3. Using Nutrient Removal Factors to Estimate Fertilizer Requirements

Key Crops

2012-17 Incremental Production

Nutrient Removal Total Incremental Nutrient Removal N P2O5 K2O

(‘000 mt) (‘000 mt) (‘000 mt nutrient) Maize 7 0.10 0.04 0.03 0.17 Rice, paddy 92 1.13 0.53 0.44 2.10 Cassava 173 0.20 0.07 0.26 0.52 Sweet Potato 7 0.04 0.02 0.07 0.12 Beans 1 0.05 0.01 0.02 0.08 Soya 1 0.06 0.01 0.02 0.09 Groundnuts 2 0.07 0.01 0.01 0.09 Bananas 41 0.25 0.06 0.96 1.26 Plantains 16 0.09 0.02 0.36 0.48 Coffee 1 0.03 0.00 0.03 0.06 Yam 7 0.01 0.00 0.01 0.02 Taro 9 0.01 0.00 0.01 0.03 Pineapple 3 0.00 0.00 0.00 0.01 Sugarcane 89 0.09 0.06 0.16 0.30

Totals 448 2.1 0.8 2.4 5.4 Source: Data from MoA and FAOSTAT and authors’ calculations using representative nutrient removal factors.

Table 4 below is derived from Table 3 by adjusting nutrient removal for fertilizer use efficiency

factors and then expressing them as metric tons of fertilizer products. In this analysis, we use

efficiency factors of 50, 35 and 70 percent for N, P and K, respectively. Therefore, based on

these factors, for the crops to remove 5,400 mt of nutrients as shown in Table 3, the

corresponding total incremental quantity of nutrient needed to be applied to the targeted crops is

approximately 10,000 mt, which is equivalent to 19,000 mt of urea, diammonium phosphate

(DAP) and potash (Table 4). The corresponding estimates when we account for all crops (those

in Table 2 and including others not included in table) are 13,000 mt and 25,000 mt, respectively.

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Table 4. Incremental Nutrient and Product Requirements

Crop Categories Nutrient Product (mt x 103)

a. Crops in Table 2 10 19 b. All Crops (Table 2 plus other crops not shown on table) 13 25

Sources: Authors’ estimates based on nutrient removal factors. The nutrients are converted to the equivalent tons of urea, DAP and MOP products.

The estimated additional amount of fertilizer nutrients necessary to meet the NAIP 2017

agricultural production targets will require a gradual increase in consumption of 13,000 mt of

nutrients, which is equivalent to about 25,000 mt of fertilizer product (urea, DAP and MOP).

Incorporating the current consumption of about 3,000 mt brings this to nearly 28,000 mt of

fertilizer products, more than nine times the current fertilizer consumption in Liberia.

8.0KeyChallengesinFertilizerValueChainsandRecommendations

8.1DealingwithChallengesinValueChainstoMeetAgriculturalGrowthTargets

In the following sections, we discuss the challenges across the fertilizer value chain and possible

responses to mitigate them so that fertilizer consumption can increase to meet the agricultural

sector goals. Although agriculture is the largest rural employer in the country with a significant

contribution to GDP, small-scale farmers are among the poorest in Liberia. Agriculture faces a

number of challenges, including inadequate infrastructure and poor extension and access to input

and output markets.

8.1.1RegulatoryFramework

The fertilizer sector in Liberia is at a nascent stage consisting of low amounts of fertilizers;

limited application, especially for food crops; and reliance on NGOs, government and

development partners for free fertilizers for the smallholder subsector. It is therefore important to

enact policies that make it easy for businesses to enter the fertilizer market and improve access to

relevant technology by farmers. There is no legal and regulatory framework or institutions for a

favorable environment for private investment. The movement of fertilizers across borders from

20

neighboring states brings competition but with the added risk of quality, since the regulatory

framework is nonexistent due to limited capacity for enforcement. This, coupled with the limited

human and capital capacity by MoA and other institutions, has the potential of discouraging use

if quality is compromised.

8.1.2UncertaintyinStateMarketInterventions

In 2007, the President of Liberia issued an annually renewable Executive Order to remove tariffs

on agricultural inputs, including equipment, to reduce cost and ensure the accessibility to these

essential inputs. The last annual Executive Order expired in April 2013, and the new tax regime

is yet to be announced. This implies that private fertilizer importers are now paying import taxes,

currently levied at 9.5 percent and comprised of value-added tax (VAT) – 7 percent, ECOWAS –

1 percent and State – 1.5 percent.3 When importers include other implicit costs, such as port

taxes, these reflect a significant portion of CIF cost adding to the farm-gate prices. The delay in

zero-rating these levies is causing business uncertainty and therefore reducing imports and

raising costs further.

8.1.3AccesstoCredit

Limited access to credit and relatively high interest rates of 18-20 percent hit farmers the most

since they do not have linkages to relatively cheaper foreign sources of finance and so rely on

domestic borrowing. In this regard, accessibility to fertilizer may be enhanced by repackaging

50-kg bags of fertilizer to smaller packs that resource-poor farmers can afford. Demand is

exacerbated by credit constraints, inappropriate packs and limited market access.

Low adoption of improved technology, poor knowledge of agronomic practices by farmers and

limited extension advice have an impact on rural demand for fertilizers. Extension is limited in

its top-down approach, and recommendations are not up to date since there is poor linkage with

research and dissemination of new technologies. Poor storage and road infrastructure raises the

prices in rural areas, making it difficult for farmers to access markets, cutting off some remote

areas and raising food insecurity.

3 These rates come from interviews with importers in Liberia.

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9.0ConclusionandSuggestions

Though fertilizer use is an important ingredient in raising agricultural productivity, its use is low

in Liberia. A number of challenges inhibit increased consumption of fertilizer: lack of legal and

regulatory framework to encourage investments, poor business environment, and lack of

measures to raise demand at the farm level. In order to assist organizations and policymakers to

implement actions that will increase agricultural productivity, it is important to provide an

estimate of the amount of fertilizer required to achieve GoL objectives.

The following are suggestions toward developing the fertilizer sector to raise agricultural

production in the country:

Creation of a favorable environment (policies, laws and regulations) for fertilizer business to

develop and provide access to smallholder farmers. The key to this process is to reduce or

eliminate subsidized or free handout fertilizer to farmers and replace it with a more

sustainable system where farmers can have access to quality and appropriate fertilizers.

Inclusion of all stakeholders (importers, distributors, retailers and farmers) in the

development of the fertilizer policy that is underway and focusing on reducing markets

distortions. Sensitizing market players and support institutions on the ECOWAS regulations

on trade and quality control (truth in labeling) is necessary.

Reduction or elimination of tariffs on fertilizer imports in consultation with market players.

Envisioning mechanisms to stimulate fertilizer demand by promoting innovative farming

practices/technologies, making farmers aware of those technologies and linking farmers to

markets. Central to this process is strengthening research and extension services by agro-

dealer training, farmer demonstration fields, the ISFM approach and encouraging irrigation

infrastructure, where possible.

Identifying key crops where fertilizer use will have highest impact and promoting its use.

Engaging with policy makers on ways to improve the efficiency of the value chain. A

detailed cost buildup will identify the challenges to be tackled.

Continuing efforts to introduce efficient and profitable improved production technologies

that are chiefly based on ISFM, including combined use of fertilizers and organics in the

22

uplands and urea deep placement (UDP) to improve nitrogen use efficiency in irrigated rice

production.

23

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