A severe foreign currency shortage has led to a drastic drop in fertiliser shipments and distribution, exacerbating concerns over food security. The distribution plan faced considerable challenges due to the pervasive foreign currency shortage, prompting the Ministry of Agriculture officials to take urgent measures.

Only 477,526.5tns of the 1.3 million tons procured by the Ministry have been delivered and distributed to farmers, revealed a report submitted to the Agricultural Affairs Standing Committee of Parliament, chaired by Solomon Lale.

Under the leadership of Girma Amente, the Ministry planned to distribute the 2.2 million quintals of fertiliser left from the previous year and import 12.8 million quintals for the harvest year with a projected budget of one billion dollars.

Commercial banks in Ethiopia are required to allocate 15pc of their foreign currency reserves to items designated as a priority, such as agriculture inputs. Fertiliser, seeds, and pesticides fall into the second-priority category for foreign currency allocation. To import fertilisers, the Ministry opens letters of credit (LCs) through the state-owned Commercial Bank of Ethiopia (CBE). However, the number of LCs opened this year has fallen by half, with only 13 opened, compared to the Ministry’s initial plan of 24 by the end of the budget year.

Ministry officials have recently held discussions with bank executives to prioritise fertiliser inputs, according to Sofia Kassa, state minister for Agriculture. Solomon’s Standing Committee sought an explanation after learning that farmers faced input shortages and were forced to plant seeds without applying fertiliser. State Minister Kassa, however, dismissed the complaint, blaming a lack of specific numbers and locations to substantiate the claim.

A surprise inspection conducted by the Ministry discovered nearly 7,000qnts of fertiliser stockpiled in a warehouse in the Southern Regional State. Despite the State Minister’s dismissal of the complaints, various unions have expressed concerns about the ongoing shortage.

Walta Farmers Union, in the Amhara Regional State, oversees 32 cooperatives with nearly 20,000 smallholder farms under its umbrella. According to its Manager, Welde Teferi, the stock in their warehouse is insufficient to meet the farmers’ demand. He disclosed that up to 140,000qnts of fertiliser are required during the two harvest seasons, with a current deficit of half the 40,000qnts needed for the Belg season.

Teferi noted that demand fluctuates based on rainfall and weather conditions, but he has observed increased demand this season, particularly for maise cultivation.