Foreign agrochemical manufacturers accessing the Ethiopian market through local agents must designate permanent representatives, demands a new rule the Ministry of Agriculture will soon introduce.

The directive the Ministry's experts are drafting will cause drastic changes in the roles agents and importers of agrochemicals have in the market. The authorities claim they want to break the concentration of import and distribution of agrochemicals such as pesticides and herbicides in the hands of a few agents, who are constrained in their capacity to meet growing demands.

"This has affected supply," said Hailu Mekia, an agrochemical expert at the Ministry.

Ethiopia imports 40,000tn of agrochemicals annually. Adami Tulu Chemical Company is the lone local manufacturer, incorporated in 1998 with a capital of 40.5 million Br. It produces 440tn of chemicals annually, nowhere near sufficient to meet demand. Less than half of the 18 million small-scale farmers in the country applied agrochemicals in the last Mehir season. The pesticide was used on less than a quarter of 22.8 million hectares of land farmed.

Officials are convinced the low volume is due to dependence on agents who act as intermediaries for manufacturers abroad. There are seven representatives of foreign manufacturers and 133 registered agrochemical importers. The directive will allow agents to remain in the market as distributors, after receiving the chemicals imported through the permanent representatives.

Nonetheless, the proposed rules have drawn criticisms.

Replacing the agents is not the right move for the industry, says Fasil Tadesse, general manager of CropLife Ethiopia Agrochemical Association. The issue is not the agents' and importers' capacity, says Fasil.

"It's the shortage of foreign currency that limits the volume of agrochemicals they import,” he said.

Established in 1998 by six pesticide importers, the Association comprises seven representing multinational manufacturers and 22 importers. Agents and importers must register the products they import for local distributions.

Bayer, a German chemical manufacturer, has been active in the Ethiopian market since the late 1960s.

Yohannes Zekarias, a regulatory and field agronomy specialist at Bayer's Ethiopia office, says only a few manufacturers are willing to open representation offices in Ethiopia.

“They don't want to incur the cost only to sell a small quantity of their products,” he said.

According to industry insiders, it can cost 100,000 dollars a year to run a representative office in Ethiopia.

Fasil argues that the draft directive does not correspond to the proclamation governing the agrochemical market, which allows manufacturers represented by agents. However, the laws governing the registration and control of pesticides require companies not residing in Ethiopia to have an agent. A manager at a prominent agent challenges the Ministry for having no authority to introduce a directive before the government legislates a regulation and sets registration and quality assurance requirements.

The Ministry of Agriculture had tried to introduce a regulation seven years ago.

“We faced some legal issues that needed to be addressed,” said Hailu. “We decided to postpone and work on the directive.”