A new World Bank report has revealed that Kenya’s centrally managed fertiliser subsidy programme contributed to the loss of about 200,000 jobs across the agricultural supply chain. The findings raise concerns about the unintended effects of reforms introduced under President William Ruto’s administration, particularly on employment and access to farm inputs.
According to the report, most of the job losses occurred during the implementation of the second National Fertiliser Subsidy Programme (NFSP-2). The initiative shifted fertiliser importation and distribution from a market-driven model to a government-controlled system. Under the revised approach, the state partnered with a limited number of importers, significantly reducing the role of private agro-dealers who previously formed the backbone of last-mile distribution.
The World Bank noted that thousands of small-scale agro-dealers, especially in rural areas, were pushed out of business. These dealers had played a critical role in delivering fertiliser to farmers in remote regions. By centralising sales through state-linked outlets and authorised vendors, the programme narrowed distribution channels and weakened private sector participation.
Under NFSP-2, contracted importers were required to supply specified fertiliser types at fixed, subsidised prices. In return, the government compensated them for each bag sold. This marked a major departure from the earlier subsidy framework, which allowed private firms to import fertiliser freely, set prices based on market conditions, and distribute products through widespread retail networks. Previously, targeted farmers also received vouchers to support purchases.
Beyond job losses, the World Bank warned that the new system made it harder for farmers to access subsidised fertiliser. Many farmers were forced to travel longer distances to reach approved outlets, increasing transport costs and reducing timely access to inputs during critical planting periods.
