How Kenya threw its farmers into the hands of a fertiliser monopoly

When the Kenya Bureau of Standards (Kebs) gazetted the levels of cadmium required for all the phosphate fertilisers entering the country on February 23, 2018, few people noted that the intention was to close the Kenyan market to only a single supplier, and illegally create a monopoly.

By a stroke of the pen, the multi-billion-shillings fertiliser trade in Kenya was left at the hands of a Saudi Arabia conglomerate, Maaden, which was publicly supporting the lowering of cadmium limit from 30 parts per million (ppm) to 15 ppm in order to lock out competition.

CONFLICT OF INTEREST

At the moment, only Maaden fertilisers meet the Kenya’s 15 ppm cadmium threshold — a move that has locked the Kenyan market from other major fertiliser suppliers. Questions have been raised on whether there was a conflict of interest since Henry Ogola, the chairman of the technical committee, that recommended the change of the standards, is the local agent for the Saudi Arabia suppliers.

Behind these numbers — and fight over cadmium standards — is a bigger battle that will directly affect local farmers who are in the dark on why they still pay more for fertiliser than the neighbouring countries.

During a meeting at Kebs on November 3, 2016, Maaden argued that the proposal to lower the limit “was the right approach to protect agriculture industry in Kenya” and said that 90 per cent of the cadmium in Africa came from phosphatic fertilisers.

Its main competitor, OCP Africa, advocated for the retention of cadmium levels at 30ppm “unless there is clear scientific evidence to establish that a lower limit is justified to protect health and Kenyan exports”.

Kebs minutes, now in our possession as fertiliser prices continue to rise, indicate that OCP said that “if the cadmium limit is reduced to 15 ppm as proposed all of its products will be totally excluded and the company will therefore be forced to relocate”.

While some fertiliser lobby groups have called for cleaner fertiliser — a euphemism to protect trade — The New York Times recently argued that “relationship between cadmium in fertiliser, cadmium in soil and cadmium in the human body is far less clear. Scientists cannot say how much cadmium in fertiliser is too much.”

TOO LOW

Cadmium occurs naturally in phosphate rock, though levels vary depending on where it is mined. While Russian and Saudi Arabia fertilisers have naturally low cadmium levels, north African phosphate producers, Tunisia and Moroccan have naturally higher levels. Morocco is particularly the global target of importers worldwide since it has the world’s largest deposits of phosphate rock.

Unlike in the European Union where similar efforts had been tried but without success, Kebs officials managed to stop the world’s largest phosphate producer, OCP of Morocco, and several other smaller suppliers from entering the Kenyan market by banning their products through a gazette notice.

This was despite a warning by One Acre Fund, during the same stakeholders meeting, which said: “The proposed new limit of 15 ppm for Cadmium is too low and greatly reduces the ability of many fertiliser companies with the largest reserves of phosphate to comply, which may have a great effect on fertiliser prices and reduced market competition due to limited sources that have low cadmium levels.”

For its part, ICRAF, an international scientific organisation, called for a “thorough review” of the available data worldwide. Records indicate that since most stakeholders did not agree with Kebs and Maaden — which were for lowering of the cap limit, the meeting resolved to “defer the revisions of the limits until all the concerns have been addressed.”

UNTOLD STORY

It was also agreed that Kebs would find out where there have been reported cases of cadmium contamination and report to the committee.

When a follow-up meeting was held on March 21, 2017 at Kebs, Mr Ogola — who is the chair of Fertiliser and Soil Conditioners Technical Committee — asked the secretariat to report on the progress.

One case involving Delmonte farms was discussed, and it was found that a consignment that had been denied entry into the EU was as a result of Zin Sulphate fertiliser imported from China.

“While noting the reservations of some members particularly OCP, it was agreed that the standard proceed to the next stage,” the minutes indicate.

While the “committee noted that limits set in the standard should be based on scientifically based information” it said the reservations of members “particularly OCP” and agreed to move to the next stage which was to allow the members to individually vote on the kind of standard they want.

Through e-mails sent on April 17 by Kebs official Mugambi Michubu, the 14 members were sent ballot papers to approve what was known as KS 157-MAP/DAP fertiliser specification.

On April 21, the technical committee chairman, Mr Ogola, asked them to vote “judiciously without fear or favour and with the paramount and overriding consideration being Kenya’s and Kenya’s people’s interests.”

But the untold story was that the voting for a new standard was to lock out competitors from the market and leave it to only one big conglomerate, as voiced in an earlier meeting.

After the voting, the new standard was approved by representatives from KARLO, Osho Chemicals, YARA East Africa, Kenya Tea Development Agency, Government Chemist and Chemagro. Those who rejected were OCP, KEL Chemicals, Amiran, KEPHIS, MEA, State Department of Agriculture, Toyota Tshusho and Elgon chemicals.

While most of the technical committee members were opposed to the new standard, the matter was supposed to be referred to Standards Project Committee for further action.

But as the deliberations were taking place, articles started appearing in the local press accusing Kebs of bowing to pressure to allow “import of killer fertiliser” which can cause lung and kidney failure. It accused Kebs technical committee of reviewing the Cadmium cap from 7 ppm to 30 ppm in 2015 and for bowing to pressure from “greedy importers.” It accused some members of the committee of being corrupted by the importers to raise the bar.

Whether the media articles related to the impending balloting on the cap on cadmium is not clear but a meeting held on July 18, 2017, a week after stories of the “killer fertiliser” appeared in the local press, was told that the balloting for a new standard had failed after eight members opposed the move against six. An approval required a two-thirds majority.

Some members dismissed the articles as “misleading” and agreed that it “generally portrayed the committee in bad light.”

“The secretary informed the committee that since the standard did not meet the threshold to proceed for approval it has to be brought back to the technical committee for further discussions,” the minutes show.

With the failure of the technical committee to agree on the levels required for cadmium, the committee formed a five-man working group to determine whether access to fertiliser will be curtailed if the proposed cadmium levels were implemented.

The subcommittee reported that Saudi Arabia accounted for the biggest bulk of DAP fertiliser imported into Kenya and which translates to two-thirds of the total DAP fertiliser. Morocco was second, accounting for 20 per cent of the imports followed by Russia at 10 per cent.

15 PPM LIMIT

The committee reported that the major source of DAP fertiliser complies with the proposed 15 ppm limits of cadmium and that there was no evidence that local farmers would suffer if the levels were dropped.

It was this subcommittee of five people that asked the technical committee to adopt 15 ppm limit for cadmium.

During the discussion, some members asked manufacturers not to “see limits as a barrier to trade but rather as a chance to innovate and achieve the desired goals.”

It was the same argument that had been taken by Russian conglomerates when they were pushing the EU to block North Africa from trading with Europe.

The battle for the Kenyan market was now being fought between Saudi Arabia and Morocco and in October 2017, the then Cabinet Secretary for Agriculture Willy Bett was briefed by OCP on the decision that was being undertaken to lock them out of the country.

While the minutes of a meeting held at Kebs offices on October 10, 2017 said the “decision was not targeted at any individual manufacturer or importer” it was the Kenyan farmers who were to miss out if a major fertiliser importer was locked out.

SINGLE TRADER

During the vote to adopt the recommendations of the subcommittee, OCP Kenya voted against and wrote a letter dated October 23, 2017 to then Managing Director of Kebs Charles Ongwae. It was a reminder that during a meeting held on October 11, 2017 at the Ministry of Industry and Trade, it was agreed that the matter shall be put on hold.

In the letter, OCP Kenya also accused the chairman of the technical committee on fertilisers of being an agent for Maaden which is “attempting to create a technical trade barrier through change of standards.”

A report that was filed by the technical committee for the change of standards indicates that reference was made to EU cadmium limits and Food and Agriculture Organisation mineral fertiliser specifications for 2012. But in January this year the EU adopted a cap of 60 ppm to give its farmers an opportunity to source its fertiliser from various traders while Kenya adopted 15 ppm which restricted the competition.

And with that a small technical committee threw a multibillion trade into the hands of a single trader.