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May 17, 2008

African Development Bank creates fertilizer subsidy facility

The annual meeting of the governors of the African Development Bank (ADB), held in Maputo on May 14 and 15, approved the creation of an African Fertiliser Facility, that will make fertilizer available to African farmers at affordable prices.

The decision was not unanimous. The chairperson of the ADB Board of Governors, Mozambique's Planning and Development Minister Aiuba Cuereneia, told reporters that the United States was opposed to the fertilizer facility, "but the Board of Directors voted for it."

"We are now seeing international organisations talking about subsidizing agriculture", said Cuereneia. "This used to be taboo, but now it is being accepted. You can't manage agriculture commercially without subsidies."

At a closing press conference, the ADB President, Donald Kaberuka, noted that African agriculture used to suffer from low producer prices, and farmers had little incentive to produce. Now, with the sharp rise in grain prices internationally, there were incentives - but fertilizer prices had also soared.

"For the signals to reach the farmers, something has to be done", said Kaberuka. "There must be some degree of fertilizer subsidy." Such subsidies should be "market-smart" and targeted, and they would require support from international institutions.

He recognised that "fertilizers are not enough. If there is no road, you will produce tomatoes, but they will rot. For markets to operate, the infrastructures must be working - the roads and the irrigation system - this will prevent the crops from rotting before they reach market."

Kaberuka also insisted that gender issues must be factored into the approach to agriculture, "If we are to succeed, we must bias policy towards Africa's women farmers, who are the majority of the continent's farmers", he said. "Poverty has a woman's face."

"The time has come for African agriculture to become a viable business", he stressed, "and it is thus very important that we allow markets to function". He insisted that food security was not a problem that could be solved by protectionist measures, and so called on those countries that have imposed bans on grain exports "to allow the markets to work."

But they would not work by relying on the private sector alone, and Kaberuka repeated his call of the previous day "to rebuild Africa's Ministries of Agriculture", which were crucial for planning and coordination. But he insisted that the ADB had no intention of dictating how a green revolution in Africa should be run.

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