Recommendations for strengthening multistakeholder crisis response to mitigate fertilizer price spike impacts

A study by Dalberg evaluated Sustain Africa’s relevance, impact logic, partnerships and governance, and efficiency and also made recommendations on how to achieve even greater impact if a price spike in the future threatens food security in Sub-Saharan Africa. In particular, Dalberg provides recommendations for engaging a wider range of private sector partners, and also recommends a multistakeholder fertilizer accessibility and affordability monitor to alert stakeholders of a potential crisis

Read the full report here and the Executive Summary below

Executive Summary

Key findings

1. Dalberg found that Sustain Africa successfully responded to the crisis, providing timely fertilizer price relief to farmers when global prices were high.
2. Sustain Africa met most of its output targets and may have possibly contributed to food security, especially at the smallholder farmer level.
3. In some countries, the program accounted for a significant share of fertilizer supply to SHFs, which could account for sustained production. In Uganda and Madagascar, the program supply in 2023 accounted for 63% and 42% of average national fertilizer consumption, respectively, which indicates a significant contribution.
4. Additionally, the program bolstered agro-dealer resilience and implemented measures to avoid market distortions through: targeting smallholders via existing and pre-approved agro-dealers and using community based advisors (CBAs) to ensure fertilizer reached intended recipients; limiting the rebate amount to maximum of 35%; short timeline implementation and; limited volume of subsidy amounts – capping the number of fertilizer bags farmers could purchase.
5. Sustain Africa was cost-efficient, achieving a 1:1.1 funding ratio between development partners and the private sector. Early indications show that the program has spent USD 37.85 million, with an assumed reach of 11.4 million people in farming households (equivalent of USD 3.3 per beneficiary reached), which is lower than traditional food aid programs

Key recommendations

1. Set a trigger for intervention: e.g. if fertilizer Free on Board (FOB) prices increase past ~30%-50% and particularly where fertilizer price increases are not offset by farmgate prices
2. Implement an early warning system to detect signs of market volatility in the fertilizer and food sectors
3. Use data systemsg farmer registers where available to refine farmer targeting and for tracking.
4. Ensure outreach on programme inclusion to all suppliers including national suppliers to avoid market distortion
5. Continuously engage private sector suppliers pre-crisis to discuss potential contribution options: Dalberg suggestions a range of options
   1. Large suppliers could contribute 2-3% of their global production at subsidized prices, increasing their CSR budgets (suggestion of 0.3x- 0.5x of their historical CSR funding, or allocating 2.5%-7% of their African revenue to crisis response.
   2. Domestic blenders and suppliers, particularly large-scale ones, could contribute 1%-5% of their revenue. Given domestic suppliers have low margins, funding from development partners through a matching mechanism could be provided to supplement and incentivize these contributions.
6. Engage seed, crop protection products, and extension support providers more consistently to offer a comprehensive package to farmers
7. Consider two hosting options: (i) being hosted under a partner organization, with enforceable agreements between partners and the host responsible for monitoring the fertilizer market and reporting to a board, or (ii) establishing a standalone legal entity
8. Set up clear MEL methodologies and tools to ensure consistency in baseline and endline results and robustness of reporting.