Duty Waiver to help attract critical, missing investment for Liberia’s agricultural industry

At the start of 2018, farmers paid on average USD 50 for a 50kg bag of NPK 15:15:15 – the most commonly used fertilizer in Liberia. The same bag of fertilizer cost USD 34 next door in Sierra Leone.

One big reason for the cost difference? The high tax levy on agricultural inputs.

With taxes as high as 24.5% on imported fertilizers, seeds, and agro-chemicals, the additional cost passed onto farmers rendered agro-inputs unaffordable. Simply put, distributors and suppliers could not afford to invest to bring product directly into port in Liberia because farmers would not be able to purchase these products.

In absence of distributors, small agro-dealers traveled to Guinea or Ivory Coast to purchase products in piecemeal fashion. The cost of transporting product in shared lorries combined with limited working capital and no credit meant that dealers purchased product in smaller quantities, at higher prices – with farmers paying high retail rates.

Executive Order 97 changed all of this by offering a zero tax option for inputs and equipment imported for agricultural use (excluding 1.5% customs fee and 0.5% ECOWAS fee) – effectively encouraging larger orders, imported directly to Liberia via shipping ports.

Larger orders shipped via low cost transport with low fees result in lower product prices for farmers.

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