International Journal of Scientific Research and Management (IJSRM) ||Volume||07||Issue||06||Pages||AH-2019-230-243||2019|| Website: www.ijsrm.in ISSN (e): 2321-3418 DOI: 10.18535/ijsrm/v7i6.ah01 Dr. Francis Mwaijande, IJSRM Volume 07 Issue 06 June 2019 [www.ijsrm.in] AH-2019-230 Reducing Fertilizer Cost Build-up in Tanzania:Policy options for increasing smallholder farmers’ access Dr. Francis Mwaijande P.O. Box 20266 Dar Es Salaam, Tanzania Abstract Fertilizer price cost build up in Tanzania limits 96.5% of the smallholder farmers access to fertilizer that deter agricultural productivity and the goal for attaining food security. The objective of the paper was to examine strategies for addressing fertilizer price build up in Tanzania that would increase fertilizer use and create demand by smallholder farmers. We use secondary data from the reviewed literature on factors for price build up in Tanzania. The study adopts the supply chain analysis from the source of origin, importation, shipping costs, port service charges, quantity procured, methods of procurement, blending and packaging, as well as means of transportation used. The key determinants in the chain include the Cost, Insurance and Freight (CIF), port charges, port handling costs, bagging, storage fees and means of transportation. The most two significant drivers for the fertilizer price build up is the procurement method and means of transportation that seem to significantly increase farm gate prices. It has been established that price build up is a function of quantity imported due to economies of scale; that is to say importing small quantities pushes buyers to pay high prices for the product and shipping expenses. The infrastructural factors for fertilizer price build up are associated with the mode of transportation as either road haulage or railways use. It has been established that transporting bulky fertilizers to various destinations by road is more expensive when relatively compared with railway transportation. The paper, therefore recommends for policy change that emphasize bulky fertilizer transportation by railways and monitor its implementation. Key words: Strategies, policy options, fertilizer price build-up, increasing fertilizer use. Introduction The Ministry of Agriculture Food Security and Cooperatives (MAFC) commissioned a research on strategies for reducing fertilizer cost buildup to enhance demand and increase fertilizer use by smallholder farmers under AGRA supported project: “Promoting Enabling Soil Health Policy Environment in Tanzania”. Previous studies (Bumb, 2009; IFDC, 2012; Thapa, 2012) examined the cost distribution of fertilizer and found that about 35% of the fertilizer price is a result of transaction costs incurred from the port of entry along the supply chain through to the final consumer. Such high costs arise from inefficiencies in handling including port bagging, stitching, loading and off-loading at various transit points. Other studies (Match Maker Associates, 2007; Benson, et al.,2012) determined factors such as offloading delay at Dar es Salaam port hampered by poor port facilities and the charges paid by importers and found that they bring about additional costs that are ultimately shifted to farmers. Others argue that road transportation which is mainly used to transport fertilizers from Dar es Salaam to up country regions costs more than railway/sea transportation which were the main means in the past. Furthermore, inadequate fertilizer distribution points in the villages force farmers to travel to district headquarters to buy fertilizers resulting to overhead costs to farmers. Also in the list of drivers of fertilizer price build up, are high rates of inspection fees, making fertilizer prices in the country unaffordable by smallholder farmers. Based on existing research evidence on best practice from Africa and the rest of the World in dealing with fertilizer cost build-up, we develop strategies for reducing price build up in Tanzania and advocate for