The objective of the study was to examine the procedures used to set up the subsidy
prices and evaluate the prices and quantity allocations given to distributors in order
to measure their impact on the financial performances of the distributors. Two
fertilizer trading companies, MIs Tanzania Fertilizer Company Ltd and MIs Premium
Agro Chern Ltd were taken as case studies. The data were analysed qualitatively and
quantitatively using tables, ratios and trend analysis. Excel computer program was
used to analyse the data and illustrating them by using figures and graphs. The
findings indicated that the distributors' businesses will not realise profits and attain
growth unless the subsidy prices set by the government are equal or higher than their
commercial prices, and that the quantities allocated to them are equal to their
budgeted sales volumes or are above their break-even volumes. The researcher
recommends a review of the current price setting procedures and quantity allocation
criteria to improve the distributors' financial performances and to achieve the
government objective of the scheme. The researcher also recommends a country
importation schedule, standards for subsidy fertilizer distributors and having own
fertilizer plant. While the policy of subsidizing fertilizers to our farmers is good for
the country's food security programmes and increase in foreign exchange earnings,
the recommended measures would streamline the administration of the scheme,
ensure reliability in fertilizer supplies, provide feedback and facilitate policy
analysis
