To get to this guy, you defeat Neith the spider mini-boss who drops a dagger item. Follow the wall behind where Neith was (away from the boss room hall) and you'll walk behind a waterfall. The dagger lets you "cut open" some vines, revealing this NPC's room.
You can buy his axe to cut the egg open for loot (I received Manastone: HP +85).
The Special Fertilizer is a requirement for a quest, The Ripe Stuff, which doesn't seem to be anything special.