Fertiliser subsidy under threat
The sustainability of the Fertiliser Subsidy Programme (FSP) initiated in 2008 to help farmers increase fertiliser usage and productivity is under threat following uncertainties about financing if the current World Bank support for the programme dries up.
Advertisement
With the support of the World Bank, the government has steadily increased subsidies on fertilisers from a little over 43,000 tonnes at GH¢20 million in 2008 to 173,000 tonnes at GH¢117 million in 2012. A total of 180,000 tonnes is expected to be subsidised this year for farmers.
Although the volumes of fertiliser seem to be rising by the year, they are still insufficient, as more people go into farming with existing farmers using more fertiliser.
The Ministry of Food and Agriculture, which is responsible for the implementation, however, does not have its entire budget request to ensure that the fertiliser subsidies are carried out fully.
This is mainly because the dedicated donor funds had not been disbursed, leaving the cost for the whole of last year’s subsidies in arrears.
Only 39 per cent of the MoFA’s budget was approved in the 2013 budget, thus making it difficult to undertake certain programmes, thus, the budget deficit the government runs has led to perennial shortage of subsidised fertiliser and this is gravely affecting food crop farmers, particularly those in the Upper East and Upper West regions of Ghana, according to the Peasant Farmers Association of Ghana (PFAG).
To compound issues, a World Bank facility under which the FSP is being funded would soon end and calls are being made for alternative funding. The bank has announced a shift in focus of its funding for the government. Each programme funding would be results-based and the World Bank would therefore conduct a sector review before committing funds. The next review is expected next year.
The Deputy Director in charge of Budget at the Ministry of Food and Agriculture, Mr Daniel Ohemeng Boateng, said fertiliser suppliers had not been paid since last year and this may be impacting on supply.
“We want government to set aside a separate fund to manage the FSP if it is to be sustained,” he said at a two-day advocacy programme on the 2013 budget statement and the expectations for 2014 in Accra.
The Institute of Financial and Economic Journalists (IFEJ) organised the forum with support from STAR Ghana, an advocacy grant organisation. It was to afford civil society organisations, stakeholders and the media the opportunity to provide inputs in addressing Ghana’s economic challenges assess the government’s adopted approach in managing challenges and offer suggestions on the way forward for the 2014 fiscal year.
The President of the National Farmers Award Winners Association, Mr Philip Abayori, said if the fertiliser subsidy was having the desired impact then food should have been cheaper, but the situation on the ground was different.
The deviation, he said, could be as a result of poor targeting of the subsidy, as they subsidised products either fell in wrong hands or persons colluded with suppliers to divert the product.
Mr Abayori reiterated calls for the inclusion of farmers who are the targeted beneficiaries of the programme, saying it was unimaginable for policy makers to make and implement policies without consulting the targeted beneficiaries.
“Though there is the FSP, farmers have never attended any meeting on it. Why are we farmers not on the FSP committee. We only hear and buy from suppliers,” he said.
The PFAG has said fertiliser was a key determinant of high crop yields, for that reason, as part of efforts to ensure the country became food secure, farmers’ access to fertilisers should be of interest to all.
It had on several platforms called for certain taxes to be dedicated to improving agricultural productivity, particularly the FSP.
The association said the areas to tax should include three per cent of bank’s profit; a percentage of Value Added Tax (VAT), Communications Services Tax, contributions from lottery revenue and a percentage of oil and gas revenue.
The Programme Coordinator, Ms Victoria Adongo told the GRAPHIC BUSINES in a separate interview that the farmers found it difficult to plant at the appropriate time and complained bitterly.
Due to the artificial shortage by some dealers the subsidised product could sell at a higher price of GH¢60 instead of about GH¢51, whereas in the open market unsubsidised fertiliser such as NPK sells between GH¢68 and GH¢70.
Smuggling across our borders also contributes to the shortage because our neighbours do not subsidise fertiliser and so these unpatriotic citizens get better money from their activities.
This came to light when STAR Ghana sponsored some IFEJ-member journalists to ascertain the impact of budget statements and implementation on communities in the hinterland.
The PFAG has also asked for strict enforcement of the law against smuggling and punishment for persons caught trying to smuggle fertiliser outside the country.
In the 2013 Budget Statement and Economic Policy, the continuous introduction of technology to improve agricultural production remained the main focus of government policy interventions.
These interventions include the adoption of livestock production technologies, agricultural mechanisation, irrigation development, fertiliser subsidy, seed improvement, quality standardisation, and the implementation of modern buffer stock management techniques.
Under the fertiliser and seed subsidy programme in 2012, 300, 000 farmers benefitted from 170,000 metric tonnes (mt) of fertiliser and 20, 000 kg of improved seeds of maize, rice and soyabean.
According to the budget, for the 2013 financial year, the Ministry of Agriculture will continue with its mandate to implement programmes and projects in the Medium Term Agricultural Sector Investment Plan (METASIP).
It said government would also coordinate the procurement and distribution of In addition to the 180, 000 tonnes of subsidised fertiliser expected to be distributed to farmers this year, MoFA also plans to launch a web-based software for the smooth implementation and management of the subsidy. GB
By Ama Amankwah Baafi / Graphic Business / Ghana
Writer’s email: [email protected]
