Govt releases GH¢260.4m to pay fertiliser companies

BY: Nana Konadu Agyeman
Dr Owusu Afriyie Akoto — Agric Minister
Dr Owusu Afriyie Akoto — Agric Minister

The government has released GH¢260.4 million to settle the Ministry of Food and Agriculture’s (MoFA’s) indebtedness to 71 fertiliser companies to bolster the government’s flagship Planting for Food and Jobs (PFJ) programme.

The release of the funds formed part of MoFA’s efforts to address the shortage of subsidised fertiliser facing smallholder farmers in the country.

The sector Minister, Dr Owusu Afriyie Akoto, who disclosed this on the floor of Parliament yesterday, said: “The distribution of fertiliser, especially to the northern part of the country, has significantly improved following an emergency meeting between the suppliers and the ministry.”

He was responding to two urgent questions by two Members of Parliament (MPs) of the National Democratic Congress (NDC).

The MP for South Dayi, Mr Rockson-Nelson Dafeamekpor, had asked about the steps the ministry had taken to pay fertiliser suppliers to avert the acute shortage presently facing farmers in the country, while the MP for Bawku Central, Mr Mahama Ayariga, had sought to know why farmers could not access fertiliser under the fertiliser subsidy programme.

Contract agreements

Responding, the minister said in implementing the PFJ, MoFA signed a contract agreement with various fertiliser companies on September 30, 2020.

He said international prices of fertiliser increased significantly six months after the contracts had been signed.

As a result, he said, the impact of COVID-19 on global industries adversely affected the working capital of those fertiliser companies, rendering them incapable of importing adequate fertiliser for distribution.

Other factors that accounted for inadequate subsidised fertiliser for farmers were delays in the payment of fertiliser companies engaged for the PFJ in 2020, smuggling of the product and illegal cross-border trade in fertiliser between traders in Ghana and Burkina Faso, as well as neighbouring countries.

Moreover, he mentioned erratic rainfall patterns in the second quarter of 2021 in the 11 regions in the southern sector of the country.

Regional focus

Dr Akoto also answered a question by the NDC MP for Wa East, Mr Godfred Seidu Jasaw, who wanted to know the specific arrangements being put in place to supply agro-inputs (seeds, fertiliser, pesticides, weedicides) to farmers in the Wa East Constituency under the PFJ.

He said in November 2020, the ministry again signed contracts with 80 seed companies to supply various types of fertiliser and seeds under the PFJ campaign.

Prior to signing the contracts, he said, the ministry assessed the input requirements of the regions and shared the information with the regional departments of agriculture (RDAs), the district departments of agriculture (DDAs) and the companies contracted to distribute fertiliser and seeds to small-holder farmers across the country, he said.

“Following the implementation of the programme, the ministry has been monitoring the distribution of inputs at the district, regional and national levels to meet demand in relevant areas, including the Wa East District.

“To promptly address emergency issues, information gathered through monitoring visits is shared with the various stakeholders, including the fertiliser and seed companies, for necessary action,” he said.

With specific reference to the Wa East District, the minister said the district director of agriculture had been furnished with the contact details of all input suppliers under this year’s campaign to enable the department to alert the companies promptly and directly to address shortages.

“Mr Speaker, the ministry, through its monitoring team, is constantly in touch with the DDAs to ensure that fertiliser and seeds are available in all relevant constituencies, including Wa East,” he said.

Background

The Daily Graphic of July 16, 2021, reported that Dr Akoto has expressed worry about the sustainability of the PFJ due to a large debt owed partners of the programme.

According to the minister, importers of fertiliser under the PFJ were under siege by their financiers because out of GH¢940 million owed dealers in fertiliser and other subsidies since the beginning of last year, the government had been able to pay only GH¢250 million.

Describing the prospects of the flagship programme as “precarious”, the minister said as a result of the high indebtedness to the fertiliser producers and importers, they had defaulted with their banks and had to pay penalties on their letters of credit.