No subsidy on fertiliser
The fate of the Fertiliser Subsidy Programme (FSP) initiated by the government in 2008 to help farmers increase the rate of fertiliser application on the farm to increase yield now hangs in a balance.
As of half year 2014, there is no single subsidised fertiliser on the market; a situation stakeholders say is gravely affecting crop farmers, particularly those in the Upper East and Upper West regions of the country.
Already, the planting season is over in most of the areas where the fertilisers were badly needed, especially for maize and rice production.
The Programme Officer of the Peasant Farmers Association of Ghana (PFAG), Mr Charles Kwowe Nyaaba, told the GRAPHIC BUSINESS in Accra that if the subsidised fertiliser should come, farmers might buy and hoard for next year because the application season was gone.
He appealed to the government to approach the issue with all the urgency it deserved and make subsidised fertiliser available at affordable prices as early as possible.
“If it should come it won’t be of use to those who are doing rain-fed farming except those on irrigation which is around two per cent. It is indeed a worry to the farmers,” he said.
Implications of non-availability
According to Mr Nyaaba, the subsidies enabled farmers to purchase NPK fertiliser bag for GH¢51 per 50kg bag last year, but it’s now being purchased for GH¢110 in the open market.
He said Sulphate of Ammonia for top dressing went for GH¢47 last year under subsidy but was now selling between GH¢85 and GH¢90 in the open market.
“Even with the increased prices, farmers hardly get it. Personally, I deposited the money with the distributor for Sulphate of Ammonia and it took two weeks before she was able to get the quantities I needed,” he said.
He said most of the farmers were not ploughing because of the increase in fuel prices; since they could not get the fertiliser it will result in far less yield.
“The consequence of the situation would be the decrease in food production and increased cost of food prices as farmers would push the high cost of production to the consumer. We are also most likely to import to meet our needs and I am sure the implication of importing is known to all,” he said.
The Fertiliser Subsidy Programme (FSP)
According to the budget statement for 2014, a total of GH¢226.3 million had been allocated for this sector. About GH¢214.9 million of this allocation, representing 94.5 per cent, was to be spent on poverty-focused agriculture.
These include spending on coastal fishing harbours and landing sites, fisheries and aquaculture infrastructure, the Fertiliser Subsidy programme and the Agricultural Mechanisation Service Centres, among other things.
Under the fertiliser and seed subsidy programme in 2012, 300,000 farmers benefitted from 170,000 metric tonnes of fertiliser and 20,000 kg of improved seeds of maize, rice and soyabean.
The Ministry of Agriculture
In a recent interview, a Deputy Minister for Food and Agriculture in charge of crops, Dr Ahmed Yakubu Alhassan, said the government could not cancel the FSP without consulting all the other stakeholders before the programme begun.
He said there was no such policy decision to withdraw the programme.
Rather, he said, the challenge had to do with the fact that the programme was based on warehouse receipts financing system.
Warehouse receipts (WRs) are issued as evidence that specified commodities of stated quantity and quality have been deposited at particular locations by named depositors.
He said: “Since there were arrears to be cleared, it would be morally wrong to go to the same companies you owe to deliver, especially when these are not small sums.”
“I want to assure the farmers that the ministry has finished all the necessary work with same companies and also following up at the Ministry Of Finance to get the resources to redeem the debt, and when we do that we can then do the 2014 programme,” he said.
The PFAG
The PFAG has said fertiliser was a key determinant of high crop yields. For that reason, as part of efforts to ensure the country becomes food secure, we should be interested in access of fertiliser by farmers.
It has, 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.
Since 2009, PFAG has been advocating around fertiliser subsidy. Indeed, there have been several policy discussions asking that the subsidy be maintained.
The PFAG has also asked for strict enforcement of the law against smuggling and punishment of persons caught trying to smuggle fertiliser outside the country.
GRAPHIC BUSINESS
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