Yara pulls out of govt fertiliser subsidy
A leading fertiliser distributor in the country, Yara Ghana Ltd, has pulled out of the government’s fertiliser subsidy programme for this year.
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According to the company, its products would only be available in the open market to enable farmers, who have just started planting for the season, to get access to the product in any quantity.
Assurance
The Managing Director of Yara Ghana, Mr Jorgen C. Arentz Rostrup, told the Daily Graphic in an interview that in line with its commitment to farmers, the company would maintain its extensive import programme for the year and also ensure that the product was available in the market at all times.
He added that Yara would also assign its agronomists to work closely with the farmers to ensure high yield and quality. The company has agronomists positioned across the country, particularly in cereal producing areas.
Decision
The director said its decision not to be part of this year’s fertiliser subsidy programme was because the government and the suppliers could not align their interests and agree on how the programme should be conducted this year. However, to help farmers in their activities as the planting season commenced, it was important for the company to communicate its decision to them as early as possible.
“We are pleased to keep on offering farmers our products as the main fertiliser application season begins. Our products are now available in the open market only just as we have done in the previous years,” Mr Rostrup added.
The MD further stated that the company, which currently supplies the bulk of the country’s fertiliser needs, would support farmers attain good yields through technical support systems and “our fertiliser application training programmes that we offer nationwide.”
Dep. Agric Minister
But the Deputy Minister of Food and Agriculture in charge of Crops, Dr Ahmed Yakubu Alhassan, told the Daily Graphic that the ministry was not aware of Yara’s decision.
He said, however, that a about six companies had been invited to be part of the programme and the pull out of one would not affect the programme.
Dr Alhassan was surprised at Yara’s decision because he said selecting the input supliers went through a rigorous process after which the supply contracts were awarded and therefore found it strange that an input supplier would decide to pull out at this stage.
Subsidy programme
Under the government fertiliser subsidies programme which started in 2008, farmers paid only half of the cost of the input, as the government absorbed 50 per cent of the cost. More than 300,000 farmers benefitted from about 180,000 tonnes of subsidised fertiliser under the programme last year.
This year, the government plans to do the same quantity under the receipt system, where the participating companies distribute the input to farmers and later present the issue receipts for the other cost of the input which the subsidy covers.
However, over time, the government has not been able to meet its financial obligations to participating input (fertiliser) suppliers such as Yara. At the end of 2013, the government owed suppliers GH¢64 million and therefore could not implement the programme last year.
Without any hope in sight that the government would be able to meet its outstanding obligations, the input suppliers have again pulled out of their participation in the programme for 2015 and are rather turning to the open market.
Checks by the Daily Graphic indicate that this year the government plans to invest
GH¢90 million in fertiliser and input subsidies. Part of the challenge is due to the holding back of donor funding for the programme because the government was not meeting some macroeconomic targets.
Last year, there was no single subsidised fertiliser on the market and Yara’s decision to sell fertiliser on the open market meant farmers would have to absorb the entire cost of the input themselves.