Commit more resources to agric fertiliser subsidy - Research

A consortium of researchers has called on the government to commit more resources into fertiliser subsidy under the Planting for Food and Jobs (PFJ) programme, which has proven to be a game-changer in improving the welfare of households, creating more jobs and boosting economic growth.

The researchers also called for the fertiliser subsidy programme under the PFJ to be extended beyond its planned implementation period of 2017 to 2020 to at least 2024 for its real impact to be felt.

The Country Advisor to the Institute of Fiscal Studies (IFS), Dr Abdul Malik Iddrisu, who led the team of researchers, said in the face of resource constraints, the government should devise a mechanism to wean beneficiaries like the Nation Builders Corp NABCO off the PFJ programme to allow for the enrolment of new ones, otherwise financing was likely to put too much pressure on the public purse.

“The policy recommendation for the extension of the PFJ fertiliser programme will come at a cost to the government because if you are thinking about continuing the programme over the intended implementation period, you have to consider the fiscal implications,” he said.

Dr Iddrisu was sharing the findings of a research on the impact of the PFJ’s fertiliser subsidy programme on sectoral productivity and overall economic performance, unemployment and household welfare at the annual conference of the Partnership for Economic Policy (PEP) in Accra yesterday.

The research was conducted over a one-year period with technical and financial support from the PEP, an international research institution with more than 8,000 experts.

The other researchers were drawn from the University of Ghana; the University of Education, Winneba (UEW); the University of Yaounde, Cameroun and the University of Rouven, France.

Examining potential

Dr Iddrisu explained that the researchers analysed the fiscal allocations under the fertiliser subsidy programme in 2017 and the projections for 2018 to 2020, as well as the proposed four-year extension to the programme through projected allocations from 2021 to 2024.

He said the team then compared its results with those of NaBCo which was began in 2018 to draw conclusions on which of the policies had more impact on the welfare of households.

Positive outlook

Dr Iddrisu said the team found that the fertiliser subsidy programme would lead to an average increase in the annual crop productivity for maize, sorghum and rice by 29 per cent, 13 per cent and 21 per cent respectively between 2017 and 2024.

“The increase in average annual production levels for maize is 14 per cent; 11 per cent for sorghum and 15 per cent for rice, with other agriculture activities and food industries having two per cent and 14 per cent respectively,” he said.

He underscored the need for a programme to build the capacity of farmers on the correct application of fertilisers.

PFJ better alternative

In addition, Dr Iddrisu said the study also revealed that the PFJ fertiliser subsidy programme was more cost effective in improving the welfare of households than NaBCo.

He said the annual cost of implementing the PFJ fertiliser subsidy programme was GH¢460,626,245, “and this is around half of the cost subsidising NaBCo, which is GH¢814,657,200.

“We have access to the developmental outcomes of these two important policies and what we found is that in terms of contribution to household welfare, the PFJ fertiliser subsidy programme has a larger bite than NaBCo, “ he stated.

Positive sign

The Director, Policy Planning, Monitoring and Evaluation at the Ministry of Food and Agriculture (MoFA), Mrs Angela Mercy Dannson, said the findings by the researchers demonstrated that the PFJ had made the desired impact on farmers.

She said the ministry was looking at a favourable exit plan for beneficiaries of the PFJ fertiliser programme so that more people could benefit from the intervention.