Fertilizer subsidy to agriculture needs to be maintained - Research

A new research finding has recommended that Ghana’s fertilizer subsidy programme under the Planting for Food and Jobs (PFJ) be extended beyond its planned implementation period of 2017 to 2020 to help in sustaining food security.

The study revealed that the fertilizer subsidy programme should be continued to at least 2024 since it has the potential of boosting Gross Domestic Product, increase crop production, enhance household welfare and reduce unemployment.

However, the Government should devise a mechanism to wean beneficiaries off the PFJ programme to allow the enrolment for new ones, otherwise financing was likely to put too much pressure on the public purse.

Meanwhile, the findings also indicated that during the 2017 to 2019 period the GDP growth rate increased by 0.16 percentage points annually on average, while unemployment was reduced, especially among skilled labour in rural areas, and among those engaged in non-agricultural activities.

There was a drop in prices of agricultural products and processed food, increased household welfare and consumption expenditure, as well as increased exports of priority crops including maize, rice and sorghum.

The findings of the research were presented to stakeholders in the agriculture value-chain on Wednesday at a National Policy Conference held in Accra.

Dr Abdul Malik Iddrisu, Country Adviser, in charge of the Centre for Tax Analysis in Developing countries, Institute for Fiscal Studies (IFS), who led a team of researchers to undertake the study, said it set to find out “How the fertilizer subsidy programme can boost economic growth and employment in Ghana”.

Giving a background to the PFJ, he said it was introduced by the government to promote productivity and create jobs in the agricultural sector.

He said the PFJ was to encourage farmers to adopt new technologies such as improved seeds and fertilizers by providing incentives and appropriate training, as well as improved access to markets through the use of Information and Communication Technology.

Dr Iddrisu noted that the cost of the programme was estimated at the GH¢3,300,721,266 (US$ 717,548,101) and organised around five pillars namely: Seed access and development, Fertilizer access and fertilizer systems development, Free extension (advisory) services for farmers, Marketing opportunities, and E-Agriculture.

The programme aims to make fertilizer more accessible to encourage appropriate fertilizer use, offering a 50 per cent price subsidy, which accounted for more than half the PFJ budget, aimed to ensure the timely availability of fertilizer, he said.

Dr Iddrisu explained that during the 2015 planting season, figures from the Ministry of Food and Agriculture (MoFA) showed that maize, rice and sorghum reached only 35 per cent, 46 per cent and 55 per cent respectively, of their potential yields.

“This low productivity has been linked to a lack of access to nutrient fertilizer, partly due to high prices,” he said.

Ms Angela Dannson, the Director in charge of Policy Planning, Monitoring and Evaluation, MoFA, welcomed the findings and said when all the agriculture sector initiatives, including the Rearing for Food and Jobs, were continued and the fertilizer subsidy maintained, Ghana would soon be food sufficient.

She encouraged the private sector to get involved and invest in the agriculture sector.