Gov’t scratches head over fertilizer subsidy saga

Government’s fertilizer subsidy programme risks total collapse following admission by the Food and Agric Ministry of lack of funds to pay dealers in time for supplies to be made to farmers during the crop planting season.

The suppliers are currently owed several months in arrears and the inability of the government to fulfill its debt obligations has put the fertilizer subsidy programme in limbo as more dealers are seriously reconsidering their participation in the programme.

Already, Yara Ghana, a company which in 2014 supplied more than half of the market’s needs has opted out of the fertilizer programme raising fears over the possible drop in crop yields at a time the rainfall pattern has been disappointing the three northern regions of Ghana, considered the food basket of the country.

But the Deputy Minister Food and Agriculture, Dr Alhassan Yakubu who read a speech on behalf on the minister told Parliament that the government was hopeful of meeting the payment demands of the suppliers by the end of the year.

He explained: “The Ministry is making arrangements with the Finance Ministry to ensure that all payments for the 2015 fertiliser subsidy programme are made by the end of the year.”

“The main challenge we have this season is delayed and erratic rainfall which is adversely affecting the cropping calender especially in the northern part of the country”.

The country-wide fertilizer subsidy programme instituted in 2008 is considered one of the unique case of public-private partnership in which the government consuklted heavily with fertilizer importers in the design stage and relied exclusively on the existing private distribution system to deliver fertilizer to farmers as aprt of efforts to boost production output.

The fertilizer subsidy programme was relaunched in March 2015, that notwithstanding it became dormant due to government’s inability to pay suppliers, the deputy minister food and agriculture minister, Dr Alhassan Yakubu who read a speech on behalf of the minister

Despite assurance by the Ministry of Food and Agriculture that it has concluded discussions with the rest of the companies and distribution of fertilizer under the subsidy programme has resumed, farmers still remain unhappy.

Fertilizer company, Yara Ghana Limited, has already withdrawn from the government’s subsidy programme, which subsidizes fertilizers for farmers.

Farmers have in recent times been complaining about the infrequent support from government under the programme; a situation they say has been resulting in low yields.

The National Farmers and Fishermen Award Winners Association of Ghana (NFFAWAG) sometime last month appealed to the government to release fertiliser subsidies to fertiliser distributors.

Many of the companies had stopped supplying subsidized fertiliser to farmers due to the delay in the release of the subsidy amounts to them.

In 2008, the fertilizer subsidy programme was established to help farmers increase their rate of fertilizer application as a means of increasing crop productivity as well as increase the country’s fertilizer application.

The Chairman of NFFAWAG, Mr Davies Korboe, said the situation had forced farmers to buy fertilisers at high prices on the open market.

As a result, he said, farmers in the southern and middle belts of Ghana were likely to record low yields because of the weather, compared to what they were getting previously.

With the current situation, farmers were compelled to buy fertiliser at between GH¢120 and GH¢130 on the open market. “As the members of the NFFAWAG, we cannot fold our arms and allow our women, peasant and smallholder farmers to go through the pain of buying fertiliser at such prices when indeed the government has given them hope of getting fertiliser at a subsidised rate,” he said.

According to the group, any further delay in resolving the problem could jeorpardise the quantities supplied under the programme.

The target groups under the fertiliser subsidy programme are primarily smallholder farmers and women cultivating maize, rice, sorghum and millet.

Mr Korboe said, other fertiliser distributors, including Cherice Ghana Limited, Afcott Ghana Limited, AMG West Africa Limited, Louis Dreyfus Commodities Limited and ETC Ghana Limited “were battling with issues concerning exchange rate differentials with the Ministry of Finance.”

It is the expectation of the Ministry of Food and Agriculture that the present application rate of 12kg per hectre will increase to 20kg/ha projected in the Abuja declaration of fertilizer use by the African Green Revolution.

According to the sector Minister, Fiifi kwetey, the fixing of the price will make it unattractive to smuggle the facility to our neighbouring countries.

The introduction of the programme had been a contributory factor to improved food production in the country lately, compared to the pre-fertiliser subsidy period.