Fertiliser subsidy could take a hit

…but farmers say “We expect nothing less than 180,000mt”

Once economic challenges affect allocations to other sectors, farmers should expect fertiliser subsidies to take a hit as well, Alhaji Alhassan Yakubu-Deputy Agric Minister, has said -- raising concerns as to whether government will deliver the full complement of the 180,000metric tonnes of the input it promised farmers this year.

The minister’s comments were in response to concerns that although government promised the same quantity of subsidised fertiliser last year, it ended up doing just about half.

The occasion was the launch of a report commissioned by the Peasant Farmers Association of Ghana (PFAG) that looked at the fertiliser subsidy programme in 2015, and points at a number of challenges including undue delays, uneven distribution, and limited number of retail outlets.

Charles Nyaaba, a Programmes Officer of PFAG, told the B&FT that the group finds the minister’s comments “unfortunate”, since government would have done its scrutiny before deciding the amount of fertiliser it subsidises for any given year. 

The Association, he said, expects nothing less than the promised quantities -- especially since suspension of the subsidy programme in 2014 was partly why the crops sub-sector recorded negative growth in 2015, reducing overall sector growth to 0.04 percent.

“This is not like a favour that they are doing us; the money is coming from the annual budget funding amount, which we are entitled to. So we expect 180,000MT,” he said.

The 2016 budget captures the fertiliser subsidy programme as one of government’s key “poverty focused expenditures” -- noting that out of a total allocation of GH¢355.14million for the agric sector, “about GH¢302.46million, representing 85.17 percent, is to be spent on the Fertiliser Subsidy programme and the Agricultural Mechanisation Service Centres, among others”.

In March, Agric Minister Alhaji Mohammed Limuna announced that government was to absorb 26% of the cost of the 180,000 tonnes of fertiliser, so that with effect from 1st April 2016 a 50kg bag of compound fertiliser would sell at GH¢85 while the same quantity of Urea would go for GH¢80

Yara Ghana, one of the key fertiliser dealing companies that pulled out of the programme in 2015 due to the delays, has returned for the 2016 season. 

According to the report on the fertiliser subsidy programme, which was put together by Dr. John Baptist Jatoe of the University of Ghana, both farmers and participating companies are restive about undue delays from government’s side, resulting in the input reaching farmers way later than they need it.

“Subsidised fertiliser became available on the market in the Central and Ashanti Regions in April 2015, whereas there are conflicting reports on its availability in the Northern and Upper East Regions,” the report said. 

“Information from fertiliser distributors in the regions suggest that they took delivery of subsidised fertiliser beginning from July 2015,” it added. 

To deal with the delays in releasing the fertiliser, the report said: “Government and other stakeholders need to re-visit the timing of the programme to ensure that the subsidised fertilisee are available for distribution in good time”.

It added that: “The scheme should target getting any such subsidised fertiliser to distributors and retailers by the time farmers begin ploughing their fields. This calls for more commitment to the process and early confirmation of orders with the suppliers”.

For 2016, the programme was launched in March -- a move the farmers see as being “early” and commendable, although disbursement is yet to take place. 

“The development is a good news to farmers and we hope disbursement will follow soon,” Abdul-Rahman Mohammed, President of the PFAG said at the launch of the report in Accra on Tuesday. 

Other challenges identified by the report include limited number of retail outlets, large-scale farmers getting more fertiliser than their quota allows, and the fact that some farmers still consider the subsidised price to be high.

“To help address these challenges, they suggested increasing the retail outlets for subsidised fertiliser, reducing the prices of subsidised fertiliser further, and prompt disbursement of subsidised fertiliser,” the report said. 

From approximately 43,000mt in 2008, the quantity of fertiliser distributed under the subsidy programme increased steadily to 176,278mt in 2011, before declining to 166,807mt in 2013. 

Following a break in 2014 the 2015 fertiliser subsidy programme was relaunched on April 30, 2015.

Under the programme, participating companies are required to import, clear from the ports, pay all charges and deliver allocated quantities of various types of fertiliser to their designated Regional/District distributors.

Selected and registered sales agents then sell to the farmers through an established elaborate Waybill/Receipt System. On their part, farmers are required to purchase fertiliser using passbooks issued by MoFA. 

Government projects that the agriculture sector will record an average growth rate of 3.5 percent for both 2016 and 2017, to compensate for the 2015 dismal 0.04 percent outturn it has been flayed for variously.Source:B&FT