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NATIONAL FERTILIZER SUBSIDY PROGRAMME ON COURSE

Phelomina NkasiaBy Phelomina Nkasia


The National Fertilizer Subsidy Programme is one of Government of Ghana’s major agricultural interventions which the Ministry of Food and Agriculture (MoFA) has been spearheading since 2008.

 

The Fertilizer Subsidy Programme, which was launched at the beginning of the year 2015 is aimed at enhancing food production and security. The two types of fertilizer in the subsidy category are compound fertilizer (all types) and Urea.

 

The programme is within the national development agenda with a view to promote the agriculture sector to contribute significantly to the structural transformation of the economy. It is also expected to maximize the benefits of accelerated growth of the country and raise the average income of Ghanaians, especially peasant farmers, and improve the chances of attaining at least five of the eight Millennium Development Goals (MDGs). 

 

Contrary to reports in a section of the media that seeks to suggest that government is failing to release funds through the Ministry of Finance to the accredited companies for the importation of the fertilizers, the fertilizer programme has, since its launch, been progressively pursued to meet national aspirations and, in the opinion of many stakeholders, especially, those in the agriculture sector, a major contributory factor towards increased food production in the country.

Fertilizer application in Ghana is not the best, according to reports of the Food and Agriculture Ministry. Research has also established that its application is one of the lowest in the world, Whiles its low application rate is attributed to, among other factors, its high cost.

In other words, many farmers are not able to afford the product, which translates into low productivity. The introduction of the fertilizer programme was, therefore, to address the challenges and increase crop production and productivity for food security and sustainability, with particular attention to small holder farmers cultivating maize, rice, sorghum and millet, and with priority on food crop.

Under the programme, beneficiary farmers, including cotton farmers in the north of the country, registered under recognized nucleus farmers groups and companies.

Available records, indicate that, since the inception of the programme from 2008 to 2013, a total of 724, 055 metric tons of fertilizer had been subsidized at the cost of Gh¢345.244 million cedis and that the largest roll out of the application programme worth 176,746 million cedis, took place in the year 2011.

The records also show that there was no subsidy programme in 2014, even though the target was set that year was to increase fertilizer use rate to at least 50kg per hectare by 2020 as suggested in the Medium Term Agricultural Sector Investment Programme of the Ministry of Food and Agriculture.

For the compound fertilizer of 50kg/ha, out of the full cost of Gh¢115.00 government subsidy amounts to Gh¢26.00 thus pegging the selling price at Gh¢89.00, representing 26% in price reduction while for Urea, government subsidy on 50kg/ha costing Gh¢105.00 was Gh¢21.00, representing a 20% of subsidy.

The market prices for both the compound fertilizer and the urea were Gh¢89.00 per 50kg bag and Gh¢84.00 per 50 kg bag, respectively. By these price reductions, it is estimated that government is subsidizing fertilizer at an average of 21%.

Six companies took part in the bidding process and were evaluated to have qualified for the award of the contract as the Marketing and sales companies through their accredited sales agents for the products. The companies are Yara Ghana Ltd., Afcott Ghana Ltd., AMG West Africa Ltd., Louis Dreyfus Commodities Ltd. and ETC Ghana Ltd.

Meanwhile, the sector Minister (COMMA) Hon. Fiifi Kwetey(COMMA) on Thursday (COMMA) July 9, 2015 paid a familiarization visit to the Tema Chemicals Limited (TCL), one of the leading local Ghanaian Companies engaged in fertilizer production, importation and distribution in the country. The company imported either the finished products or the raw material and blended them into fertilizer.
 

Briefing the Minister, The Chief Executive Officer (CEO) TCL, Mr K. K. Donkor, said the company started operation in 1976 with the objective of supporting the development of the Agriculture sector in the Country.  Mr Donkor said besides dealing in fertilizer, the company also DEALT in Animal production.  Mr. Donkor explained adding that that the company was a one stop place for agricultural inputs.

The Company, according to Mr Donkor, Chief Executive Officer, had in stock 70,000 tons of fertilizer in Kumasi ready for distribution to the Northern part of the country whose farming season would begin shortly and was optimistic that this year’s farming season would not be affected as the company and other local ones would endeavour to make fertilizer available to farmers.

He explained that government did not import the product, but rather facilitates its importation and that importation is done by private companies with financial assistance from the banks.  With the full implementation of the programme, it is the expectation of (MoFA) that the present application rate of 12kg per hectare will increase to 20kg/ha, which is projected in the Abuja declaration on Fertilizer Use by the African Green Revolution.

It is also expectation of the ministry that farmers take advantage of the opportunity it offered to make the maximum use of fertilizers for increased production and productivity.


Source: ISD

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