The cut in distribution by 150 percent, according to the minister, is due to the advent of current global challenges such as the COVID-19 pandemic and crisis between Russia and Ukraine.
Speaking to the B&FT at Yara’s ‘Grow Ghana’ initiative in Tema, the minister said: “The first three years of PFJ was very smooth until COVID came in 2020; leading to a rise in fertiliser prices to incredible heights on the global scene, coupled with shortages on the Ghanaian market”.
He said with the world price of fertiliser increasing more than four times, there was no way the exchequer could cope with a 50 percent subvention; hence the decision by government to cut back on the subsidy.
“It’s unfortunate that the challenges have disrupted our plans. This year, physical supply of fertiliser has dwindled to about 150,000mt,” Dr. Afriyie Akoto said.
Data from the Peasant Farmers Association of Ghana (PFAG) indicate that subsidies on fertiliser have been reduced from 50 percent to 15 percent in the 2022 crop season.
Despite the drop in supply, government in the 2022 national budget has allocated US$98million to fund the PFJ policy.
Rising fertiliser and input prices
A 50kg bag of subsidised fertiliser currently sells at GH¢320, and a peasant farmer requires not less than GH¢1,000 for an acre of production. So with 5 acres of cultivation, fertiliser worth GH¢5,000 is required.
The open market price of 50kg bag is GH¢500, and GH¢550 in some locations across the country.
The above expenditure excludes the cost of agro-chemicals and tractor services, as well as other production factors.
A subsidised 25kg bag of fertiliser that was sold at GH¢53 last year now sells at a subsidised rate of GH¢160; with the open market price of same, which was GH¢150, now going at almost GH¢350.
Equally, agro-chemicals that were sold for GH¢20 last year now sell for GH¢60, with the price going as high as GH¢70 in some locations.
Yara is committing up to US$20-million, this year, to supply free fertiliser for farmers in Ghana as part of its intentions to secure access to low-cost, high-quality crop nutrition solutions which help strengthen the country’s national food security agenda.
The company said the COVID-19 pandemic and war in Ukraine have compromised access to affordable fertiliser, hindering farmers’ ability to feed their communities and threatening food security across the world – hence the decision to assist farmers through this project.
The initiative is expected to reach over 100,000 smallholder farmers, and support production of over 500,000 tonnes of cereals in Ghana.
Dr. Afriyie Akoto called for private fertiliser companies to emulate the gesture by Yara to support government in sustaining the PFJ initiative.
“We want other partners to come forward and assist like Yara in order to support government in the PFJ programme. We need assistance to make the sector thrive,” he implored.