Operationalise fertiliser expansion programme to boost agriculture – Policy LINK

USAID-supported Feed the Future Ghana Policy LINK has recommended policy changes in the current Ghana Fertilizer Expansion Programme (GFEP), which expires in 2024, to address bottlenecks in the domestic fertiliser market and boost agricultural productivity.

Operationalising the GFEP, a five-year strategic framework, is aimed at promoting a viable agro-industrial economy, poverty reduction, competitiveness of agribusinesses, sustainable environmental management, and industrial growth.

The country constitutes about 10.6 percent of the West African fertiliser market, with an annual average consumption of about 400,000 metric tonnes (MT) between 2018 and 2020. Fertilizer imports are either in raw material for blending or are finished products. Government’s subsidy programmes for food crops and the cocoa sector have led to imports representing 70-80 percent of estimated national consumption.

However, very little is imported for open market transactions to commercial plantations and other private farmers.

The Agriculture and Food Systems Lead at the Feed the Future Policy LINK, Wekem Raymond Avatim, highlighted that the programme is struggling as private sector companies are less comfortable being associated with the project. The initiative requires a US$2million investment under a Public-Private Partnership (PPP) arrangement.

“There is a need to coordinate activities of the programme – including broad stakeholder consultations; updating the current GFEP strategic programme document, which expires in 2024; and evaluation of programme implementation and achievements against targets, to make it more attractive for private sector companies,” Avatim said.

This was made known at the Ghana Country Roundtable, convened by the African Fertiliser and Agribusiness Partnership (AFAP) jointly with Feed the Future Policy LINK. The conference, themed ‘The Future of fertiliser and agro-inputs in Ghana toward the soil health summit’, aimed to address challenges impacting local supply chains and their negative consequences on the country’s fertiliser and agro-inputs sectors.

Ghanaian farmers are facing difficulties due to lack of fertiliser availability and the increasing cost of production. This situation has resulted in reduced fertiliser usage, leading to a decline in agricultural productivity. However, with the recommendations made by Feed the Future Ghana Policy LINK, Ghana’s government can take a step in the right direction to address these issues.

Between 2017 and 2021, an average 408,440.6 metric tonnes (MT) in various forms of fertilisers were imported. The AFAP study (2020) projected a fertiliser market potential range between 500,000mt and 850,000mt (2021 to 2025). Fertiliser usage by smallholder farmers increased from 8 kilogrammes (kg) per hectare (Kg/ha) to 25kg/ha (2015 to 2020).

This has largely been due to several interventions: including Planting for Food and Jobs (PFJ); Global Affairs Canada Modernizing Agriculture in Ghana (MAG); and USAID interventions in the agriculture sector, among others. However, price hikes and unavailability of fertiliser have had a tremendous impact on the sector’s growth. Farmers have cut fertiliser usage by more than half, reducing the total fertiliser usage from 25 kg/ha to 5 kgs/ha in 2022. This is significantly lower than the minimum target set by the Abuja Declaration on Fertilizer of 50 kg/ha in 2006.

Additionally, the policy note recommends institutionalizing tax-waivers and reviewing port levies on agricultural commodities to reduce the cost of agricultural inputs.

While government secures tax-waivers on agricultural commodities, private sector companies do not feel the impact of these waivers due to numerous levies and fees required at the port. This situation constitutes about 15 percent of the imported products’ value. Without these waivers the cost of producing agricultural inputs will increase, leading to additional costs for farmers.

“There is a need to facilitate inter-ministerial committee coordination and dialogues targetted at the Ministries of Finance, Agriculture and Trade, and their relevant agencies.”

To support these recommendations, Feed the Future Ghana Policy LINK suggests facilitating inter-ministerial committee coordination and dialogues targetted at the Ministry of Finance, Agriculture and Trade, and their relevant agencies. The Ministry of Finance should be engaged to ensure that budgetary provisions are made for tax-waivers on agricultural commodities.

Policy LINK further called on the Ministry of Agriculture and Trade to work together on reviewing port levies to reduce the cost of agricultural inputs. The inter-ministerial committee should also explore the possibility of setting up a central platform to coordinate the waiver system, making it more efficient and transparent.