The Minister of Food and Agriculture, Dr Owusu Afriyie Akoto, has expressed worry about the sustainability of the flagship Planting for Food and Jobs (PFJ) due to a large debt owed to partners of the programme.
He said importers of fertilizer under the PFJ were under siege by their financiers because out of GH¢940 million owed dealers in fertilizer and other subsidies since the beginning of last year, the government had been able to pay only GH¢250 million.
Describing the prospects of the flagship programme as “precarious”, the minister said as a result of the high indebtedness to the fertilizer producers and importers, they had defaulted with their banks and had to pay penalties on their letters of credit.
In an exclusive interview with the Daily Graphic yesterday on the widespread shortage of subsidized fertilizers in the country, Dr Akoto called for the re-prioritization of the country’s expenditure, with emphasis on investing more in the agricultural sector.
Investing more in agriculture, he explained, would enable the country to feed the population, keep farmers in business and create more employment opportunities.
“If food is indeed a priority area for the population, then it means that in terms of expenditure within the declining revenue, we need to re-priorities our expenditure for the Planting for Food and Jobs,” he said.
Expatiating on the precarious position the fertilizer importers found themselves, Dr Akoto said: “They do not have the money to recycle and the Ministry of Finance has not released their money to them.
“Consequently, the importers have not been able to import the fertilizer, hence the shortage of the commodity nationwide.”
Cries of suppliers
While the minister lamented the development, companies partnering the government to implement the fertilizer subsidy programme have also appealed for the payment of arrears owed them.
Numbering more than 40, the companies said they had not received payments for the difference between the actual cost and the subsidized cost for a year and a half, a situation that was affecting their productivity.
Representatives of some of the companies, who confided in the Daily Graphic on condition of anonymity, said the delay in the payment of the subsidies had swelled their indebtedness to the banks and as a result the banks were declining to extend more credit to them.
“Until recently, the government seems to have lost interest in the programme and reneged on its basic responsibilities towards payment of fertilizers distributed under the programme and, therefore, making it difficult for companies engaged in the programme to fulfil their obligations to the banks and continue to import more raw materials for fertilizer production,” a source at one of the biggest fertilizer suppliers said.
Throwing more light on the situation, Dr Akoto sympathized with the importers, especially as the COVID-19 pandemic had compounded their situation.
“Because of COVID-19, the production of world fertilizer has gone down and so prices on the world market have gone up and the freights have actually tripled, making fertilizer more expensive than they were last year,” he said.
In that context, he said, the suppliers had two problems – first, facing the rising price on the world market and secondly, the monies that are owed them for imports supplied to farmers in the 2020 cropping activities.
“As we speak, there is still over GH¢680 million to be paid by the Ministry of Finance to these suppliers and so, they have not been able to import the fertilizer, hence the shortage,” Dr Akoto said.
Notwithstanding the delay in the payment of importers, the minister said the cropping season could not wait,
“This has a dire consequence on the prospects of the PFJ,” he stated.
Dr Akoto, nevertheless, expressed the hope that in the upcoming mid-year budget review, the Ministry of Finance would be able to pay the suppliers to enable them to import the commodity for the farmers for the minor farming season as they had already missed out in the major farming season.
“Otherwise, the consequences are very clear. Currently, we have evidence of farmers in the Upper West, Upper East and the Northern regions saying that they have to cut back on their acreages because they cannot get the fertiliser to apply and for the smaller acreages that they produce too, there is no fertilizer,” Dr Akoto said.
The input dealers said they were not against the PFJ, which, they said, had performed perfectly.
“There is no gain in denying the fact that since the introduction of the PFJ fertilizer subsidy programme to farmers, it has been of immense benefit to the government and to the farmers themselves as well,” an input dealer said.
They argued that since the introduction of the fertilizer subsidy programme, many farmers who hitherto could not achieve beyond three bags of maize per acre could achieve 10 bags and above at the inception of the PFJ programme.
The group said the programme was so widespread that it encouraged other professionals to venture into farming and cereal production in general.
They also conceded that the programme had run successfully in the first four years of the current administration, enabling fertilizer importers to diversify from solely importation into developing their expertise to start producing locally and exporting to neighboring countries to earn the much needed foreign currency to support the local economy.
Their main challenge, however, is the recent government inertia in paying monies due the input dealers, saying “companies can no longer continue to finance the programme as they used to. The banks are unable to support us in the wake of government’s continued non-payment for fertilizers distributed to farmers”.
In 2017, the inception year, 202,000 farmers signed on to the programme.
The number increased to 677,000 in 2018 and about 1.2 million in 2019.