PFJ: Gov’t suspends flagship farming subsidy programme

The Ministry of Food and Agriculture has announced that it is suspending the subsidy for its flagship ‘Planting for Food and Jobs’ (PFJ) programme, which has been in operation for the past six years. The decision follows the appointment of Brian Acheampong as sector minister, who has expressed his interest in finding a more sustainable way of financing fertiliser and seed for farmers, instead of the expensive annual subsidy currently in place.

The new approach proposed by the ministry involves adopting a value chain approach, where aggregators or out-growers will acquire inputs from the government and distribute them to member-farmers. The harvests will subsequently be purchased by the Ministry of Food and Agriculture to cater for government interventions such as the School Feeding Programme and others, with key associations such as poultry farmers and multinationals including Nestle targeted for supplies.

This new method is a departure from the PFJ system, which saw the government subsidise seeds and fertilisers for all farmers and make payments to input distributors. The decision to suspend the subsidy programme that started in 2017 could also be viewed as a cost-cutting measure, as the government attempts to reduce its expenditure in line with conditions for the proposed economic bailout from the International Monetary Fund.

The PFJ programme has been criticised for hoarding, smuggling and corruption, which have reportedly led to contracts being awarded to distributors who supplied substandard inputs without any monitoring systems. Last year, the Peasant Farmers Association of Ghana (PFAG) alleged that contracts were awarded to fertiliser distributors who supplied substandard and poor-quality input to farmers, but still received payment from the government.

Since the PFJ’s inception in 2017, the Ministry of Food and Agriculture has reduced subsidies on fertilisers from 50% in the last five years, to an unprecedented 38% in the 2021 crop season. In the 2022 crop season, subsidies dropped as low as 15%, leading many stakeholders to question whether the programme had reached an anti-climax.

Despite these challenges, the PFJ has reportedly contributed to the growth of the agricultural sector in Ghana. At the launch of a financing scheme by the Ghana Incentive-Based Risk Sharing System for Agricultural Lending (GIRSAL) last year, former Minister of MoFA, Dr. Owusu Afriyie Akoto, stated that the value of food commodities produced under the PFJ programme was worth US$6.1bn from 2017 to 2021, after the government invested some US$321m in the programme.

The new value chain approach proposed by the Ministry of Food and Agriculture is expected to bring stiff competition for quality delivery from fertiliser distributors, as their products will no longer be subsidised by the government but sold on the open market. Speaking to the B&FT on the new development, Executive Director of the Peasant Farmers Association of Ghana (PFAG), Dr. Charles Nyaaba, expressed his satisfaction with the new approach, stating that it would bring quality delivery to farmers through an open competition system.

Overall, the suspension of the PFJ programme and the adoption of a new value chain approach for financing fertiliser and seed for farmers is expected to bring significant changes to the agricultural sector in Ghana. The move is likely to lead to improved quality delivery and more sustainable financing options, which could ultimately benefit farmers and the sector as a whole.

Source: norvanreports