Ministry of Food and Agriculture suspends Planting for Food and Jobs subsidy, shifts to value chain approach

Ghana’s Ministry of Food and Agriculture has announced that it will no longer provide subsidies for its Planting for Food and Jobs (PFJ) programme, which has been in place for the past six years. The decision was made due to the high cost of maintaining the annual subsidy on inputs. Instead of providing subsidies, the ministry will implement a value chain approach in which aggregators will purchase inputs from the government and distribute them to member-farmers. The government will purchase the resulting harvests to support its various intervention programmes. Key associations and multinationals will also be targeted for supplies.

This new method of supporting farmers is a departure from the PFJ system, in which the government subsidised seeds and fertilisers across the board for all farmers. Farmers have complained that the mostly substandard inputs supplied under the PFJ were not of the same quality as those purchased from the open market. The new intervention 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.

The decision to scrap the subsidy programme could also be viewed as a cost-cutting measure, as the government tries to reduce its expenditure in line with conditions for the proposed economic bailout from the International Monetary Fund.

The PFJ programme has faced several challenges over the years, including hoarding, smuggling, and corruption. Fertiliser distributors allegedly received contracts for supplying substandard inputs without any monitoring systems in place. The decline in subsidies for fertilisers in recent times has led many stakeholders to question whether the programme has reached an anti-climax.

For the most part, the new intervention is expected to bring quality delivery to farmers through an open competition system. Aggregators now have the choice to decide which distributor to buy from on the open market, based on quality and pricing. The decision by the Ministry of Food and Agriculture to shift its support mechanism for farmers from subsidies to a value chain approach is expected to ensure sustainable financing for fertilisers and seeds in the long term.