Government slashes fertiliser subsidy by 20 percentage points
Over the years, the government has absorbed part of the cost of fertiliser, both organic and inorganic, and seeds such as maize, sorghum, rice and soybean, as well as tomato, pepper, onion and carrot seed
The Ministry of Food and Agriculture has reduced the amount the state pays by way of fertiliser subsidies by 20 percentage points.
The government was absorbing 35% of the cost of fertiliser and seeds used by farmers across the country but this has now been reduced to 15%.
The slashing of government subsidies will mean that farmers have to spend more on food production.
Over the years, the government has absorbed part of the cost of fertiliser (both organic and inorganic), and of seeds such as maize, sorghum, rice and soybean, as well as tomato, pepper, onion and carrot seed.
The subsidy was introduced to boost food production and improve farmer livelihoods. However, the subsidy, which used to be 50% of the cost price, was slashed to 35% last year and has now been reduced further to 15%.
This now means that, for a 25-kilogram bag of fertiliser that costs GHC193, the government will pay GHC33 while the farmer pays the remaining GHC160.
With vegetable seed (tomatoes, for instance), for every 100 grams of seed, which costs GHC70, the government will absorb GHC22 and the farmer will pay the remaining GHC48. For cereal such as maize, the government will now pay only GHC1 towards every GHC7 worth of grain.
Sources within the Ministry of Agriculture have told Asaase Business that the slashing of the subsidy is because the budget of the ministry has been cut. The reining-in is also in response to a global scarcity of fertiliser.
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