Subsidising fertiliser is a waste of money, says Pianim

The renowned economist Kwame Pianim says the government’s policy of subsidising fertiliser for farmers is a waste of Ghana’s resources.

He is urging the government to rather think of tracking policies to get educated people into the agricutural sector and transform it so it is based on commercial farming.

Speaking with Kwaku Nhyira-Addo on The Asaase Breakfast Show on Thursday (16 December), Pianim said: “The mistake is that we believe we can transform agriculture with peasant farmers. It has never happened anywhere in the world and it’s not going to happen … it’s large-scale agriculture that we need.

“So, when you are putting money to subsidise fertiliser, it’s a waste of money. If you have commercial farmers and fertiliser will improve their yields by 35%, you go and sleep on the fertiliser: they will come and remove you and get the fertiliser from you; they will pay.”

He continued, “Agriculture is hard under this sun, so if you give me free fertiliser and I have to go into the sun to work and the yields are not going to come because it’s unpredictable and I don’t have irrigation, I will go and sell it [fertiliser].

“So, we need to focus … How do we get educated people into farming? It means mechanisation; [the farmer] can sit in his tractor and plough his farm …”

The distinguished economist said agriculture is “our big base” and that the government must pursue agricultural mechanisation and irrigation as well as procure high-yielding inputs, reasonably good roads and other essential adjuncts to transform the sector.

Pianim said the One District, One Factory policy is an excellent idea that Ghana needs to pursue aggressively to grow the national economy.

Agriculture in Ghana

The agricultural sector performed sluggishly in recent years, expanding at just 3.6% a year between 2010 and 2016, against average growth of 7.2% in the economy overall. In 2017, however, it grew by 6.1%, in 2018 by 4.8% and in 2019 by 4.6%.

Growth in the sector has been attributed mostly to land expansion rather than improvements in productivity, raising grave concerns about the sustainability of Ghanas agricultural model, especially given the country’s rising levels of urbanisation.

To promote productivity and create jobs in the agricultural sector, Ghana’s government rolled out the Planting for Food and Jobs (PFJ) programme in 2017.

The programme encourages farmers to adopt new technologies, such as improved seed and fertiliser, providing incentives and appropriate training as well as improved access to markets by using information and communications technology.

The experience of numerous countries suggests agricultural transformation increases productivity, and that using modern agricultural inputs such as fertiliser is an essential feature of this transformation.

However, there is no consensus on the economic impact of input price subsidy programmes. The cost of implementing such programmes is often high and the evidence of their impact is mixed.

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