Delays in fertiliser payments threaten PFJ’s sustainability

100,000 farmers have benefitted from improved fertilisers in the 2020 agribooster campaign
  • debts linger for two years

Fertiliser suppliers for government’s Planting for Food and Jobs (PFJ) initiative have said the programme is under threat over debts owed by government, with some of the monies dating back to two years.

The suppliers said though the initiative had been successful in the first three years of its introduction, recent developments with regard to financing the project and making payments for fertilisers procured for the programme have received a lukewarm approach from the implementing authorities.

In 2020 the Ministry of Food and Agriculture (MoFA), under the PFJ, procured and distributed 364,233 metric tonnes of organic and inorganic fertiliser to farmers at 50 percent subsidy. This year, MoFA seeks to distribute a total of 521,380 metric tonnes of organic and inorganic fertiliser to 1.5 million farmers under the programme.

However, it is feared that projections for this year may not materialise due to current delays in debt payments to input dealers. There are more than 50 companies contracted to distribute fertiliser – both organic and inorganic – under the PFJ.

The delay in payments, according to these suppliers, is curtailing the initiative’s progress; as most of these companies cannot fulfil their financial obligation to banks for credit acquired, thereby making it difficult to access new credit to continue importing fertiliser or purchase raw materials for production.

Due to payment challenges, some suppliers could not distribute fertiliser to farmers from April 2021 till now. Reports from some of the distributors suggested that some farmers are beginning to lose interest in the programme, since they are readily not getting access to fertiliser under the initiative.

With the minor season due to begin from August, most of these farmers are apprehensive as to whether they will be able to obtain fertiliser to start planting. It is their hope that the Ministry of Finance will pay debts owed to these fertiliser companies, as there are only a few weeks left to the minor season.

Cancel subsidies

Some farmers under the programme told the B&FT that it would be appropriate if measures are taken to even cancel the subsidy, to enable them buy from the open market since their frustration about regular supply is not being addressed.

Despite the successes chalked up over the years, the PFJ itself has been clouded with many challenges – including heavy smuggling of fertiliser to neighbouring countries such as Burkina Faso, Togo and Ivory Coast.

Late submission of invoices

In a recent engagement with suppliers and farmers under the PFJ on June 10, 2021, Director of Crop Services at MoFA, Seth Osei Akoto, confirmed to the B&FT that most suppliers are fond of late submission of invoices for payments. It however remains unclear if late submission is the reason why the Ministry of Finance has failed to release financial clearance to pay some of these companies for two years.

Mr. Osei Akoto nonetheless said the Finance Ministry is responsible for payments, and once invoices are submitted to the MoF it becomes the responsibility of that ministry to effect payments and not MoFA. “Whatever happens after invoices are submitted is another issue, as we do not interfere in the MoF’s work,” he said.

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