Delays in tax exemptions under PFJ 2.0 threaten food security – CropLife Ghana

Mr. Kadiri Rashad, Programme Manager - CropLife

By Ebenezer Chike Adjei NJOKU

The nation’s food security faces a potential threat due to delays in implementing tax exemptions on agricultural inputs, according to CropLife Ghana, an association of importers and distributors of pesticides, fertilisers and other agricultural supplies.

The concerns stem from delays in implementing the tax exemptions under the second phase of the Planting for Food and Jobs Program (PFJ 2.0), leading to a rise in import charges. These charges, coupled with the already high global prices of agricultural inputs, are making farming a financially risky venture for many stakeholders, the association argues.

The government launched PFJ 2.0 in June 2023, aiming to modernise agriculture and ensure food security. The programme’s success hinges on the availability of affordable agricultural inputs, as acknowledged in the 2024 national budget which promised tax breaks on these essentials.

“The success or otherwise of the PFJ 2.0 is largely dependent on the availability of quality agriculture inputs such as pesticides, fertilisers, seeds and machinery at affordable prices to farmers, “CropLife Ghana said in a statement signed by Kadiri Rashad, its Programme Manager.

“The high cost of inputs, such as pesticides and fertilisers coupled with the escalating cost of agricultural services, is making farming unattractive and unprofitable – leading to a low supply of food in Ghana,” the statement added.

This situation is further aggravated by the high reference point values charged by the Ghana Revenue Authority (GRA) on pesticides, further inflating import costs.

“While we await the Finance Ministry to implement the tax exemptions through the Ghana Revenue Authority (GRA), members of CropLife Ghana and other service providers have their pesticides and fertilisers locked up in the ports due to exorbitant charges slapped on them by way of import duty,” Mr. Rashad explained.

The delays have a ripple-effect, causing shortages of essential agricultural supplies and discouraging farmers from planting crops.

“There are several importers who are unwilling to make any shipment due to this development; and farmers are already experiencing shortages in one way or the other, which has a dire consequence on the country’s food security initiatives,” he added.

Already, Ghana, like many other African countries, is battling with food insecurity. According to a 2022 report by the Food and Agriculture Organization of the United Nations (FAO), approximately 23.7 percent of the population in West Africa experiences moderate to severe food insecurity

More specifically, the 2022 Annual Household Income Expenditure Survey showed that nearly half (49 percent) of Ghana’s population already experiences food insecurity in the earliest months of the year.

Delays in implementing the tax breaks could exacerbate this issue, potentially leading to food shortages and rising food prices.

Consequently, CropLife Ghana is urging the government to prioritise food security by expediting the implementation of the tax exemptions on agricultural inputs.

“The Executive Council of CropLife Ghana is therefore calling on the Ministry of Finance to, as a matter of urgency, grant the tax exemptions for the importation of pesticides as captured in the 2024 national budget if, indeed, food security is a national priority,” Crop Life further stated.

In August 2023, during a meeting with the Peasant Farmers Association of Ghana (PFAG), Minister of Food and Agriculture Bryan Acheampong indicated that the government was considering tax breaks on imported agricultural supplies.

While a final decision awaited cabinet approval, Mr. Acheampong revealed his office had already been actively granting exemptions on a case-by-case basis. By the beginning of that month, he said, over 60 such exemptions had been approved.

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