Amid Fertilizer Crisis, Ghana’s Agricultural Sector Seeds a United Response
Ghana’s farmers cut fertilizer usage by more than half in the first year of the pandemic — from 614,000 metric tons in 2020 to 242,000 metric tons in 2021. Worse, prices in 2022 have increased by about 200 percent over 2020 and 2021 levels, leaving a current fertilizer deficit of some 501,000 metric tons.
With support from Policy LINK, USAID/Ghana has brought together donors, implementing partners and other international organizations working in the agriculture sector to address the knock-on effects of a severe fertilizer shortage in the country. The shortfall, which has pushed prices to twice their average a year ago, is compelling some farmers to reduce their acreage under crop production, switch to lower quality fertilizers, or substitute other crops less dependent on fertilizers. And that, say development experts, poses a direct threat to food security in the country.
Much of the crisis owes to the impact of the war on Ukraine and the ensuing sanctions on Russia, where Ghana sources half its fertilizer.
To address what many of Ghana’s farmers are already calling an unprecedented crisis, 18 representatives of international, regional, and local organizations gathered in Accra on July 7, 2022 to assess the scale of the challenge and find ways to guard against its worst threats. Much of the crisis owes to the impact of the war on Ukraine and the ensuing sanctions on Russia, where Ghana sources half its fertilizer. As Russia’s invasion grinds on, the U.S. Government has stepped up efforts to buttress Ghana’s vital sectors, with USAID announcing an additional $2.5 million in development assistance on August 5. So, too, has the African Development Bank, which last month announced a special financing facility to ease farmers’ access to fertilizer.
Also in attendance at the July 7 meeting were the Alliance for a Green Revolution in Africa (AGRA), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, World Food Program (WFP), Global Affairs Canada (GAC), Food and Agriculture Organization (FAO), International Food Policy Research Institute (IFPRI), and African Fertilizer and Agribusiness Partnership (AFAP).
Staggering Effects
In the last two years, the Covid-19 pandemic and Russia’s war on Ukraine have shrunk inorganic fertilizer supplies on the world market, sending prices soaring. In Ghana, the effects have been staggering: according to the Ghana Fertilizer Dashboard, the country’s farmers cut fertilizer usage by more than half in the first year of the pandemic – from 614,000 metric tons in 2020 to 242,000 metric tons in 2021. Worse, prices in 2022 have increased by about 200 percent over 2020 and 2021 levels, leaving a current fertilizer deficit of some 501,000 metric tons, according to AFAP.
Couple that with double-digit inflation figures, and the prospects for a quick recovery look bleak. According to Trading Economics, Ghana is grappling with its highest inflation rate in 19 years. Nearing 30 percent, that figure is higher still when isolating for food inflation, which stood at 31 percent in June. Meanwhile, the government of Ghana, as part of a sustainability plan, has revised the fertilizer subsidy rate under its Planting for Food and Jobs program. Initially pegged at 37 percent for the 2022 growing season, the government reduced the subsidy to 17 percent. Responding to this, the country’s major fertilizer dealers this year channeled more of their supplies to the open market, circumventing government distribution networks in favor of more lucrative retail outlets. The higher retail costs have further restricted farmers’ access to fertilizers.
A Coordinated Response
To address the fertilizer issue, development practitioners, along with stakeholders in civil society and the public and private sectors, have sought to coordinate their response. Here’s a look at some of the interventions that emerged from the July 7 meeting:
IFPRI is conducting analysis into policy options while AGRA, with funding from USAID, is supporting the Plant Protection and Regulatory Services Directorate (PPRSD) of the Ministry of Food and Agriculture (MoFA) to develop guidelines for organic fertilizer production as an alternative to imported inorganic varieties. Part of the aim is to digitize the production process to enhance transparency and efficiency for quality assurance and registration.
Development partners GAC, GIZ, and WFP are working to ensure that financial arrangements are available to agribusinesses to make agricultural inputs such as seeds as well as inorganic and organic fertilizers accessible to farmers, especially women.
FAO is also strengthening the capacity of stakeholders on to distribute fertilizers more efficiently while introducing social protection programs to help smallholder farmers gain increased access to crop inputs and, through them, boost livelihoods.
AFAP is working with private sector agro-input firms to support farmers in crop production, including by creating channels for smallholder farmers to access fertilizer, agro-inputs and good agronomic practices available.
USAID/Ghana has also been working with Feed the Future (FtF) implementing partners to implement various interventions in the fertilizer sector. These initiatives include the FtF Mobilizing Finance for Agriculture, FtF Market Systems and Resilience, and the Policy LINK activity – known as USAID Feed the Future Ghana Policy LINK.
Bringing a broad range of stakeholders together to develop inclusive solutions to some of the country’s most pressing policy challenges is a key aim of Policy LINK’s Ghana activity.
In addition, MoFA is working alongside representatives of the private sector and Civil Society Organizations to implement innovative mechanisms for helping smallholder farmers access fertilizers and boost food security in the the coming year. While the government of Ghana has given a directive through MoFA to increase the production, distribution (through sales and a subsidy program), and use of organic fertilizer as an alternative to inorganic fertilizer, a number of fertilizer manufacturers are responding to the global crisis with initiatives to provide relief to vulnerable smallholder farmers. These initiatives are in the form of direct donations to government subsidy programs, reduced pricing of fertilizer, and free bags to targeted vulnerable farmers.
Aligning with Government
As these emergency initiatives take hold, agriculture stakeholders in Ghana have turned to an Agriculture Sector Working Group (ASWG), formed before the pandemic to strengthen coordination and harmonize individual interventions, to maximize their impact. To ensure that these interventions also complement those of the government, participants in the July 7 meeting also called for the formation of a Food Security Fertilizer Task Team to track and make inputs into measures the government is putting in place to address fertilizer availability challenges and the looming food crisis.
Bringing a broad range of stakeholders together to develop inclusive solutions to some of the country’s most pressing policy challenges is a key aim of Policy LINK’s Ghana activity. The five-year project is supporting the government of Ghana as it implements evidence-based, inclusive development processes – a central focus of the government’s“Ghana Beyond Aid”initiative and pivotal to broad-based economic growth.
Resources
Learn more about Policy LINK’s work in Ghana.