The use of fertilizers by farmers in Ghana is constrained by several factors, especially:
Insufficient credit support to the farmer.
High lending rates by Commercial Banks for the agricultural sector.
Problems with the marketing of agricultural produce.
The dependence on rain for crop production.
The dependence on donor sources for funding of agricultural projects.
Improper use of fertilizers by farmers.
These factors will be considered in detail in the following sections.
Credit support from Commercial Banks as loans and advances to agriculture, forestry and fisheries has been very low compared to the manufacturing sector (Table 40).
Since farmers are normally poor and the level of productivity is low in Ghana, the agricultural sector can grow at a faster rate only if the government introduces productivity- enhancing support.
TABLE 40
Percentage of credit support from Commercial
Banks
|
Year |
Agriculture, forestry |
Manufacturing |
|
1997 |
3.2 |
27.5 |
|
1998 |
2.2 |
29.1 |
|
1999 |
1.6 |
32.4 |
|
2000 |
1.0 |
21.6 |
|
2001 |
1.4 |
21.0 |
|
2002 |
2.1 |
20.3 |
Source: MOFA, 2003.
The government is attempting to do this through the President’s Special Initiative on specific crops such as cassava and oil-palm.
The high lending rates for the agricultural sector deter farmers from obtaining loans from the Commercial Banks, for the purchase of agricultural inputs such as fertilizers. The lending rates for the agricultural sector, the export sector and the manufacturing sector are similar (Table 41). Since the turnovers in the export and the manufacturing sectors are normally higher than those of the agricultural sector, investments are more likely to go into the export and the manufacturing sectors than into the agricultural sector.
TABLE 41
Minimum and maximum lending rates from
Commercial Banks (percent per year)
|
End of period |
Agricultural sector |
Export sector |
Manufacturing sector |
Consumer price inflation* |
|
1997 |
35 - 49 |
35 - 49 |
39 - 49 |
28 |
|
1998 |
30 - 42 |
31 - 45 |
32 - 45 |
17 |
|
1999 |
30 - 40 |
31 - 40 |
33 - 40 |
23 |
|
2000 |
34 - 52 |
34 - 52 |
34 - 52 |
15 |
|
2001 |
39 - 55 |
38 - 55 |
39 - 55 |
25 |
|
2002 |
27 - 50 |
38 - 55 |
27 - 50 |
15 |
* Estimated.
Source: MOFA, 2003.
The marketing of agricultural produce is a long-standing problem. Access roads to facilitate evacuation of farm produce from the producing centres to the market are either in a very bad condition or non-existent. Inadequate storage facilities and insufficient agro-processing plants hinder agricultural production. During the harvesting period, farmers are at the mercy of middlemen who purchase farm produce cheaply in the areas of production. The lack of good markets for their produce deters farmers from increasing production and hence using fertilizers.
Crop production in Ghana is dependent on rainfall, which is mostly irregular and unreliable. The efficiency of fertilizer use relies on water availability and uncertainty in this respect reduces the farmers’ incentive to use more fertilizers. At present the area under irrigation amounts to only 11 000 ha or 0.2 percent of the irrigated land. Many large irrigation schemes are underutilized.
Most agricultural projects depend on donor sources for funding. For example, in the 2002 budget of MOFA, the Government of Ghana’s contribution was 33 percent and the remaining 67 percent was expected to come from donor sources. Donor funding is used largely to implement projects, while the government’s contribution is used mostly to pay staff salaries, wages, travel allowances and other emoluments. The delay in releasing funds by donors often adversely affects the implementation of agricultural projects such as fertilizer use trials.
In view of the constraints identified concerning the use of mineral fertilizers in Ghana, there is an urgent need to develop programmes that encourage their application. Among programmes that have already been initiated are the President’s Special Initiative in the production of cassava for starch export and of oil-palm. This Initiative is among the programmes of the Ghana Poverty Reduction Strategy (GPRS).
Another project that will boost fertilizer consumption is the expansion of fertilizer use on cocoa. Since the initial pilot scheme funded by the government, cocoa farmers have obtained a significant improvement in their output of cocoa beans.
Fertilizer consumption would be higher if the area under irrigation were increased.
The research/extension linkage should be strengthened in order to educate farmers on the proper use of fertilizers.
