Agro-input suppliers desperate for Government intervention
Given the increased cost of everyday food items on the market recently, some apprehension has been expressed for Ghana’s food security. One of those to register such a concern is CropLife Ghana, the local wing for the international organisation promoting plant science and sustainable agriculture. According to this group, the high cost of agricultural produce on the market can be tied to several economic factors, including the increased cost of agro-inputs such as fertilizers and pesticides used by farmers.
Importers and Suppliers of these agro-inputs who make up the membership of CropLife Ghana have attributed the increased cost of their products to higher duties and taxes payable at the various ports of entry, of which they are crying out for government’s swift intervention.
According to these suppliers, since the beginning of the year 2023, they have had to pay full taxes for products that hitherto they would enjoy some exemptions on. Eight (8) months into the year, they said not much has changed, following several attempts to get government to grant tax exemptions on agro-inputs.
These sentiments were re-echoed on the latest edition of the Eye on Port program on Accra-based Metro TV.
The Program Manager for CropLife Ghana, Kadiri Rashad lamented that industry found it confounding that agro-inputs were excluded from the tax exemptions act of 2022 considering the role agriculture plays in the national economy.
He said in the aftermath of the passing of the law, the Ministry of Finance reserve the prerogative to grant industry-specific tax exemptions to justified applicants. According to CropLife Ghana, applications have been sent in, but the Ministry is yet to heed to their requests.
“The Ministry of Finance can grant exemptions to the Ministry of Agric if put into writing. So we push through the Ministry of Agric to write to the Ministry of Finance to grant those tax exemptions but till date none of our companies have been able to enjoy these exemptions. The letter was written to the Ministry of Finance around 10th January and up till now, they haven’t granted us these exemptions.”
He lamented that, the long wait has led to goods accruing rising demurrage fees at the ports, exacerbating their current predicament.
Mr. Rashad said the overwhelming increase in clearance cost has affected price of products on the market leading him to believe that the longer this continues, “it will have a dire impact on food security in the country.”
He said following meetings earlier this year with the Minister of Agric and the Parliamentary Select Committee on Food and Agriculture assurances were given yet not a single exemption has been granted all year.
In fact, Mr. Rashad said, “we were told that when the exemptions law was passed, it was purely an oversight.”
While the Program Manager of CropLife Ghana appreciates government’s effort to restructure the exemptions act to raise revenue, he said it is absolutely necessary for government to categorically include agro-inputs in the exempted products.
“Agriculture is sensitive, and just like health and education, this sector should not be compromised,” he pleaded.
David Oware Ansong, Managing Director of Rainbow AgroSciences Ghana Ltd, suppliers of crop-protection products like herbicides and insecticides, added his voice to the call for immediate government intervention.
He revealed that the removal of exemptions on import duty, special import levy among other factors, have catapulted the cost of clearance to about three times of what was paid last year.
“Assuming your budget for clearing last year was 1 million cedis, then it means you have to have 3 million to do the same volume of business in 2023 and this is extremely high. It is important because it is affecting the cost of inputs. Farmers are now buying their inputs at a very high price and cost of production for the farmers has also gone up. Because of that some of them will cut down on the size of their land because if they do not have money to do a 10-acre they will have to reduce it to 5 acres,” he lamented.
Mr. Ansong intimated that unfortunately as businessmen, they will be compelled to pass on the cost which will eventually affect ordinary consumers and the cascading effect on purchasing power today is clear as daylight.
He said the figures from the Statistical Service presented a 50% inflation on the price of food, emphasizing the urgency needed to be attached to food security in the country.
