Graphic Business News

Agric subsidy policy needs structuring — Oteng-Gyasi

By: Ama Amankwah Baafi
Mr Edward Kareweh — General Secretary,  General Agricultural Workers Union
Mr Edward Kareweh — General Secretary, General Agricultural Workers Union

THE Chief Executive Officer (CEO) of Tropical Cables and Conductors Limited, Dr Tony Oteng-Gyasi, has said it is about time the country structured agricultural subsidies to encourage production.

He said the current strategy of subsidising inputs did not guarantee that the country would get to the production stage.

Speaking at the GRAPHIC BUSINESS / Stanbic Bank Breakfast meeting in Accra, he expressed concern about inefficiency, leakages and diversion of subsidised inputs; citing instances where subsidised fertilisers are smuggled to neighbouring countries (because it is cheaper here) and been used to grow marijuana.

“If you structure your subsidy such that you subsidise only products, that is if I will buy all the maize you produce at a price that will give you money—you know that until you produce the maize you don’t get money. So, whatever you will do to produce you will do it,” he said.

He recalled that in colonial times, cocoa became a billion-dollar industry in Ghana because all that farmers were guaranteed was a certain price, and that once the farmers knew that they could grow cocoa and get the price that could buy them a house, they did everything to produce it. 

“No nation has fed itself successfully without agricultural subsidy. The United States of America (USA) is paying money for finished products not for inputs. If you look at the amount of subsidies that have gone into tractors in Ghana, if we used all of them to plough, we would have ploughed the entire country many times over,” he stated.

He indicated that subsidies were good in any economy, but how it was structured was critical.

Planning well
Dr Oteng-Gyasi said the country had had to go back to do what it did 30 – 40 years ago because it refused to plan and there was no collaboration between the government and industry.

According to him, the basic principle of a national strategy for industrialisation, pursued in line with the local people and people in industry also applied to agricultural production.

“The way we have treated our farmers is atrocious – we have not given any regard to them and their efforts, we haven’t helped them, we haven’t made it possible for them to enjoy anything like a good life, yet we expect that their children should stay in the village and continue to do so,” he stated.

He indicated that  the same methods of production needed to be applied easily to the agricultural sector.

The country always complained that Malaysia took the palm tree from Ghana and had transformed it into a billion-dollar industry, but it was same as the history of cocoa being made a billion-dollar industry, he added.

“What happened when Tetteh Quarshie brought his cocoa? How was it done? What did the economic policymakers of the day do to turn cocoa into a billion-dollar industry? If we get the answers right, there lies the way to industrialisation,” he stated.

Creating the environment
The Senior Minister, Mr Yaw Osafo-Maafo, said it was important to create an environment for agriculture to thrive because manufacturing could not stand on its own.

He said agricultural transformation was key because it was going to be the source of raw material to feed industry.

“Identify your advantages and develop it – so your raw material becomes important and we can be identified as a manufacturer, as a producer. Let us anchor on the one-district, one-factory (1D1F) on raw materials within a catchment area and market,” he said.

In this way,  the problem of unemployment could be solved in a practical way through production.

“We can only produce surpluses to be able to process without any hindrances. Post-harvest losses can be resolved through processing and technology. We need to sanitise our warehousing system. Some excesses will support industrialisation while others will not,” he added.