Rising costs of agricultural inputs, particularly fertiliser, are putting increasing pressure on farmers’ incomes and could discourage them from maintaining or expanding production, an agriculture expert has warned.
Mr Daniel Fahene Acquaye, Founder and Chief Executive Officer of Agri-Impact Group, said the high cost of inputs is making farming increasingly difficult for producers who often had limited control over the prices at which they sold their produce.
He said when the cost of producing crops increased but market prices remained relatively unchanged, farmers could be forced to operate at very low margins or incur losses.
“When the farmer’s cost of production goes up and the farmer goes to the market and the price has not changed, the farmer is losing,” he said.
Mr Acquaye said persistent losses could influence farmers’ decisions in subsequent farming seasons, with some potentially reducing the size of their farms or investing less in inputs.
He said such decisions could eventually affect the volume of food produced locally.
Fertiliser remains one of the major inputs required by farmers to improve soil fertility and crop yields, but increases in its cost can significantly affect the overall cost of production.
Mr Acquaye said farmers who could no longer afford the required quantities of fertiliser might reduce their application, which could affect productivity.
Others, he said, might reduce the acreage cultivated in order to limit their financial exposure.
“The farmer will say, if I cultivated 10 acres last year and I made a loss, this year I will cultivate five acres,” he said.
He said while such a decision might help an individual farmer to reduce losses, widespread reductions in cultivated areas could have implications for food availability.
Mr Acquaye said a sustained reduction in production could create supply challenges, particularly if demand for food continued to grow.
He said Ghana could subsequently become more reliant on food imports to make up for shortfalls in domestic production.
That, he said, could expose consumers to higher prices, especially when international commodity prices, transportation costs and exchange-rate movements increased.
Mr Acquaye said it was therefore important to ensure that farmers had access to agricultural inputs at prices that allowed them to produce profitably.
He called for measures to improve the efficiency of the agricultural input supply chain and reduce unnecessary costs that were eventually transferred to farmers.
The agriculture expert said efforts to increase food production should go beyond encouraging farmers to cultivate more land.
He said the focus should also be on ensuring that farming remained economically viable for producers.
“Farmers will continue to produce when there is money in it. If they consistently make losses, they will naturally reduce their production,” he said.
Mr Acquaye said access to affordable agricultural finance, improved input distribution, stronger market linkages and better prices for farmers could help improve the profitability of farming.
He also called for stronger linkages between farmers and off-takers to provide more predictable markets for agricultural produce.
He said such measures would give farmers greater confidence to invest in inputs and expand production.
Mr Acquaye said supporting farmers to remain productive was critical to strengthening Ghana’s food security and reducing the need to rely heavily on imported food.
He said the cost of agricultural inputs should therefore be treated as a key consideration in policies aimed at increasing domestic food production.
