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Adapt to food crop prices not failure of PFJ

 


On Walk 16, 2022, My spouse and i watched a Youtube-video in which the Minister of Foodstuff and Agriculture, Doctor Owusu Afriyie Akoto, was being evaluated on the local tv set programme, the Citi Breakfast Show. Throughout the interview, the host wonderful co-host sought to suggest that the Sowing for Food & Jobs (PFJ) coverage had failed or was ineffective because food prices were increasing, an debate I use heard some Ghanaians make. In order to add to the rebuttal by the sector minister, Selection to put this article together to show why or how food plants prices can increase, despite the boosts in food plants production contributed to by the PFJ policy.

The PFJ policy have not been unsuccessful, and so it is either those who make the argument do not really understand how the policy works or their debate is made for propaganda purposes, by simply looking at the plants production data without firm economics thinking. I think nearly all of the folks make that argument based on the latter. Inside phrases of how the policy works and also the aim of the PFJ, generally, the policy was rolled out by the federal government to promote agriculture as a way of employment for Ghanaians, especially the junior. Another aim of PFJ is to increase food creation or for food security purposes, as well as reduce the importation of some of our staple food vegetation.

The policy opened in April 2017 and in range with the Foods and Agriculture Corporation Corporate Statistical Info (FAOSTAT) data, Ghana's production of vegetation such maize, plantain, cassava, rice (both paddy and milled) and yam increased between 2017 and 2020 when compared to earlier years (see the crop production graphs below). Using the previously mentioned crops being mainly total annual crops (although plantain take little bit over a 12-month period), the increase in crop manufacturing between 2017 and 2020 can be said to be a reflection of the contribution by the PFJ plan.

Therefore, the question is, how come there are increases in harvest production, but food crop prices are increasing? The answer(s) is simple: accept farm related costs, commensurate increase in food crop demand and the truth that farmers have time to sell to any buyer willing to offer the maximum price. From agricultural/farm economics theory viewpoint, maqui berry farmers (commercial farmers) are price-takers, as well as profit maximisers. As price-takers, maqui berry farmers do not have control of the prices of risk-reducing inputs like fertilisers and agro-chemicals. Even though these inputs are subsidised under the PFJ policy, accept the prices of these inputs still translates into increased farm costs because the share of price paid by maqui berry farmers also increase. Imagine who pays for the increased plantation cost.

To show why food harvest prices cannot stay at pre-PFJ levels due to raises in farm costs, brought about by increases in plantation input prices, the distinctions in fertilizer costs in 2016 and 2021, as representative of plantation costs in those years, were approximated to further show why food harvest prices have increased, despite increases in crop production under PFJ. Even though estimates are in US bucks per hectare or per acre, those who want to view the cost in Ghana cedis can use the trade rates for the two different years.

The estimates demonstrated that 2021 fertilizer cost increased by at least seventy per cent in 2021, compared to 2016 cost estimations, which have shown in the increase in food harvest prices we are seeing today. Yet another way of analysing the problem is through break-even analysis and in farm economics, one of the metrics for such evaluation is the Break-Even Ratio (BER), which more or less measures the stability of input use. The BER is estimated by separating price of the plantation input by the value of the crop produced.

Within phrases of fertilizer use, the COUFFIN is the expense of the fertiliser divided by the value of the crop produced, and it signifies the amount of crop yield needed to pay for a kilogramme of fertiliser nutrient. Essentially, which means that under a scenario of fertilizer price increase, the farmer will require a huge increase in produce to be able to break even, with little increase in the harvest price; if not, the farmer has to raise the harvest price in order to crack even. Considering the quantity of inputs used by a character to produce one crop, it means whenever there are considerable increases in input prices, like we will definitely find now, maqui berry farmers have to raise the associated with their produce to at least make your money back.

Its well worth noting that, the PFJ policy was not rolled out there by the govt to buy every tonne of plant produced by each farmer subscribed to the programme, this means farmers are free to trade their produce to the buyer. Therefore, as revenue maximisers, farmers will incorporate resources to produce a plant (e. g. maize), to generate the maximum profit possible. This means that regardless of level of output (low or high), sufficient reason for increased demand for food crops, farmers promote their produce to the person offering the best price. In addition, within profit maximisation, any increase in farm and travel cost is utilized in the consumer through embrace food plant prices.

So, to conclude, the PFJ has written for increase in food crop production and that is an undeniable fact! With a market environment like Ghana's, food prices can increase even under increased food plant production, in particular when there is commensurate demand, farmers have time to sell to the 'highest bidder' and any increase in farm related costs (inputs and transportation) is handed on to the buyer. That does not mean the Seeding for As well as Jobs insurance plan is unsucssesful!

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