‘Market-Smart’ Subsidies? Analyzing the Agricultural Input Dealer Sector in Ghana

In recent years, many governments in Sub Saharan African have adopted policies of subsidizing agricultural inputs, especially inorganic fertilizer, to boost agricultural productivity as food security becomes of increasing concern. However, in the past subsidy programs have been poorly implemented and inefficient. Since 2008, the government of Ghana has instituted a voucher-based fertilizer subsidy program—but one in which government has left sourcing and distribution of fertilizer to the private agricultural input dealer sector. The general belief is that through engagement of the private sector, the subsidy program is not disruptive to the private markets. However, key characteristics of the agricultural input dealer network, such as the number of dealers, what inputs they sell, the level of horizontal or vertical integration with other dealers, the level of competition and other marketing practices in the sector were not considered when formulating the rules of the public private partnership.

On March 1, 2010, Dr. Afua Branoah Banful, a postdoctoral research fellow with the International Food Policy Research Institute, presented her latest research on the structure and business practices of the agricultural input dealer network in Ghana, a private public partnership, and how effective it is at serving farmers dispersed throughout the country while stimulating growth in the private fertilizer retail sector. Dr. Ernest Aryeetey, director of the Africa Growth Initiative at Brookings, moderated the discussion among participants following Banful’s remarks.

View the event summary »