NOVELTY SUBSIDY SCHEME INTRODUCED ...On heavy agric equipment (BACK PAGE, OCT 13, 2010)

THE government and its development partners have instituted a novelty scheme to provide subsidy on heavy agricultural equipment for farmers in the three northern regions and parts of the Brong Ahafo Region.
This is to give real meaning to the government’s agricultural modernisation policy and simultaneously accelerate the development of the northern sector to eradicate rural poverty.
Under the scheme, the cost of farm equipment such as tractors, planters, harvesters, threshers and ploughs will be subsidised between 40 and 60 per cent of the cost to enable the farmers to acquire it.
The scheme is being implemented under the Northern Rural Growth Programme (NRGP), which is a $104-million agricultural support project being co-funded by the International Fund for Agricultural Development (IFAD), African Development Bank (ADB) and the Government of Ghana.
Briefing the Daily Graphic on the initiative, the National Co-ordinator of the NRGP, Mr Roy Ayariga, said the subsidy on agricultural equipment was provided through the matching grant component of the NRGP.
“The NRGP will pay 40 to 60 per cent of the cost of the equipment as a grant to the farmer or farmer-based organisations (FBO),” he stated.
Mr Ayariga explained that to secure the grant, the farmer or FBO must get one of the banks working with the NRGP to approve a loan for the purchase of the equipment.
“The farmer will then be made to deposit 10 per cent of the cost of the equipment at the bank and the NRGP will give a grant to cover 40 per cent of the cost.
The bank will then provide the rest of the 50 per cent as a loan,” he explained.
Mr Ayariga noted that the money would not be given directly to the farmer or FBO to purchase the equipment because the money could be diverted or misused.
He said instead, the bank would deal with the equipment suppliers to purchase the equipment for the farmer, after which the farmer would begin repaying the 50 per cent cost that was provided by the bank as a loan.
The co-ordinator explained that the scheme had numerous advantages, one of which was that the financial institutions were willing to give out loans to the farmers because of the matching grant being provided by the NRGP.
The NRGP is an agricultural initiative that seeks to contribute to poverty reduction in northern Ghana through commodity chain development, rural infrastructural development and improved access to financial services by all stakeholders in the commodity value-chain.
Farmers in all the 38 districts in the Northern, Upper East and Upper West regions and five districts in the Brong Ahafo Region are benefiting from the programme.