Additional Financing to the Food System Resilience Program, Phase 2 Ghana

active

Prospective

The Government of Ghana has in the past supported farmers primarily through the provision of inputs subsidies. This was achieved through programs such as the government's Fertilizer Subsidy Program (FSP, 2008-2017), Planting for Food and Jobs (PFJ, 2017-2022), and the Ghana COVID-19 Alleviation and Revitalization of Enterprise Support (Ghana CARES). Subsidies provided by the PFJ program put the Government under a heavy fiscal burden. Excluding project-related expenditures, the cost of these subsidies represented half (51%) of expenditures of the Ministry of Food and Agriculture (MoFA). The PFJ has been linked to higher crop yields, but its implementation had some limitations such as high budget strain on the government, non-adoption of the value chain approach, limited access to agricultural credit, low prioritization of national strategic stock and limited focus on the needs of commercial small, medium, and large-scale farmers. Acknowledging the achievements and shortcomings of the PFJ implementation, the Government of Ghana in 2023 introduced the Planting for Food and Jobs program 2.0 (PFJ 2.0) which now shifts from a model of direct input subsidy to a smart agricultural input -credit system, linked to structured market arrangements.Under this Additional Financing (AF), the World Bank will support key areas of the PFJ 2.0 program, based on their importance in the country's policy priorities and their alignment with the repurposing agenda. These areas include the transformation of the tomato industry and the design and development of Ghana's Agriculture and Agribusiness Platform (GhAAP). The proposed Additional Financing will not affect the PDO or project components but rather add activities to components that are well aligned. The proposed AF will finance activities under components 1, 2, and 5, as described below. Component 1. Digital advisory services for agriculture and food crisis prevention and management (US$ 12 million AF). Sub-component 1.2: Strengthening Digital Hydromet and Agro-Advisory Services for Agriculture Producers, of the parent project, provide resources for (a) Improve the production of climate, hydromet, agromet, and impact-based information; (b) Support the timely delivery and use of essential agro-hydro-met information to key users; (c) Strengthen the institutional and financial sustainability of national institutions providing climate, hydromet, and agromet information. The proposal is to add two new activities to Sub-component 1.2 in support of the GhAAP; farmer registration and equipping the Network Operating Center (NOC) to run the digital platform. With GoG resources, MOFA has financed the development of some modules of the GhAAP platform. These include modules on farmer, aggregator, agro-input dealer, mechanization service provider. Activities to be financed with the AF include: (i) farmer registration (US$ 7.5 million), including the purchase of laptops for 261 District Departments and 16 Regional Departments and 50 District Extension Officers (DEOs), and 3,000 tablets for Agriculture Extension Agents (AEAs) and incentive payments to AEAs for farmer field registration; and (ii) developing of a NOC for the GhAAP (US$ 4.5 million), including procurement of both hard and software infrastructure for the NOC, documentation for NOC , monitoring and management tools, revamping IT unit, specialized trainings for MoFA IT (NOC) staff to enhance their skills in proactive monitoring, incident management, and emerging network technologies, collaboration, and knowledge sharing. Component 2. Sustainability and adaptive capacity of the food system’s productive base (US$ 1.97 million AF).Under Sub-component 2.1, Consolidate the Regional Agriculture Innovation Systems the parent project investments are for (a) Strengthen the national and regional agriculture research centers; (b) Deepening and expanding R&D networking; (c) Modernize national extension services; (d) Promote technology access and exchange. The proposal under the AF is to support a pilot on strengthening research and development (R&D), farm productivity and value addition in the tomato sector. The activities to be financed include: (i) conducting adaptive trials in Northern zone in order to evaluate new hybrid varieties (“ante dede”, tomato queen and “legon tomato”) tested in the coastal zone; (ii) multiplying local Open Pollinated Varieties (OPVs, namely “KOPIA” and Kwabena Kwabena”) and new hybrid varieties following successful adaptive trials; and (iii) conducting sensitization, training, and creating awareness of FBOs, input dealers, aggregators and marketers on improved characteristics of new varieties. In terms of farm productivity, activities to be financed include: (iv) providing input support to targeted tomato producers; and (v) strengthening extension services in targeted areas. In terms of value addition, activities to be financed include: (vi) providing small grants to tomato value chain actors in storage, processing, transportation, and marketing to support the acquisition of simple work equipment. The pilot will focus on the Northern Zones (Upper East, Northeast and Northern regions) where food and nutrition security, and climate resilience are priorities. It will impact 1,500 tomato producers on 500 hectares.Component 5. Project Management (US$1.8 million AF). Under this component, the AF will provide resources to supervise additional activities proposed and strengthen MoFA’s institutional capacity to run the PFJ 2.0 implementation model. Activities to be financed include: (i) setting-up a functional PFJ 2.0 unit in MoFA and (ii) operational costs of the FSRP PIU This will include: (i) building capacity of MOFA on legal and regulatory aspects related to PFJ 2.0 ; (ii) developing of Policy and Procedures manual to govern the operations of the Inputs Credit System; (iii) conducting feasibility study for establishment of Credit/Payment Guarantee Fund to support the program; (iv) establishing a Produce Pricing Mechanism, i.e., undertaking study and stakeholder engagement to establish market-based forward pricing mechanism for valuation of produce (commodities) for the in-kind repayment of input credit.

World Bank Group

Project

Fertilizers, Hydro, Consumer Products, Commercial, Raw Materials, Government, Automotive