Subsidy Management in Agriculture

Application of granular fertilizer on seedlings

Subsidy systems have been a mainstay of development countries government's long-term policy of promoting social equity and political stability. This policy attempts at sharing national natural resource wealth (Akhter, et al., 2001)

Governments in most Developing Economies offer social interventions through subsidy systems. It is estimated that Africa loses the equivalent of $4 billion worth of soil nutrients annually, thereby weakening its capacity to sustain plant life. Given the poor natural attributes of the soils, coupled with poor management practices, there is consensus that significant increase in inorganic fertilizer use is necessary to restore and maintain their fertility in order to enhance productivity. (Minot & Benson, 2009)

To tackle the inefficiencies in the subsidy distribution programmes, systems must be put in place to arrest the bottlenecks such as fraud, diversion, etc.

In order to develop successful systems, identifying user requirements is essential. These requirements have to be taken into consideration carefully as design issues by application developers (Kruchten, 2004). Meeting the requirements for a subsidy distribution system involves achieving varying objectives as technological, organizational and social objectives. In such enterprise systems, emphasis should be placed on the importance of modelling the business before eliciting its requirements (Al-Debei & Avison, 2010)

According to Safaricom CEO Bob Collymore, “Mobile technology has the ability to revolutionise traditional distribution models. This turn-key solution will transform the operations of businesses across Kenya,”

With the introduction of an electronic voucher system, registered farmers are able to purchase the subsidised inputs from authorised retailers and distributors. The entire chain of a transaction can be tracked electronically thereby reducing fraudulent purchases and making reconciliation easier for stakeholders.

In India, the government’s decision to change the contour of giving fertiliser subsidy to companies on actual sales made to farmers through point of sale (PoS) devices is aimed at streamlining the annual subsidy it gives to the sector. (Sally, 2018). The system is also aimed at preventing over-invoicing, plugging leakages, reduction in diversion, ensure that supply chain losses will be the responsibility of the fertiliser company, predict real-time demand and track actual utilisation by farmers. (Sally, 2018)

A careful consideration of Checkland’s “soft system methodology, a process which allows a group of actors who are faced with a common problem to solve it in a collective learning process” (Checkland, 1981) in the subsidy distribution system will ensure that experiences and concerns of all actors in the chain are considered by implementors before implementation. Thus, the design of a human activity system for collective action. The soft system is a social construct and hence actors such as researchers, extension workers and farmers cannot normally be considered as a system. They can be formed as a system if they link together and contribute to the performance of the system. (Checkland & S, 1998)

It is the expectation of the Ministry of Food and Agriculture, Ghana that the present application rate of 12kg per hectare will increase to 20kg/ha projected in the Abuja declaration of fertilizer use by the African Green Revolution with the full implementation of the programme. (Akatey, 2015)

References

Akatey, N. K., 2015. Government of Ghana. [Online]
Available at: http://ghana.gov.gh/index.php/media-center/features/1153-the-launch-of-the-agric-fertilizer-subsidy-programme-and-the-way-forward&gws_rd=cr&ei=WbWqWOOlKcS2abj-vYAL
[Accessed 9 June 2018].

Akhter, A. U., E, H. B. & Gutner, T. a. H. L., 2001. The Egyptian food subsidy system: Structure, performance, and options for reform. IFPRI Briefs, Volume 119.

Al-Debei, M. M. & Avison, D., 2010. Developing a unified framework of the business model concept. European Journal of Information Systems, 19(3).

Checkland, P., 1981. Systems Thinking, Systems Practice. Chichester: John Wiley & Sons.

Checkland, P. & S, H., 1998. Information, systems and information systems: making sense of the field. Chichester: John Wiley and Sons.

Kruchten, P., 2004. The Rational Unified Process: An Introduction. 3rd ed. s.l.:Addison-Wesley Professional.

Minot, N. W. & Benson, T., 2009. Fertilizer subsidies in Africa: Are vouchers the answer?. International Food Policy Research Institute (IFPRI), Issue briefs, January, Issue 60, p. 8.

Sally, M., 2018. The Economic Times- India. [Online]
Available at: https://economictimes.indiatimes.com/news/economy/agriculture/need-to-improve-infrastructure-to-prevent-leakage-in-fertiliser-subsidy-study/articleshow/63944044.cms
[Accessed 10 June 2018].