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Year under review - More funding needed for agric sector --Stakeholders assess sector

BY: Ama Amankwah Baafi
Dr Owusu Afriyie Akoto, Minister of Food and Agriculture
Dr Owusu Afriyie Akoto, Minister of Food and Agriculture

The Chamber of Agribusiness has suggested the creation of ‘Ghana Agriculture Emergency and Disaster Fund’ by government to support farmers and processors so they can undertake sustainable production and supply to ensure food security.

The Chief Executive Officer of the Chamber of Agribusiness Ghana (CAG), Mr Anthony Morrison, said such a fund would help the nation store enough food to augment any shortages in case of a disaster.

Giving an overview of the performance of the sector in 2020, during an interview on December 19, 2020, he said such a fund, would a long way to mitigate some of the financing challenges .

He noted that the sector was susceptible to natural and artificial disasters, and that COVID-19 pandemic had an impact on agricultural productivity.

Read: Private investment needed in agricultural mechanisation - Review


Mr Morrison noted that it was time for serious strategic thinking for the sector as financing was still a challenge to the industry players.

“In a way, the Ghana Incentive-Based Risk-Sharing System for Agricultural Lending (GIRSAL) has come to provide some comfort but that cannot be said for the higher industry.

“We still think that the industry could attract different ways of investment. Maybe we should be looking at adopting a farm bill system so that any government that comes will work with that. We need to look at a long-term investment plan,” he explained.

Read: . Establish Agric Development Fund to support cottage industries


GIRSAL

GIRSAL is a non-bank financial institution incorporated as a private company in Ghana with an objective to de-risk agricultural financing by the financial institutions, by issuing agricultural credit guarantee instruments - to enhance the total amount of credit to the agricultural and agribusiness sectors.

GIRSAL's principal shareholder is the Ministry of Finance, and has seed funding from the Bank of Ghana and the African Development Bank (AfDB).

Read: Financing cost impedes agribusinesses in Africa


COVID and agric

Mr Morrison said COVID-19 had impacted both positively and negatively on the sector as it had helped a lot of people to innovative, efficient and effective.

He said there was a re-awakening and an increase in technology adoption due to COVID.


Impact of Planting for Food and Jobs

One of the transformation interventions in the sector is the Planting for Food and Jobs (PFJ) programme launched in 2017 and designed to address the myriad problems facing the agricultural sector remains the major programme aimed at the modernising the sector.

The objectives of the programme are to: ensure timely and adequate availability of elected food crops through improved productivity; provide job opportunities for the teeming unemployed youth; and create general awareness for all formal workers to have either farms or backyard gardens.

As of July this year, a total number of 1.5million farmers were registered with the programme, an increase from the initial enrolment figure of 202,000 farmers in the year of inception.

To enhance food production in the wake of COVID-19 and enable more farmers access inputs, an additional 300,000 farmers were registered onto the programme, increasing the number of beneficiaries from the initial target of 1.2 million to the current 1.5 million.


Stakeholder’s take

Mr Morrison, said the PFJ had served the agric sector from a marketing perspective and had also brought to light issues issue in the sector such as challenges and prospects.

He said although it had helped create some jobs, the kind of biting-in required of it to integrate the economy after three years was yet to be felt.

“This is an agric sector social intervention mechanism and its model was not properly done to create needed jobs for the pro-poor people. Rather, it has come in to help some level of medium scale commercial farmers more than the targeted people,” he said.

He said most smallholder farmers that the policy was to help did not actually experience the benefits, and which made it difficult to look at a major impact.


Researchers’ take

The West Africa Regional Coordinator of the Centre for Agriculture and Biosciences International (CABI), Dr Victor Attuquaye Clottey, noted COVID-19 had impacted the sector looking at the happenings globally.

He cited the transportation of produce from the farm gates to the markets as one of the challenges as they were less vehicular movements. Another challenge was the fact that while consumers were buying more, the markets were selling less.

Dr Clottey said there was also the fear of people aggregating when they had to farm, especially those who were knowledgeable about the transmission of the virus, hence they might not go to the farm at all, which would result in labour shortage.     

“We are already having challenges on the research front too. We have cancelled a lot of trainings for extension officers and farmers because we can’t put them together, but then we have to observe the protocols on the prevention of the virus,” he explained.

He said nationally, some funding to the agric sector might be diverted to the health and sanitation sectors judging from the enormity of the pandemic.


Some sector events

Available statistics show that the ADB Bank is the leader in agric financing in Ghana as of now. Last year, it gave out an amount of GHc489,186,792.00 to the agricultural sector of a total credit of GHC1,790,445,869.90.

The amount represents a market share of 30.99 per cent.

The Managing Director of the ADB, Dr John Kofi Mensah, on May 20, 2020 announced a planned investment of GH¢500 million to support the entire value chain along the local poultry industry through soft loans.

He said the initiative was in line with the bank’s strategic plan for 2020 to 2022, with a projection to dedicate 50 per cent of the bank’s loan portfolio to the agric sector.

He said beneficiary companies would receive between GH1.5 million and GH9 million at an interest rate at below 10 per cent.


Egg glut

Meanwhile, in the year under review, COVID-19 dealt a big blow to the poultry sector following the egg glut that hit the country.

Demand for eggs dropped sharply because of lack of buyers which compelled the famers to lower their prices.

The major customers of eggs, namely, the educational institutions, hoteliers and other food vendors shut down due to COVID-19 disease and the subsequent restrictions imposed on them and so demand for eggs reduced drastically.

“This is a total loss. We are only incurring losses. Government should intervene immediately to enable us farmers and all players along the value chain to sustain the sector. We need some flexibility especially at this time to diversify our businesses. At least, we can decide to go into broiler production,” the Chief Executive Officer of Boris B’s Farms and Veterinary Supplies Ghana Ltd, Dr Boris Baidoo, stated.


Farmers day  

In spite of the COVID-19 pandemic, a  total of 135 distinguished farmers were honoured on November 6, 2020, on the occasion of this year’s National Farmers Day held in Techiman, the Bono East Regional capital. Fifty-five-year-old Mr Solomon Kusi won the national best farmer.

The celebration of this year’s Farmers Day was on the theme: “Agribusiness Development under COVID-19 – Opportunities and Challenges.”


Tree Crops Authority

In another development, during the year,  the Tree Crops Development Authority (TCDA), with headquarters in Kumasi in the Ashanti Region was established with the aim to spearhead the diversification of  country’s agricultural sector, with a focus on the development of tree crops and the consequential benefits to accrue to the country.

It will start with six out of the seven tree crops being promoted by the PERD programme — cashew, oil palm, shea, coconut, mango and rubber.

To operate along the lines of the Cocoa Marketing Board (COCOBOD), the TCDA will draw policies and programmes to guide research into, the production, pricing and marketing of tree crops.

A 29-member Board of Directors of the authority, chaired by Mr Stephen Sekyere-Abankwa, was also inaugurated.

The authority is to position the country to earn about $16 billion annually from six selected tree crops from 2028, the Minister of Food and Agriculture.

It is estimated that the figure could double if a substantial portion of the products is processed for export.