Ghana needs an innovative agric-financing policy

The fortunes of Ghana’s once budding agriculture sector has for some time now taken a nosedive and yet to recover to appreciable levels.

The agric sector, under successive government regimes, upon return to constitutional rule, in the early 90’s, have  remained under-resourced, the ripple effect of it is now what is being realised.

In the past, the agriculture sector was christened as the ‘’mainstay” of the Ghanaian economy but the current situation tells a ‘ghostly’ different story.

Statistics’ from 1970 to 2015 affirms how we have failed to pay close attention as a nation towards the development of agriculture sector.

During the 1970’s agriculture contribution to Ghana’s Gross Domestic Product (GDP) was a little of over 40% but at the moment has declined to 19.7%.

Currently, agriculture workforce represents 42% of the total population but crawling in 3.9% growth in the 3rd quarter of 2015.

AU Heads of State and Government adopted the Malabo Declaration on Accelerated Agriculture Growth and Transformation for Shared Prosperity and Improved Livelihoods.

 

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However, the declaration, which compels member states to allocate 10% of its national budget to the agriculture development, has been overlooked in the disbursement of monies to the agric sector. For instance government in the 2016 budgetary statement allocated only 3% contrary to the agreed 10% to the agric sector.

Lack of credit facilities for farmers and other actors in the agriculture sector has had negative effect particularly on food production.

Many financial institutions are reluctant to grant credit facilities to farmers who meet the necessary requirements under the excuse that agri-financing is a high risk venture.

Agriculture Development Bank ADB, which was established in 1965 purposefully for assisting farmers with such credit facilities through development and modernization of agriculture support, merely offers finance to farmers.

The unwillingness on the part of most banks to grant credit facilities to farmers to maximize their yields to feed the country may soon plunge the country into food insecurity.

It is against these development that the Dean of the Faculty of Agribusiness and Communication Science of the University of Development Studies, Professor Amin Alhassan, has expressed worry over the attitude of financial institutions towards agri-industry.

Addressing a section of agricultural journalists at an advocacy training organized by the USAID Feed the Future programme, at Fumesua, for some selected members of GARDJA and Ghana Independent Broadcasting Association (GIBA) opined the need for the Bank of Ghana to develop a policy to sustain agriculture in our time.

“Agric-financing is a very major policy issue it is not about farmers but is about the policy arrangement that will make agric financing such a very important aspect of the micro-economy,” he stated.

He stressed that the country needs to develop a special financing scheme that will take into consideration the nature of farming.

Prof Amin proposed that it will be prudent for the financial institution to adopt agriculture funding policy in the development and mechanization of agriculture through a very lending rate to farmers in the country similar to what pertains in developed countries.

Attached is Audio of Professor Amin Alhassan

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