Dr. Owusu Afriyie Akoto, the Minister of Food and Agriculture, has announced that the government would shortly propose a bill to Parliament for approval that will oblige commercial banks in Ghana to lend to farmers.
He said that while the government has done its part in assisting farmers by subsidizing inputs, banks would have to play a role in securing the country's long-term food production by providing loans to farmers and other participants in the industry.
Dr. Afriyie Akoto stated that Ghana would not be the first country to enact such legislation, citing India as an example, which he claims has been doing so for more than 30 years.
He made these remarks on a weekend visit to several commercial farms in the Eastern Region, which was filmed by TV3's Eastern Regional Correspondent Yvonne Neequaye.
He went on to say that the cost of farming has risen owing to reasons outside the government's control.
"When we visited with the poultry producers, it was clear that the price of chicken feeds, which account for 70% of the total cost of production, had increased. Prices have risen dramatically this year in January, February, March, April, and May when compared to the same period in 2021, 2020, and 2019. They've risen because the cost of chemicals has increased by two or three times, implying that the cost of production has increased as well.
He made these remarks on a weekend visit of several commercial farms in the Eastern Region, which was filmed by TV3's Eastern Regional Correspondent Yvonne.
"At the same time, gasoline prices have tripled, implying that transportation costs from the farm gate to consumer centers have increased as well." So, these are external elements over which we have no influence, and which have a significant impact on price formation.
"The problem is that as a result, the cost of doing business in agriculture has increased, which is why, for example, poultry producers who used to raise 150,000 birds have now decreased their flock to 50,000 since their working capital can no longer sustain the new higher pricing."
That is where the banks have failed us in agriculture, since the banks that do business with these poultry farmers should be able to provide them with credit to allow them to maintain or even improve their output levels.
"Unfortunately, the banks have stayed away, and as a result, they have had to lower output levels." Their view was that the government had done nothing despite everything that was going on. [However], we spent almost an hour and a half explaining to them what the government is doing to attempt to correct the problem. Following the explanation, it was clear that they were quite pleased with our efforts.
"We are putting up a lot of effort to guarantee that commercial banks are brought in, including the prospect of enacting laws requiring commercial banks to lend a percentage of their portfolio to farmers and others in the value chain, such as processors and others." We wouldn't be the first country to do so; India has been doing so for more than 30 years.
"So you will surely hear something in Parliament regarding this subject, as a way of ensuring that commercial banks play their job, because the government is playing its duty by subsidizing inputs and fertilizer, and the banks should be allowed to lend to agriculture," he says.
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