Agriculture

Promotion of Market Oriented Agriculture in Ghana

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Many families in Ghana’s rural areas rely on crops and livestock for their income. Most smallholder farmers are still living in poverty, despite positive trends in global development drivers such as increasing population, per capita earnings, and changing nutritional choices in the urban population. Comparatively less agricultural produce is sold, and fewer farmers attend marketplaces, in rural regions than in peri-urban ones. Poor quality and high cost of inputs, high transportation expenses, excessive market charges, and incorrect market information all work against market participation at the village level. Strategies are proposed to increase the provision of market information and to boost value addition and the availability of inputs in rural areas.

Quality of Agricultural Products of Ghana

The economy of Ghana is the second biggest in all of West Africa. Steady economic development has been the result of political stability and favorable economic circumstances, although it is reliant on just a handful of goods. A lot of Ghana’s agricultural goods are not competitive on the national or international level due to poor production and quality.

Smallholder farmers in Ghana have been responsible for producing the vast majority of the country’s agricultural output. Particularly, they often lack access to resources (agricultural machinery, agricultural input), funding, and marketing relationships. As a result, plant diseases and pests may proliferate unchecked, resulting in a poor crop. The quality of the product is further diminished by inadequate storage and transportation. Furthermore, the supply of high-quality raw materials is inconsistent, and the food processing industry lacks the necessary capital and technical expertise. Mangoes, cashews, pineapples, and spices are among Ghana’s most exportable commodities, but the country is not making the most of its production potential, and the middle class relies heavily on imports because of rising expectations for food quality.

Market Oriented Agriculture Programme (MOAP)

Using targeted value chains, the Market Oriented Agriculture Programme (MOAP) supports seed and tree nursery businesses, farm operations, wholesalers, retailers, processors, and exporters. All the way up the value chain, product quality improves, earnings go up, and new jobs are created as a consequence.

Improved output and quality are the results of training farmers in best practices and quality standards, as well as the expansion of specialized private service providers. The initiative also promotes inclusive business models that help smallholder farmers sell their goods and earn a steady income. The improvement of manufacturing methods, use of mechanization such as agricultural machinery and farm implements and food safety, as well as the creation and promotion of new goods, are essential goals. By strengthening local communities via capacity training and strong interaction with the corporate sector, MOAP fosters an enabling environment for sustainable investment where the private sector, such as tractor dealers like Tractor Provider, can pour in and provide desired agricultural machinery to smallholder farmers and agricultural infrastructure including irrigation systems, warehouses, and transportation.

Market Access to Smallholder farmers

The agriculture industry benefits from increased market access, the development of new employment, and greater wages as a result of increased productivity and quality in the supported value chains. During times of the year when their stable food supplies are exhausted, the development of high-value cash crops improves the food security of smallholder farmers. Numerous farmers have earned certifications from respected worldwide sustainability organizations. The ability to sell their products throughout Europe and to provide organic standards to processing firms has been made possible by this expansion into new markets. They were able to secure long-term contracts with their biggest customers and price increases of up to 100% after obtaining certification.

Need for agricultural Mechanization

Farmers on tiny plots of land now have a greater need for mechanization as a result of improved access to markets. In order to boost agricultural production, smallholder farmers in Ghana are in dire need of state-of-the-art agricultural machinery. Local areas with favorable agro-ecological conditions for tractor use, where farm implements and labor-saving technology are more appealing to farmers, and where some farmers can afford to invest in tractors would see the greatest uptick in demand for agricultural machinery and mechanization, especially for land preparation.

Role Tractor Provider could play

One of the leading tractor dealers in Ghana, Tractor Provider stocks popular brands including Massey Ferguson tractors for sale and New Holland tractors for sale. Tractor Provider has a variety of farm implements that might be useful to Ghanaian farmers. Due to its usefulness in a wide range of agricultural contexts, such as harvesting, land preparation and land preservation, the usage of such technology may help farmers save time, resources, and money.

Lack of Financing in the Agriculture Sector in Ghana

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Finance opportunities are critical to the expansion of Ghana’s agricultural industry, particularly for the purchase of working capital (seedlings, farm fertilizer, and labor) and fixed capital (agricultural machinery). Due to a lack of available funds, farmers are unable to cultivate as much land as they would want which slows agricultural expansion and has repercussions for the economy as a whole. Banking institutions, rural banks, S&Ls, and microfinance organizations are all active participants in Ghana’s agricultural financing landscape. However, it is becoming more and more difficult for Ghanaian farmers to convince banks to provide financing. They have had several “painful experiences” over the years attempting to convince lenders to give their business a loan.

The agricultural industry is in decline

The agricultural sector of Ghana’s economy continues to decline in importance. It is also contributing less and less to GDP. The contribution of the industry to national growth has dropped by more than half during the last decade. Growth in the sector is hindered by a lack of available capital for the purchase of modern agricultural machinery, chemicals, and seedlings, despite the sector’s high potential given Ghana’s expanding population for domestic consumption and the creation of the African Continental Free Trade Area for exports. This is especially difficult for financially strapped smallholder farmers who lack access to essential supplies. Those who have tried to get financing via banks have had their requests consistently denied.

The Trust deficit

The underlying problem is that banks do not have faith in the reliability of local farmers. Mistrust between smallholder farmers and banks creates hurdles for securing loans and credits. Indicators of financial institutions’ lack of faith include the imposition of onerous requirements for obtaining loans (such as excessive collateral, guarantors, a sizable amount of savings capital, and a high-interest rate for agriculture loans), as well as the imposition of lengthy delays and cumbersome bureaucratic processes. Farmers’ access to financing for investments in modern technology and agricultural machinery may be greatly improved by a legislative environment and frameworks that encourage such investments, as with warehouse receipt systems.

The farmers are discouraged by the use of slow loan processing techniques. The inability of farmers to repay loans after experiencing harvest failures or post-harvest losses in an unstable industry is a major source of distrust among farmers. Even with the risk of post-harvest losses, it is still viable to provide farmers with credit based on their repayment potential. Investing in the kinds of cutting-edge technology and climate-smart farming practices that smallholders are seeking is one of the greatest ways to decrease post-harvest losses and infuse predictability into the agricultural industry.

Schemes for providing finance to farmers

To aid farmers, a few programs have been launched, with mixed results. To reduce the inherent dangers of agricultural finance and to encourage more banking institutions to lend to the agricultural sector, the Ghana Incentive-Based Risk Sharing Agricultural Lending (GIRSAL) program was launched in 2018. As part of its mission, the aspirational non-bank financial institution was tasked with guaranteeing the loans of other financial institutions that extended credit to farmers for purchasing agricultural machinery, farm implements, tractors and agricultural input, as well as providing those institutions with technical assistance they needed to increase their familiarity with the agricultural industry and proficiency in evaluating and structuring loan applications. The system is a joint effort of the Bank of Ghana, the Ministry of Finance, the Agricultural Development Bank (ADB), and the Africa Development Bank (AfDB).

The group has also been quite good at spreading the word about what it does throughout the agricultural community. The program has made heavy use of social media outlets like Facebook and Twitter to inform the general public about its progress. GIRSAL has assisted farmers in the following value chains: horticulture, cereals, tree crops, roots & tubers, legumes, poultry, fisheries, and animals. Although GIRSAL does exist, this in no way indicates that its activities and actions are ubiquitous. In addition to the distrust that still exists between smallholders and banks, there is also a lack of smallholders’ familiarity with GIRSAL and the program’s mechanics. Smallholder farmers are likely to leave the bank empty-handed once again if greater resources and a reinvigorated PR effort on behalf of GIRSAL are not made available, in addition to a complete reform of banking operations.

Conclusion

As of yet, smallholder farmers in rural Ghana have little access to and benefit from agricultural finance. For existing financial institutions to expand their services into rural areas and for new players to emerge, the government must first set in motion the necessary legal frameworks and make the necessary adjustments to the financial sector. Tractors Farming in Ghana might be more productive if farmers had access to the many types of farm implements, tractors, and other agricultural machinery that are available for purchase in the country at Tractor Provider. Massey Ferguson tractors for sale and New Holland tractors for sale, as well as combine harvesters, are among the agricultural machinery that is available at a reasonable price at Tractor Provider.