Farmers Happy with New Agricultural Financing Initiative
Small holder farmers have expressed relief as they no longer have to source for expensive and unreliable funding for their farming activities. This was at the launch of the Ghana Warehouse Receipt Financing in Kumasi, the Ashanti Regional capital, a collaboration between the ARB Apex Bank, the Ghana Commodity Exchange (GCX), and the International Finance Corporation of the World Bank Group (IFC).
The farmers who expressed their happiness during the launch also acknowledged that the Warehouse Receipt Financing initiative will enable them to produce more without selling their produce at distress prices due to lack of funds for production.
A farmer from Wa in the Upper West Region, Hajia Abdulai Maimuna observed that access to credit from the Warehouse Receipt Financing present real opportunity for her and other colleague farmers to improve their livelihoods through increased production. She emphasized that “this will address one of our biggest challenges and when we secure loans from the banks after storing our grains at the warehouse, we will use the funds to reinvest in our farming business or other activities for extra income.”
Mr. Frederick Adomako, another farmer from Wenchi in the Bono East Region, also noted that the loan support will help him and other farmers to purchase agricultural inputs for their farming activities without necessarily selling off their grains at very low prices. “The financial support from the bank will help us buy the needed inputs for our farming”, he stated. Mr. Adomako further explained that “most often we borrow at high cost just to buy these things making our farming business unprofitable”.
The warehouse receipt is a document of title given to farmers after they store their produce in a certified warehouse. The farmers are then able to use the warehouse receipt as collateral to secure financial assistance from the Ghana Warehouse Receipt System (WRS) partner banks.
Addressing the key stakeholders including hundreds of farmers at the launch, the Country Lead for the IFC Ghana WRS Project Mrs. Doreen Oppan, stressed that the IFC would continue to jointly facilitate technical support, capacity development and education activities for the Rural and Community Banks and their network of farmers.
She added that “We will also aim at closer collaborations with key stakeholders to create a more robust legal and policy environment and also strengthen our work with state actors such as the Ghana Standards Authority, for the creation of a trusted regulatory entity for warehouse operations backed by the law.”
Mrs. Oppan stressed that it is the expectation of IFC that the lives of farmers would be positively impacted, postharvest loses would be minimized, trading would be more efficient and particularly the commitment by banks to finance warehouse receipts would deepen as it provides a trusted mechanism to finance the agriculture sector thereby strengthening the ecosystem for a successful Ghana Commodity Exchange.
The IFC Ghana WRS Project is being implemented in nine regions of the country with financial support from the Swiss Secretariat for Economic Affairs (SECO). The project is a technical assistance and advisory services project aimed at setting up a well-functioning regulated WRS that is expected to facilitate an increased access to credit to farmers and the supply chain, linkage to structured markets and reduction in post-harvest storage loses. This intervention focuses on supporting a well-functioning WRS as a necessary pre-condition for a successful implementation of the GCX. The project addresses WRS on a policy and regulatory level, system level, including technical advisory, training, capacity building and awareness raising for various stakeholders in the public and private sector.