‘Effective warehouse receipt system essential’

•   Mr.  Fifi Kwetey,

• Mr. Fifi Kwetey,

AN expert in agriculture has  called for the implemen-tation of an effective warehouse receipt system to ensure fair pricing in the agricultural sector.

Mr. Eric Osei-Owusu, Chief Executive Officer of the National Food Buffer Stock Company made the call during a panel discussion on the Ghana Journalists Association programme in Accra dubbed “Business Advocate” on Ghana Television.

According to a GNA report, the programme was supported by BUSAC Fund, DANIDA, United States Agency for International Development and the European Union.

He explained that the system entailed some documentation by warehouse operators as evidence that a specified commodity of stated quantity and quality had been deposited at a particular location, and enabled farmers to deposit storable goods, mostly grains, in exchange for a warehouse receipt.

Mr. Osei-Owusu noted that the system if well regulated, would curtail cheating on weights and measures, ease access to finance at all levels in the marketing chain, moderate seasonal price variability and promote instruments to mitigate price risks.

Speaking on the topic, “Enhancing Grains Pricing Policy in Ghana”, he said the absence of a national pricing policy in the sector had made it difficult to meet the standard of pricing mechanisms on the international market.

Mr. Osei-Owusu said extension officers should intensify education on new approaches to farming for farmers to improve their yields since the quality of farm produce was critical in determination pricing.

He said the pricing mechanism for grains was affected by storage and transport infrastructure in food markets, limited access to commodity finance, unstable marketing margins, risk of theft and difficulty in enforcing contracts.

The pricing of grains is of interest and importance to every family, individual and institutions, because their costs had implications for the budgets of households, institutions and businesses.

However, market forces do not determine the prices of grains. Grain sellers, poultry feed millers and private consumers are not able to compete with government due to huge discounts placed on grains purchased by government.

Fixed prices do not meet the operational cost of producers which in the long run affect farmers’ ability to produce on a large scale to meet local consumption.

Mr. Richard Djanie, Business Development and Outreach Manager for the Ghana Grains Council said the Council had been engaged in advocacy to enhance the grains pricing policy in the country.

He said the absence of a functioning commodity exchange in the country, as well as the absence of a standardised pricing mechanism in the grains sector, affected the quality of grains produced for consumption.

The Council was of the view that the quality of grains produced also struggle to compete with those in other parts of Africa where proper pricing mechanisms are largely determined by market forces.

Nii Quaye, Director in charge of Agriculture Business Unit at the Ministry of Food and Agriculture (MoFA), expressed worry about farmers’ inability to produce quality grains, which affected the pricing system, saying it behoved on farmers to improve upon the quality of their produce to meet global demands.

He called for effective collaboration between MoFA and the Ministry of Trade and Industry to engage stakeholders in the sector to chart the path for addressing the inefficiencies in the pricing system for optimum results.

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