Govt to consider legislation to compel banks …to increase loans to farmers
The government is considering a legislation that will compel banks to increase their loan portfolios to farmers to help increase agricultural productivity in the country.
To this end, the Ministry of Food and Agriculture is developing a memo for the consideration of cabinet, the sector minister, Dr Owusu Afriyie Akoto, told the Ghanaian Times by phone on Wednesday.
This comes on the heels of unbridled rise in the cost of agricultural inputs, especially feeds for the poultry industry, and the reluctance of the banks to grant farmers loans to cushion them in these trying times.
The minister admitted that the cost of agricultural production had gone up and had been worsen by the disruption of the agriculture supply chain due to the Russia-Ukraine waras the bulk of chemical fertiliser was sourced from that country.
“From the policy point of view we are doing our best, we are doing what we can in subsidising agricultural inputs to support the farmers but the banks are not helping with working capital for the farmers,” he said.
“We are developing a memo to cabinet for approval for a legislation to make the banks grant loans to the farmers,” he added.
Dr Akoto said in Ghana loans by banks to farmers were about 3.4 per cent, half of it went to the License Buying Companies, with little left for the farmers.
He said in other African countries, loans granted to farmers were about 12 per cent and India was about 20 per cent.
Dr Akoto said for the economy to be transformed, there was the need for the banks to support farmers with the working capital to increase agricultural production for the needed transformation to take place.
While poultry farmers were complaining about the rise in the cost of maize, soya beans, wheat and other ingredients for the production of poultry feed, making it difficult to produce enough for the market, MoFA said there was production glut in the hinterland and some market operators were overpricing the grains in the urban centres under the pretext of high transportation cost.
In 2017, the government launched the Planting for Food and Jobs (PFJ) initiative with highly subsidised agricultural inputs to increase agricultural productivity and to halt the importation of some agricultural commodities to the tune of about twobillion dollars annually.
The Rearing for Food and Jobs was also launched to feed in on the PFJ in terms of supplying grains for the production of poultry feed.
Subsidised agricultural inputs, especially fertiliser under the PFJ, had often gone into wrong hands, with the government making a loss of $120m in diversion and unaccounted for fertilisers between 2017 and 2018, according to the report by the PFJ secretariat.
The government was now pushing for organic fertiliser to be procured locally so as to enhance food production.