Financing solutions tailored to specific parts of the value chain are vital to improve farmers’ access to finance. Warehouse receipt financing provides one such tool. It enables the post-harvest part of the chain to work more efficiently, while farmers who can access warehouse receipt finance have more flexibility in the timing of their sales. Farmers in Ghana face significant obstacles in selling their agricultural products, including unstable prices, poor infrastructure, limited market information and lack of market access.
During recent focus group discussions (FGD) conducted for representatives of youth groups in northern and southern Ghana under the theme: Youth Exploring Warehousing and Market Potentials in Ghana, participants were generally appreciative of such structures having the potential to minimise post-harvest losses. A representative from the Centre for Agribusiness Development and Research (CAADER) opined that farmers throughout the developing world face considerable challenges in accessing finance, and this can often influence their decision-making. For instance, even if they know they should not sell soon after harvest, when prices are typically low, they are often forced to sell because they need the cash to meet their family basic needs. The representative further suggested that these challenges must be addressed with financing solutions tailored to the different actors of the agricultural value chain. Warehouse receipt financing enables the post-harvest part of the value chain to function more efficiently and is a potentially useful tool for helping farmers access to funding. A facility of this nature has potential to make agriculture attractive to the youth.
The workshops were organised by Syecomp Ghana Ltd as part of activities under a grant activity: Improving Approaches to Mainstreaming Gender in Ghana’s Youth Policy and Youth in Agriculture Programme: Focus on Climate-Smart Agriculture and Market-Oriented Value Chains; and sponsored by the USAID|Ghana Feed the Future Agriculture Policy Support Project, which is being implemented by Chemonics International Inc. (USA).
A representative from the International Centre for Soil Fertility and Agricultural Development (IFDC) shared the view that if farmers have access to warehouse receipt finance, it gives them flexibility in timing their sales. Instead of selling their crops to meet immediate cash-flow needs, they can store them and pledge them as collateral for a loan, and postpone selling to a later date when prices are supposed to be higher.
A representative from the Women in Agriculture Development Directorate (WIAD) shared the observation that many farmers and breeders in Ghana face significant difficulty when trying to bring their products to market. They also complain about the low level of profit that they are able to earn from their products. One constantly hears complaints that “prices are too low,” “erratic price fluctuations,” as well as reports that denounce “unstructured markets” and “disorganised supply chains”.
Another representative from GuzaKuza submitted that in order to confront these difficulties, farmers, breeders and their institutions need to develop collective and individual strategies. An improved and structured market for farm commodities is noted to be a cornerstone of agricultural productivity.
This is the 11th in a 12-series blog (articles) to espouse the context of the Position Paper on effectively mainstreaming Gender and Youth in Agriculture in Ghana with support from USAID/Ghana Feed the Future Agriculture Policy Support Project (USAID/APSP)
Author: Syecomp Ghana Ltd
Email the author: Projects@syecomp.com
The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.