The government, through the ministry of agriculture, is in the process of introducing a new credit facility to increase access to funds for farmers.
The Ghana Based Risk Sharing Agriculture Lending Scheme (GIRSAL), a creation of the central bank, would encourage commercial banks to lend more to the agricultural sector.
“GIRSAL will be a de-risking instrument that provides bank guarantees, insurance, business advisory services and incentives to banks so as to increase lending to agriculture. Effectively, it is expected to ease the problem of agri-financing which has been a major bane and draw back to the development of agriculture,” Minister for Food and Agriculture Dr. Afriyie Akoto said.
He indicated that agriculture credit had almost collapsed, citing the sharp decline in funds allocated to the agricultural sector in recent years.
“In the past, about 18 per cent of credit given by commercial banks went into agriculture that has collapsed to 4 per cent in the past three or four years. The idea, therefore, is to bring it back to a certain reasonable level,” he stressed.
He was speaking at the 3rd Ghana Association of Agricultural Economists (GAAE) conference themed: “Sustainable Agriculture for National Development: Finance, Markets and Job Creation”, which was held in Accra.
He said among the interventions government was putting in place to shore up revenue from the agricultural sector is the creation of the Ghana Commodity Exchange which provides a trading floor for commodities.
“Closely aligned to this is the construction of 80 warehouses to increase the existing storage capacity of 34,000MT to 80,000MT by 2020 to address post harvest losses and potential loss of farming income,” he added.
Dr. Akoto further noted that under the government’s transformation agenda for agriculture, extension services are receiving massive attention through e-agriculture, recruitment and the provision of logistics for extension officers.
Also, he stated that the colleges of agriculture, with support from Canada and collaboration with the University of Cape Coast, are undergoing massive modernization and transformation through content development and infrastructural renewal.
He said the objective is to fully equip students with modern skills and capacity to support the growth of agriculture and promote entrepreneurship.