Boost for farmers - President launches
commodity platform
Akufo-Addo unveiling the plaque to launch the Ghana Commodity
Exchange in Accra
President Nana Addo Dankwa Akufo-Addo yesterday rang the bell
to launch the Ghana Commodity Exchange (GCE), a platform for
buying and selling agricultural commodities in the country.
The platform, which is the first in West Africa and the third in
Africa, will link food crop producers to buyers to secure
competitive prices for their produce, provide a guaranteed market
and storage of quality graded grains and cereals.
The exchange works on the warehouse receipt system, where
farmers with a minimum of 20 bags of, say, maize, can deposit
their produce at any of the exchange’s warehouses, where they will
be tested at a laboratory, graded and deposited at the warehouse.
The farmer receives a certificate of title (receipt), after which the
grains are re-bagged into 50 kilogrammes.
With the certificate in hand, the farmer may decide to exchange it
for cash or keep it for sale during the lean season, thereby
avoiding exploitation by middlemen during bumper harvests.
The farmer can also use the commodity title as collateral for loans
from an array of banks that the state-owned exchange is working
with.
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Support for farmers
Launching the exchange, President Akufo-Addo said the
commodity exchange would be one of the key drivers to realise the
country’s vision of becoming the agricultural hub of West Africa.
He expressed worry that Ghanaian farmers had, over the years,
broken their backs in feeding the nation, yet they had no
guaranteed incomes to show for their labour.
He said commodity price volatility had been a challenge for many
farmers, while others had no knowledge of the true value of their
produce, coupled with the fact that most transactions in the
agricultural sector were conducted by word of mouth or handshake
agreements.
President Akufo-Addo said agro-industry players also had major
concerns, with varied qualities of the same commodity often mixed
together and sold, with clear disregard for accuracy in weight.
He said the players were also concerned about the non-existence
of a national system for the weighing and standardising of the
quality and quantity of commodities.
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Those challenges, he stated, had compelled people to resort to
expensive solutions and alternatives which included engaging
outgrower schemes to tie producers to delivering outputs or
extending considerable amounts of input financing.
Initial
President Akufo-Addo said the exchange would address such
challenges, saying the exchange would start with trading in food
crops such as maize, millet, sorghum, groundnut, dry beans and
soya bean, with additional commodities set to be traded on the
exchange in future.
He indicated that the government would make sure that the GCE
delivered on its mandate, promoted high productivity, price
stability, increased exports and reduced imports of commodities
and, in the light of the emerging regional and continental free trade
area, positioned Ghana as the premier West African global trading
hub.
To that end, he said, he had charged the Securities and Exchange
Commission (SEC), regulators of the securities market, to carefully
study the workings of the commodity exchange and understand
them clearly in order to remove every regulatory impediment on its
way.
Farmers
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With an estimated one million farmers set to be rolled onto the
warehouse receipt system and the exchange within the next 18
months, the President said Ghanaian farmers would gain access to
secure storage for their harvest and good warehousing
management practices.
That, he explained, would substantially reduce post-harvest losses,
improve farmers’ take-home sales, provide them with affordable
short-term loans, using their commodities as collateral, as well as
managing borrowers’ credit and default risks.
Farmers would also have access to daily real-time market and
price information directly via text messaging.
The President encouraged traditional rulers and others to help with
the sensitisation for more farmers to participate in the new trading
exchange system in order to improve the lives of their people.

Finance Minister

The Minister of Finance, Mr Ken Ofori-Attah, said the platform
would contribute to the transformation of the economy, especially
by offering farmers respectable prices for their toil and, at the
same time, creating jobs through the value chain.

He said the exchange, together with the warehouses, was expected
to provide about 200,000 skilled and non-skilled jobs.
He gave an assurance that the Agricultural Development Bank
(ADB) would be strengthened and made to shift focus from
commercial banking and concentrate on providing support for
agricultural development in the country.