President of the National Seed Traders Association of Ghana (NASTAG), Kwabena Adu-Gyamfi, has bemoaned the low financing of the agriculture sector in the country.
According to him, banks are reluctant to grant loans to farmers and other agricultural companies who are practically left to fend for themselves. He indicated that members of the association are in financial difficulties as they are yet to receive payments from government for seeds supplied to farmers via government’s flagship Planting for Food and Jobs (PFJ) programme.
“Agriculture financing is at the lowest in terms of banks considering us and so we have to depend on our own internally generated funds to fund our operations. So, when that one too is compromised like this, it becomes very difficult for the company to survive…”Kwabena Adu-Gyamfi
Mr Adu-Gyamfi revealed that NASTAG is being forced to strike due to government arrears of some GHC207 million for seeds supplied in 2021 crop season. He indicated that the agric ministry has been very responsive to their petitions and has had sessions with them on the payment of arrears.
The NASTAG President highlighted that MoFA has processed their document and channelled it to the ministry of finance and is awaiting on the ministry “to pay us for what is due us for the seeds we supplied”.
“It is not a threat, it’s just a matter of fact that if we are not paid, our ability to sustain production to give farmers the certified improved seeds [will be impeded].”Kwabena Adu-Gyamfi
Delay in payment of arrears to seed suppliers
Mr Gyamfi revealed that previously, it took government about six months to pay off the seed supplier and it has been the trend since 2017 when members started participating in the programme. However, he emphasized that for 2021, it has taken “unusually long”, and suppliers haven’t received payment.
“Quite a good chunk of our numbers are smallholder farmers and the cash resources are overstretched because as you know, the banks are not interested in supporting agriculture.”Kwabena Adu-Gyamfi
Commenting on the terms of agreement between NASTAG and government, Mr Gyamfi stated that the government in 2017 launched the Planting for Food and Jobs and provided subsidies for seeds which the association applied. He explained that members won certain percentage of tonnage of seeds, ranging from maize, cowpea and other crops to supply to the farmers under the subsidy programme.
“Now, the programme works in such a way that we have to prepare our invoices and it’s a rigorous process. We need to go to the department of agriculture, they have to certify that indeed the seed have been sold to every farmer. Then we collate all these invoices and send it to the ministry food and agriculture where it will be checked, pre-audited and finally submitted to the ministry of finance.”Kwabena Adu-Gyamfi
On his part, the CEO of Chamber for Agribusiness, Anthony Morrison expressed the need for government to ensure prompt payment to suppliers in the sector. He opined that the Chamber had in the past proposed that government should find a way to liberate itself from the agriculture trade sector.
“So, possibly, bring in a mechanism so that as soon as the seed breeder [and] the fertilizer supplier supplies, it doesn’t take more than a season for them to get their money.”Anthony Morrison