Business News of Thursday, 8 July 2021
Source: business24.com.gh
2021-07-08
Access to credit must be improved to help farmers produce surpluses
African governments have been urged to develop sustainable agricultural insurance schemes to help improve the fortunes of smallholder farmers.
This proposal was part of a number of recommendations of a study on market linkages in agriculture, entitled Smallholder Voices in Policy Discourse Market Linkages Study, by the African Centre for Economic Transformation (ACET).
Presenting the findings of the study at a virtual policy learning event, Dr. Julius Gatune, the project technical lead, said lowering the risks of farming by using risk management products like insurance would help catalyse and scale up needed innovations to inform policy actions.
He said innovations are needed across three domains—technology, policy or social innovations, and business model innovations—if traditional market challenges are to be addressed.
The study, which reviewed key and emerging issues in markets in Ghana and Kenya, and innovations needed for improving market access, argued that organising farmers better and increasing their networking capacity would equip them with the capability to use Information Communication Technologies (ICTs), especially to access online markets.
Another finding of the study, according to Dr. Gatune, was the need to improve access to credit to help farmers produce surpluses which they can market as well as the need to improve trust between farmers and traders.
Dr. Gatune added there was the need to upgrade traders to move from pure opportunistic traders to more organised and capitalised logistics service providers and commodity traders. This would require consolidation of the sector to a few well-capitalised traders, he said.
Storage was another challenge for smallholders, Dr. Gatune said, with most farmers using their homes as storage facilities. In Ghana, the study found that 40 percent of farm products that are not sold are either consumed or given out to neighbours. Similarly, in Kenya, about 40 percent of farmers reported either throwing away or not harvesting their products.