Banks have failed farmers; gov’t to introduce law to force them to give loan to farmers – Agric Minister

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Dr. Owusu Afriyie Akoto, Ghana’s Minister of Food and Agriculture, has said the government would soon file a measure to require commercial banks to lend to farmers.

He noted that the government has supported farmers by subsidizing inputs, so the banks must also play their part by lending to farmers and other sector participants.

Dr. Afriyie Akoto said Ghana wouldn’t be the first to propose such a legislation, citing India as an example.

He mentioned this over the weekend when touring commercial farms in the Eastern Region with TV3’s Yvonne Neequaye.

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He said the government can’t control the rising expense of farming.

“When we visited chicken producers, it was clear that feed prices, which account for 70% of production costs, had risen. Compared to January, February, March, April, and May 2021, 2020, and 2019, prices have risen. They’ve risen because the price of chemicals has doubled or tripled, raising agricultural production costs.

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“Fuel costs have tripled, thus haulage from the farm gate to consumption centers has increased. These are external forces we can’t control that affect price formation.

“Since of that, the cost of doing business in agriculture has risen, and poultry producers who raised 150,000 birds have dropped to 50,000 because their operating capital can’t sustain the increased pricing. The banks that do business with poultry producers should be allowed to grant them loans to maintain or enhance output.

“Banks haven’t helped, so they’re cutting output. Their view was that the administration had done something despite everything. We spent 1.5 hours explaining what the government is doing to fix the problem. After the explanation, they were happy with our efforts.

“We’re making a lot of attempts to bring in commercial banks, including the prospect of adopting legislation requiring them to lend a piece of their portfolio to farmers and others in the value chain. India has done it for 30 years, so we wouldn’t be the first.

“You will probably hear something in Parliament about this problem, to make sure commercial banks play their part since the government is subsidizing inputs and fertilizer, the banks should be allowed to lend to farmers.”

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