Ghana Cocoa Board (COCOBOD) will later today sign a $1.5 billion Syndication Loan for the 2021/2022 cocoa crop season.
The facility, which is the largest deal in sub-Saharan Africa, will be used to finance cocoa purchases and related operational activities in the crop season.
The signing comes on the back of some positive developments in Ghana’s cocoa sector.
COCOBOD exceeded its production target to reach a record 1.06 million metric tons for the 2020/21 season, beating the previous record of 1.024 million metric tons in the 2010/ 2011 crop season. Also, global demand for cocoa is projected to grow by 2.2% for the next crop season.
Since the 1992/93 crop season, COCOBOD has consistently and successfully, through the pre-export syndicated finance facility, obtained a receivables-backed syndicated loan each year from the international money market to finance its cocoa purchases.
The latest loan facility, which has an interest rate plus LIBOR of 1.75%, is repayable in seven calendar months and projected to help purchase about 900,000 metric tonnes of cocoa.
Cocoa/Cedi buffer. So far, the cedi has depreciated by about 1.30% to the US dollar, selling at about ¢6.25 to the US dollar on the interbank forex market.
Analysts have however calmed market sentiments about the recent persistent depreciation.
This is because the local currency will be bolstered by the expected COCOBOD Syndication Loan as well as other developments.
Importantly, the current pricing of the cedi to the dollar is also within the range of many research institutions’ forecasts for the year.
The Minister for Food and Agriculture is the government official responsible for the Ministry of Food and Agriculture. The Minister is responsible to the government and the Parliament for the development of agriculture and maintaining food security.
This minister of Food and Agriculture of Ghana has in the past been also responsible for the Cocoa Affairs that has now been absorbed back into the Ministry of Agriculture.
These are the names of the Ministers of Food and Agriculture from the time of independence to date with their respective governments.
The shortage and price hikes of food commodities have been attributed to the exportation of food commodities to other African countries, but the General Secretary of the General Agricultural Workers Union of Ghana (GAWUG), Mr. Edward Kariwe has refuted the assertion.
Exportation of rice, maize, and soybean have been declining and there is no way that could have had an effect on Ghana’s food system.
According to Mr. Kariwe, the success of the Planting for Food and Job (PFJ) was over-emphasized. In 2020, PFJ was successful that there was an abundance of food in Ghana and that maize production had increased by 110% and rice production 48%, projected figures had said.
Surprisingly, he said with such a remarkable increase in production as the figures suggest, how come there was no availability of maize between January to July and August as exportation has declined?
He suspected that the figures that were given in 2020 about the level of production were exaggerated and the figures did not support the availability of food in the country.
The General Secretary recalled that in 2018, Ghana exported more food commodities than in 2019 and in 2020, yet in 2018 Ghana did not have a food shortage, therefore, export cannot be the yardstick for the shortage and high cost of food commodities as Ghana exported less in 2020.
He acknowledged that Planting for Food and Jobs has made a success but it has been exaggerated. He called for a national conversation to probe into the real causes of the current country’s agriculture situation because the future looks very disastrous.
The Minister of Fisheries and Aquaculture Development, Mrs. Mavis Hawa Koomson has tasked the newly constituted governing board of the Fisheries Commission to find a lasting solution to the unending illegal fishing menace facing the country.
She said Ghana risked being sanctioned by the European Union (EU) if drastic measures were not implemented to curb the trend.
Ghana loses between US$40 and US$50 million annually through illegal fishing, popularly known as “Saiko”.
During the inauguration of the new board in Accra on Thursday, the Hon. Minster noted that illegal, unreported, and unregulated (IUU) fishing remained a major challenge in the sector. She, therefore, charged the newly constituted members to institute measures to help address the menace.
Mrs. Koomson said as part of the effort to address IUU, the Ministry, through the National Premix Fuel Secretariat had suspended the supply of premix fuel to some communities in the Greater Accra and Central regions who engaged in “Saiko”, to serve as a deterrent to other communities across the country.
“Until they come to tell us they won’t do it and we also believe that they won’t then we can supply them with premix,” she added.
She said so far about five persons had been arrested, prosecuted, and fined while over 20 generators had been seized in the process.
The Minister said the fisheries sector played a critical role in the socio-economic development in the country as it provided a livelihood for more than three million Ghanaians.
The government’s vision, she said is to transform and grow the aquaculture sub-sector to increase domestic fish production, reduce fish import and create job opportunities along the value chain by providing a conducive environment.
Key initiatives being undertaken to achieve this include the implementation of the Aquaculture for Food and Jobs (AFJ), improving the production and supply of good quality fingerlings, provision of extension services, provision of infrastructure (hatcheries), and essential aquaculture inputs, she added.
She disclosed that in the coming days, the Ministry would distribute over seventeen thousand bags of feed to the beneficiaries of the AFJ programme to boost production. Mrs. Koomson urged the board members to initiate policies and programmes to ensure the success of the programme.
The Minister also charged members of the board to prepare a new Fisheries Act to replace the existing Fisheries Act 2002 (Act 625); develop a new National Fisheries Management Plan to replace the previous Plan that expired in 2019 and prepare a new National Fisheries and Aquaculture Policy.
The members are expected to intensify the enforcement of the fisheries laws and regulations by the security agencies, implement the annual closed fishing season, as a stock recovery measure, in accordance with Section 84 of the Fisheries Act, 2002 (Act 625), prepare and issue canoe identification cards, as well as evaluate and License all vessels in the country.
The Chair of the newly constituted board, Professor Nunoo assured the Minister of the board’s readiness to work together to turn the fortunes of the sector and make it more viable.
“On behalf of my members, honourable Minister, we want to pledge that we are going to work very hard, we will be very truthful and work candidly, and passionately to help build the industry,” he assured.
The 11-member governing board is chaired by Professor Francis K. E. Nunoo, the Head of the Department of Marine and Fisheries Sciences, University of Ghana.
Other members include Dr. Michael Arthur-Dadzie, Esq., Director, Fisheries Commission; Mr Kofi Asumadu Apenteng, Ministry of Transport; Commodore Godwin Livinus Bessing from the Defence Ministry; Mrs Lydia I. Essuah, Ministry of Environment and Nana Jojo Solomon, Ghana Marine Fishing Officers Association.
The rest are; Dr Ruby Asmah, Water Research Institute; Mr Wilson Kwabena Darkwah, Ghana Irrigation Development Authority; Mr Stephen Adjokatcher, National Fisheries Association (Artisanal Fishermen); Mrs. Levina Owus; National Fisheries Association( Fishing Vessel Owners) and Mr Augustine Acheampong Otoo, President’s nominee.
The 15th African Cashew Alliance (ACA) annual cashew conference that commenced yesterday has the objective of finding solutions to challenges facing the supply chain of the commodity.
The virtual conference which began yesterday will end tomorrow 17th September 2021 while the side events are slated for 20th – 24th September 2021. The theme for the conference is “A sustainable cashew supply chain for the future.”
Commenting on this year’s cashew conference, the Managing Director (MD) of the ACA, Ernest Mintah, said the choice of the conference’s theme was inspired by lessons learned from the outbreak of the COVID-19 pandemic and the impacts it had on the global cashew supply chain.
He explained that, while the cashew industry was not hugely affected by the pandemic as was initially feared, it has exposed some deficiencies in the global cashew supply chain that requires fixing.
“The COVID-19 pandemic exposed the industry to a lot of looming problems. The major one is the imperfect cashew supply chain where raw cashews are produced in Africa, exported to Asia for processing, and then to Europe and America for consumption. This supply chain is specifically too long and may not be able to resist future shocks in the industry. It also means that Africa will continue to be a mere producer of raw cashew and will benefit less in the huge potential of the industry,” he explained.
This, he said, has necessitated the need for discussions among cashew stakeholders to improve the global cashew supply chain into one that is financially, economically, and socially sustainable and beneficial to the entire global industry.
“We need to shorten the cashew supply chain by processing at (or) closer to origin. And that means cashew processing must be improved in Africa, where over 57% of global cashew is produced. This is necessary to sustain the global cashew industry,” he emphasized.
On her part, ACA’s Head of Communication, Blessing Okam, underscored the need for stakeholders in the industry to deliberate on finding means of sustaining the cashew supply chain for the future.
The conference attracted cashew experts and other prominent individuals in the global cashew space. Key among them are Ghana’s Deputy Minister for Food and Agriculture, Yaw Frimpong Addo, Burkina Faso’s Minister of Commerce, Industry and Handicraft, Harouna Kabore, Cameroon’s Minister of Agriculture and Rural Development, Mbairobe Gabriel.
Other speakers are Benin’s Minister for Agriculture, Livestock and Fisheries, Gaston Dossouhoui and Vice President cum Trade Promotions Director of the Vietnamese Cashew Association (VINACAS), Trans Van Hiep.
The government is set to arrest and prosecute unlicensed and illegal artisanal palm oil producers and processors in the Country by next year.
The move is to drive away bad operators from producing unclean and unhealthy palm oil for consumption, which is causing a lot of illnesses, such as cancer.
The effort is expected to enhance market access for workers in the palm oil value chain in the producing districts and ensure that finished products meet both local and international market standards to generate income and taxes for development.
Paul Amaning, the National President of the Artisanal Palm Oil Millers and Outgrowers Association of Ghana, gave the hint during a product packaging training for palm oil producers at Twifo Hemang.
He noted, that a substantial part of Ghana’s palm oil imports could be sourced locally from artisanal palm oil producers if they met the quality requirements of both industrial users and palm oil exporters.
Mr. Amaning said the government was ready to support the millers with portable machines for palm oil processing at a convenient process within a shorter period of time.
He urged the artisanal mill owners to adapt to change and also work together as a team in advancing and digitalising the Palm oil business.
Mr. Amaning, further charged the participants to register their businesses to meet the requisite standards to enhance trading and also provide jobs to reduce unemployment and increase the living standards in the Country.
John Odai Tettey, the Regional Manager of the Food and Drugs Authority (FDA) schooled participants on the requirements of business registration for them to be able to operate without interference.
He added that food hygiene and safety should be the core element of all food preparation processes, including palm oil, hence the need for processors to obtain and regularly update their knowledge in food safety and good manufacturing practices.
Mr. Tettey advised consumers to stop demanding palm oil with a redder hue, explaining that such market preferences made some unscrupulous palm oil producers add substances to the product to change its natural colour, which could compromise food safety.
He urged the participants to be committed to ensuring the safety of their products to safeguard public health.
The Regional Manager advised the mill owners to follow the right procedures and measures to produce the best and quality product for the market.
The Deputy Minister for Agriculture has dismissed claims that the country is faced with a food crisis.
Mr Yaw Frimpong Addo speaking on JoyNews on Wednesday admitted that currently there is a shortage of foodstuff on the market, however, that should not raise an alarm as this is the trend during the planting season.
“Food shortage, yes, but we don’t have a food crisis. I’m telling you that during the planting season every year, it has been like this. Just that this year because of Covid-19 and fertilizer production, everything about fertilizer (things have been intense).”
Interacting with Evans Mensah on PM Express on the topic of averting food crisis, Mr Frimpong Addo noted that despite the adverse effects of the pandemic and the low supply of fertiliser, Ghana was able to withstand the shock due to the Planting for Food and Jobs programme established by the government.
He insisted that matters of food security would have been worse and the country would have joined others seeking support if not for the programme.
“Go to our neighbouring countries and see how they are suffering under Covid-19 in agriculture. We are even fortunate and they even had to come to Ghana and take some foodstuffs away. We have done so well with the Planting for Food and Jobs. That has saved the situation. That is why we are talking this way. Otherwise, we would also be in the same soup as they are.”
He, therefore, urged that “let’s count our blessings and reduce this pessimistic thing about hunger.”
“We are not going to experience any hunger in the country, that I can assure you,” he stressed.
His comments come as a response to concerns raised by some experts in the agriculture industry.
The Peasant Farmers Association has predicted a food shortage next year due to challenges with accessing fertilizers and the exportation of some food products to neighbouring countries.
Experts in the Agricultural industry have therefore advised the government to store enough food this year.
Meanwhile, the Deputy Minister for Agriculture says he is optimistic there would be a good harvest this year during the harvest period.
He attributed such good fortune to the good weather the country has experienced since June this year.
“During the second half of the year, the rainfall pattern has been good. I am very sure that the farmers are going to get a good harvest. It may not be at the level of last year or two years but they are going to get a good harvest because the weather has been good.
“Because of that, I am very confident that overall, we will get a good harvest,” he stated.
Southern and Eastern Africa face the twin challenges of growing agricultural production to meet food demand while adapting to extreme weather. And climate change makes addressing these challenges extremely urgent.
Southern Africa is a climate change hotspot. Eastern Africa is projected to still have good average rainfall, although temperatures will increase and flooding becomes more frequent.
There is huge potential for meeting these twin challenges across Eastern and Southern Africa, where there are in fact good soils and water availability in many countries.
However, markets are not working well, especially for small and medium-scale farmers and agri-businesses which are at the heart of inclusive food value chains. These participants are often not receiving fair prices for their produce due to the way markets have been working, including powerful interests, high transport costs, and poor facilities such as those for storage.
Our mission is to share knowledge and inform decisions Analysing market failures requires information. Yet, poor market information has made the ability to monitor market prices in close to real-time difficult across much of the region. Up-to-date information on food prices is critical to understanding agricultural food systems in the region and for collectively planning responses. Information on food prices should be accompanied by other market information relating to production and market structures.
To address this, the University of Johannesburg’s Centre for Competition, Regulation, and Economic Development has launched a market observatory. This is one part of supporting smaller producers in negotiating fair prices and in identifying measures to make markets work better across the region.
Markets not working well Volatility over time, and very large price differentials between areas in Eastern and Southern Africa for key crops such as soybeans and maize, reflect markets that are not working well for producers or buyers such as agro-processors.
The price differentials point to potential local market power being exploited and big profit margins being earned by large traders. The spread of larger traders across the region is meant to have heralded more efficient markets. However, market outcomes and high levels of concentration at various levels of supply chains indicate that there are also major concerns about market power.
For example, over the past 12 months, the patchy data supported by anecdotal information indicate that soybean prices have been extremely high in Dar es Salaam and Nairobi (above US$900 per tonne). This while there is great potential to supply from areas within Tanzania as well as from Uganda, Malawi, and Zambia.
Prices in areas such as Zambia and southwest Tanzania were below $400/t in May after the harvest and around $500 in Malawi. The difference between the producing areas and the cities is consistent with farmers getting offered unfairly low prices by large buyers. Large buyers are taking advantage of the poor storage and the lack of other market options available for the farmers. Farmers have to accept the low prices being offered.
The transport costs to the main urban markets should not account for more than $100/t of the difference between $400 or $500 and $900, meaning that massive profits have been made by the “middle-men” or traders. In competitive markets, trading margins would reflect reasonable costs and not super-profits.
These profit margins are at the expense of farmers, who receive low prices, while high prices are charged to agribusinesses and consumers in urban areas. This undermines production in the region. It also contributes to high food prices and compounds reliance on imports.
This especially affects smaller market participants. Large and integrated processors and traders have their own transporters and infrastructure, and better market information.
Smaller market participants are charged massively inflated transport costs where they look to bypass traders and organise their own sales. This undermines effective market integration across the region. In our research, market participants in Malawi indicated that those looking to export from Malawi were being charged as much as three times what were reasonable rates.
There are also high rates being set by local transporters within some countries. This suggests market power in transport and trading, including on the part of influential large trucking companies in some countries. Some market participants in Tanzania have resorted to placing loads on buses in recent months, incurring very high costs and yet still receiving the product at much lower than the prevailing prices in Dar es Salaam.
Next steps Smaller producers and agribusinesses are integral in growing production and ensuring the fairer and more competitive markets required for the benefits to be widely shared and sustainable. Small to medium-sized farms and agribusinesses have been growing strongly in many countries yet face many disadvantages in markets, especially relative to large multinational trading groups.
Action, including market monitoring, effective competition enforcement, and investment in the necessary infrastructure and support, is required to shape markets to work better.
Steps to support smaller producers are important in any event. However, the climate emergency means they are imperative and that the time to act is running out fast. The extreme weather currently in the Americas is a warning not to be complacent.
The El Niño state brings drought in southern Africa while inducing heavy rainfall and floods in Eastern Africa. The 2015/16 period saw the worst drought in Southern Africa for around 30 years. This led to maize shortages and prices jumping in countries such as South Africa, Mozambique, and Malawi. Extreme weather patterns also contributed to price volatility in subsequent years with, for example, cyclones in Mozambique, poor rainfall, and drought concerns in 2019 seeing prices spike again.
Adaptation to the effects of climate change means supporting increased production, such as through irrigation, coupled with intra-regional trade across Eastern and Southern Africa. According to the latest Intergovernmental Panel on Climate Change assessment, while Southern Africa will experience less rainfall and more droughts, Central to Eastern Africa is projected to maintain precipitation levels, on average. When extreme weather hits one part of the region there will likely still be good harvests from other areas.
Urgent measures are required to support agricultural practices for farmers to adapt to climate change and increase production while ensuring markets work effectively across the region. The good news is that the region has the potential to substantially improve its resilience and increase earnings for farmers and jobs in the related value chains. This requires fair market prices and support for investments in areas including irrigation, production, storage, and processing.
In July, the United Nations sounded alarms with its 2020 hunger report, which documented a 25% increase from 2019 to 2020 in the number of severely undernourished people in the world. Sub-Saharan Africa saw a similar spike with an estimated 44 million more people suffering severe hunger. COVID-19 and climate change were the proximate causes, but lagging productivity growth in agriculture contributed as well.
The Alliance for a Green Revolution in Africa (AGRA) was founded 15 years ago to address that productivity problem. With generous funding from the Bill and Melinda Gates and Rockefeller foundations, the alliance was founded as an international NGO dedicated to addressing chronic hunger and poverty. It would do so by increasing yields in key food crops through the expanded use of commercial seeds and fertilisers. This is the “technology package” credited with raising agricultural productivity in what came to be known as the first Green Revolution in India and other parts of Asia and Latin America in the 1970s.
The alliance set two key ambitious goals to be achieved by 2020. The first was to double yields and incomes for 30 million smallholder farming households. The second was to reduce food insecurity by half. With funding from private foundations and a few western bilateral donors, the organisation has focused on 13 African countries for most of its 15 years, spending about one billion dollars.
At Tufts University, we set out in 2020 to assess how well the organisation was achieving its own stated goals. The organisation refused to share data on its beneficiaries, giving no reason. So we examined data from its 13 priority countries – among them Kenya, Nigeria, Ghana, Tanzania – to see if there were indications that a productivity revolution was taking place, generating rising incomes and improved food security. We relied on data from the UN Food and Agriculture Organisation and the World Bank, which at the time had data through to 2018.
We found little evidence of significant productivity improvements. For a basket of staple crops, productivity increased just 18% over 12 years, practically the same rate as it had prior to the interventions by the Alliance for a Green Revolution in Africa. That is nowhere near its goal of doubling productivity, a 100% increase.
Income improvements were more difficult to assess due to limited data. But poverty levels remained high, particularly in rural areas. Most alarming, UN estimates of the number of severely “undernourished” people in those 13 countries increased 31% since 2006, a far cry from cutting food insecurity in half. More recent UN figures show that the number of severely hungry people in sub-Saharan Africa as a whole has grown 50% since the alliance’s founding in 2006.
No evidence of impact The organisation’s defense is, strangely, that its budget represents just 1% of development funding in Africa. So it argues that it is unreasonable to expect that the impacts of its work would be reflected in national-level statistics. I offer two responses.
First, the organisation set its own ambitious goals. By any estimate, 30 million smallholder farming households represent a significant majority of farmers in the 13 focus countries. If the alliance had doubled yields and incomes and halved food insecurity for that many farming households, that would indeed have shown up in the data.
Second, our research did not focus on the organisation’s narrow impacts. Instead, we gave it the benefit of the doubt and assumed that its true objective was to catalyse a productivity revolution, in conjunction with the many other Green Revolution initiatives on the continent, not the least of which are direct subsidies for smallholders to buy seeds and fertilisers. Those provide as much as US$1 billion per year in support, a far more direct and significant contribution to the Green Revolution project.
Our research assessed the progress of the Green Revolution project as a whole. This should indeed have produced measurable results in 15 years given the billions of dollars invested in the project. It has not.
Since the publication of our research, the Alliance for a Green Revolution in Africa has been unable to provide evidence of its positive impacts on productivity, income, and food security. Its recently published 2020 Annual Report claims to do so, but my view is it presents only short-term changes for small samples of crops and countries.
A flawed ‘theory of change’ Our research paper calls into question the very premises of the Green Revolution’s “theory of change”. The theory is that if seeds and fertilisers are put in the hands of small-scale farmers, their yields will double, as will their incomes from the sale of surplus crops. And they will become food secure from the crops they grow and the food they can now afford to buy.
We found that: Adoption rates of high-yield seeds and synthetic fertilisers are low, in part because the inputs are expensive and do not produce high enough yields. Even with subsidised inputs, yields have failed to increase dramatically.
With relatively small yield increases there is little more to sell. For many farmers, the added income from sales does not cover the costs of the inputs. The incentives to abandon more diverse cropping systems can actually undermine food security by decreasing diet diversity and reducing climate resilience. Severe hunger in the 13 focus countries has increased by 30%.
Temporary increases in yields from Green Revolution inputs tend to wane over time. Soil fertility decreases under monocultures fed by synthetic fertilisers. Farmers grow dependent on subsidies and risk going into debt.
The failures outlined here implicate a range of initiatives, not just the Alliance for a Green Revolution in Africa. Yet this year’s African Green Revolution Forum seeks to celebrate these entities in advance of the upcoming UN Food Systems Summit on September 24.
The alliance claims its forum this year speaks with a “singular coordinated African voice.” Outside the forum, representatives from the Alliance for Food Sovereignty in Africa, a broad network representing some 200 million food producers, demanded an end to AGRA’s funding. In the words of Alliance leader Million Belay:
