Chief Executive of Dalex Finance, Ken Thompson, says the time is right for finance and investment firms to consider investing in the agricultural sector, especially in the production of rice, given the downward trend of government’s short-term T-Bill rates

Only 34percent of rice consumed in the country is produced locally, resulting in the importation of 680,000 tonnes annually, the latest Oxford Business School report has revealed

Even though the country’s domestic production has increased by 12 percent between 2010-15, domestic consumption increased by double that rate over the same period. As a result, Ghana imports between US$300million and US$500million of rice annually.

The report further states that, between 1999 and 2008, rice consumption grew from 17.5 kg to 38 kg per capita and is expected to reach 63 kg per capita by 2018.

With population growth, urbanisation and shifting consumer preferences, demand for rice is expected to continue expanding in the coming years.

Despite this potential for investment in rice production, financial institutions, have over the years, remained stoic. But the downward trend of T-Bill rates has necessitated a rethink.

The Treasury Bill rates for the 91 and 182 days begun 2016 at 22 and 23 percent respectively, but reduced to 16.7 and 17.91 percent in January.

The rates have reduced even further and currently stand at 11.9 percent for a 91-day treasury bill and 12.9 percent for the 182-day bill.

Mr. Thompson has therefore urged finance and investment companies to commit resources to the production of rice in the country.

“With the growing world population and a lot of hungry mouths to feed, the area to get into is agriculture. We want to make sure that by the time the agriculture industry is matured, we are already there and we have taken advantage of the opportunities".

"But we need other finance companies to come on board and it’s very important they come on board because that is where the growth is,” Mr. Thompson was speaking to the B&FT after officially announcing a GH?5million credit facility to over 10,000 rice farmers in the northern part of the country.

He added that: “Finance houses should come on board because they will earn good returns. Because if you look all over the world, the population is growing, and a lot of money is put into agriculture. Start small and hope to become bigger because that is where all the monies will go.”

He said agriculture is the sector that makes the country competitive on the global stage, stating that finance houses that are thinking about the growth and sustainability of their businesses must go into agriculture financing.

Mr. Thompson, however, called on the Ministry of Agriculture, to expedite action to avert the looming disaster posed by the Fall Army Worm.

The Army Worms have invaded farms in some parts of the Eastern, Brong Ahafo, Ashanti and Northern regions. Since 2016, the Army Worms have destroyed more than 5,870 hectares of maize, cowpea and cocoa farms.

According to Mr. Thompson, the effect of these pests could be worse than the ‘biblical plague of locusts’ if unchecked.

Dalex’s support is expected to be used to provide farming inputs such as fertilizer, improved seeds, and combined harvesters to ensure prompt and efficient harvesting of the rice.

“From the research we have done now, we found out that there are farmer groups who have an off-taker. The few problems the farmers used to have was the lack of good seeds, as well as the mechanization services.

In the north, a lot of the farmers’ farms used to get burnt because they didn’t harvest in time, and since it was so dry (weather), the farms get burnt at times. But once we have a good off-taker, and here the off-takers are big rice mills. They provide farmers with extension services, fertilizer, mechanization and harvesting, so it reduces the risk,” Mr. Thompson said.

Akshay Sharma, Chairman of Shinkaafa Buni a rice farmer group, said the local paddy (raw material) prices are too expensive as the yields per acre achieved by the farmers generally in Ghana is as low as 800kg/acre compared to minimum of 2.4mt/acre in Thailand, Vietnam, India, USA and Pakistan.

He said he supports government’s “One Village, One Dam” policy because of the potential of irrigation in increasing yields per acre.