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Opinions of Sunday, 27 July 2014

Columnist: Annor-Frempong, Charles

The Youth in Agriculture: The Challenge for Institutional Development

By Charles Annor-Frempong Ph.D, kofi201215@gmail.com



Many prominent and well-meaning Ghanaians, especially the politically inclined, have made calls in recent times, through the media, for the youth to embrace farming as an occupation. I suspect these calls are driven primarily, among other reasons, by the need to provide employment for the multitude of youth walking the streets of the capital cities and those trooping from the rural to urban areas in search of employment. It is open knowledge that the number of people engaged in farming is declining and farm labour is becoming scarce and expensive in Ghana. Two things may be happening either those who are in it are leaving for various reasons and/or there is a reduction in new entrants to replace those exiting due to old age or death. Developed economies have fewer people engaged in farming but ours is developing and is therefore still at a stage where opportunities for employment can be found. All the calls made so far have fallen on death ears and for reasons that warrant investigations.

Some have associated weeding as a form of punishment in schools to the lack of interest shown by the youth whilst others argue on the basis the use of manual labor as a source of farm power rather than agricultural machinery such as tractors. If these assertions were true, then we would never have had famers in Ghana. The spread of cocoa farming from the eastern region through the entire southern parts of the country occurred when there were no tractors and weeding was a very common form of punishment in schools.

The fact is, there are very practical man-made institutional challenges that have made farming an extremely difficult venture to invest in and unless they are addressed, no amount of calls will reverse the current trend. My fear is that the situation is bound to get worse with the new found oil wealth, and Ghana is heading in a direction of no return with the importation of tomatoes. After all onion imports started longtime ago and we watched on!

Two fundamental questions that I would like to pose to those making the calls are: (i) how many of them are either training their children or encouraging them to go into farming and; (ii) do they know the size of farm/herd, considered adequate to provide a basic income for a family? How much land is required to sustain a family whose sole income is dependent on cocoa or maize? What number of poultry, goats or cattle is required to earn something close to an average civil servants yearly salary? Do we expect the youth to go into farming without any such expectations? I will now turn my attention to the focus of this article, to discuss three main agricultural institutions land markets, finance and marketing which from my experience are core to the challenge we face in farming in Ghana today.


The Land Market

All farming activities, be it, livestock, aquaculture, crops or even hydroponics require some space, therefore the first asset to be acquired by any prospective farmer will be land. Land is abundant in Ghana with adequate water surface, underground and rainfall- as well as a good amount of sunshine. All these assets, being in generous amounts make farming a good proposition. Unfortunately, land acquisition in Ghana for agricultural purposes is an uphill task even for those with the financial resources to do so...

Land Availability. I have indicated that land is abundant in Ghana yet it is unavailable. The first challenge is about knowing which land is available for lease. There is no public advertisement or register of lands anywhere in Ghana that gives an indication of their availability for lease or purchase. On few occasions, some few acres of land get advertised but largely prospective buyers will have to go hunting for land by either going to chiefs or other land owners to check on their readiness to lease or go through acquaintances or by word of mouth passing the word around.

Land ownership and lease processes: The second hurdle is to find the real owner with whom the buyer can then begin the negotiation on the terms and conditions. In some localities, the payment of drink money whatever that means is made prior to actual negotiations. As there is no uniformity in the practice across the country, there are various forms of negotiations that take place but within the Akan community, for instance, the tradition is to negotiate with the chief and his elders, even though the land may be owned/occupied by a family. After a series of back and forth negotiations, an agreement is reached on the price without any valuation an arbitrary guesswork done by the land owner primarily driven by demand in that area. There is no differentiation in the cost of land between land for agriculture and those for other purposes e.g., housing or industrial.

Legalizing the lease. The third challenge is legalizing the terms and conditions of the lease/purchase agreement between the owner (lessor) and buyer (lessee). In the past, before the advent of colonization, payment of drink money would have consummated the agreement and the buyer lessee would have been free to begin cultivating the land. Unfortunately, the traditional system of land acquisition is illegal until it is legalized through a registration system at the Lands Commission. The process of legalizing the arrangement between the lessor and the lessee can take anywhere from 30days to more than 2 years. Apart from the time taken to get the land legally acquired, this step also involves payment of government fees after valuation. The ongoing reforms in the land sector may be in the right direction, but do not go far enough to resolve the duality in land administration in the country. One has to experience the process to consider whether any youth walking the street can by word of mouth obtain land for farming.

Cost of Land. The fourth challenge is that the lessee has to make down payment for the cost of land for the number of years the land is leased. Since agricultural land by law is leased for 50 years it means an outright payment for 50 years for each acre of land acquired. Assuming the price is GHC 1000/acre and the total acreage required is 50, it would mean a down payment of GHC50, 000.

Land-use. An aspect of our land administration system which has affected the cost of agricultural land is the contempt we have for land-use plans - they exist on paper. Decisions on land use are at the discretion of the lessor rather than a legally adopted document that binds the owner and the lessee to the extent that prime agricultural lands are developed for other purposes. Since agricultural land can be converted at will, it certainly has a bearing on the cost structure. In some developed agricultural economies, agricultural land would have different value to those for housing and industrial purposes, and will be preserved for agricultural purposes. Since land is simply considered land in Ghana, the price is also the same. They only differ by location, rural or urban. As estate development is the in-thing now, all lands within a certain radius of capital cities have been acquired for housing purposes even if the land is prime for agriculture (move from Accra to Ada through Somanya to Aburi, Nsawam and they have all been acquired for estate development). The cost is thus high in urban areas where peri-urban agriculture once flourished and could have been promoted for those who are already within the environs of the city.

Inheritance of farm land. Initially, cocoa farms were large, large enough to sustain families of more than ten. As we do not have a system where farmland is passed on to another generation through a secure arrangement by which all beneficiaries benefit, whilst the farm size remain intact, our land sizes have become atomized. As the atomized land size is no longer economical, they have been abandoned or leased out to those remaining in the rural communities for the cultivation of annuals crops for home consumption or estate development. The atomization of land ownership also means a prospective buyer will have to go through several land owners to acquire a contiguous piece of land for farming purposes, that is, if they will all agree to lease.

Agricultural Finance

There are three major sources of finance available to farmers in Ghana the formal banking sector, micro-finance schemes and informal channels mostly provided by market women (middlemen). Aspects of finance that affect agriculture and common to all three are access, maturity period and cost. Once an appropriate land is found, a prospective farmer would require finance not only to pay for the land but all other inputs for land clearing, maintenance ,harvest, storage, transportation, and marketing. Additional finance is required for the upkeep of the farmer during the growing season if s/he is a new entrant. I do not know of any situation where an individual has been able to obtain a loan to cover all these activities.

Access to Finance. Access through the formal banking system is problematic as all of them require collateral in the form of an immovable property such as a house and I am not sure if the youth roaming our cities have any such facility to back up an application. Micro-finance schemes may be fairly easy to access but of short maturity period and not in adequate amounts to finance major new enterprises. Market women/middle men provide loans with the farm produce as the collateral, which means, the produce is sold upfront before the farmer can even determine the yield.

Maturity Period. Most agricultural loans, if available, are of short term duration. This does not favour long term investments into perennial crops and large ruminants which take more than 3 years to mature.

Cost of Finance. Apart from access and the maturity period, the cost of finance has had the most crippling effect on agricultural growth in Ghana. Over a long period of time, agricultural loans have hovered around 30% per annum, an extremely high rate for farming purposes. The high cost has prevented new entrants, restricted expansion of farmland and made our agriculture uncompetitive. It is important to note that the high interest rate has a multiplier effect on all other inputs, chemicals and machinery as well as labour. Agribusiness concerns, factor in the cost of credit and inflation into their price structure which not only raise the cost of inputs but also make farming equally expensive. I do not know of any country that has developed its agriculture with such high interest rates and at the same time expect the youth to take to farming. It does not even make sense to subsidize under such economic conditions. Let us take the example of pineapple, at the moment; I am told by a farmer that it costs about GHC3500 to manage an acre of pineapple farm. If farmer is able to obtain a loan for 10 acres (assuming this will be sufficient to raise the same amount of income as an average civil servant for a year). The total requirement for one year is GHC35000 at 30% per annum. Pineapple takes 15-18months to mature. This is more than GHC 10000 on interest alone. If for some unexplained reason the season is bad and farmer loses all his crops, it means his collateral is also gone, hardly do the banks refinance.

The high interest rate is a reflection of our inability to manage the economy to make finance available for investment. I have heard people ask why we cannot produce our own tooth picks on the radio it is simply because we cannot compete with countries where investors can obtain loans at lower interest rates for such low cost items. The earlier our managers paid attention to the economy the better it will be for all of us and for future generation as well as those they would like to entice into farming.

Agricultural Markets

Production and marketing. Our agricultural marketing institution is also one of pre-modern times that have not kept pace in a manner that will facilitate agricultural development. Production and marketing are two separate specialized activities and yet interdependent. With the exception of cocoa where farmers have specialized as producers with Cocoa Marketing Board (CMB) taking over the marketing functions - from warehousing through wholesale to the final buyer, no other crop enjoys such privileges. I consider it lucky that we have middle men to pick up marketing functions but this is so imperfect contributing to the cyclical high and low production and major post-harvest losses at great expense to both the farmer and the middlemen. I have seen agricultural extension workers and researchers teach farmers over and over again on how to manage post-harvest losses, but our marketing system is so broken that this will happen over and over again.

Farmers in Ghana store their produce, wholesale, retail and sometimes process, trying every means to optimize resources this is good but it is unproductive. It is not uncommon to find some carrying a basket of maize or cassava every three five days to a market looking for buyers at the expense of precious time for production. I have come across situations where farmers have abandoned their produce in the market because they could not find buyers. Undersirable aspects of produce marketing is that most of the time middlemen buy on credit and sometimes provide all sorts of reasons to avoid payment. It takes additional resources by the farmer to elicit payment and by the time they pay, the money would have depreciated in value.

Weights and measures: With the exception of cocoa, and to some extent oil palm, agricultural produce are sold at face value, rather than by weights and grades, and the batter system still persists in some places (Visit Ampaem on a market day). Cassava, in most instances, is sold before it is harvested so there is no way of judging with any degree of certainty the yield and grade. Yams are sold by tubers, plantains by the look. Farmers are thus unable to judge upfront how much they will receive for their produce based on yield potential.

Security of produce. An aspect of farming especially livestock production that has hampered growth is the lack of security for the animals and yet nothing is being done about it. A number of the animals slaughtered today are stolen. I have personally had very bitter experience and know of a number of people whose cattle have been stolen that I cannot encourage anyone to make any such investment. This is happening in an era where measures are available to curb the practice. There is a shining example from which we can learn. The case of the Cocoa Marketing Board is a working example. It is largely a farmer-based marketing organization and has served farmers well. The Board does not only perform marketing functions, but also provide regulatory functions, ensuring standards, research and extension services. This means that all these functions are indirectly paid for by farmers. Although, we cannot treat all commodities the same way, it is a model worth looking at for other commodities -separating production from marketing functions.

Farmers welfare

I suppose the call to the youth to move into farming is not for them to live under the same conditions as our farmers. Just take a tour in the morning from Mamfe to Koforidua (for those who use that route), and from Bogoso to Agyenpoma (for those in the western parts) and return in the night and observe farmers living close to the roadside. First, check the distance their children walk to school, the sick get to the hospital, their source of water and entertainment at night. On your return check their source of electric power and the conditions under which the children study in the evenings. In this day of solar power most farmers in the rural area still use bobo at best a kerosene lantern. The youth we are calling to go back into farming just came from there!!!. It will not be easy to ask them to return to the same old conditions they have passed through already. It is possible to supply solar power to every household in all the remote areas at a subsidized cost. It will afford them the chance not only to watch television in the evening for their relaxation but for their children to do their homework. They can also begin to enjoy the fruits of their toils by watching TV and keeping certain food ingredients refrigerated. Why should they enjoy these basic necessities only when they are in town for funerals or retire from farming if ever they have the chance to do so. It has been done elsewhere and can be done in Ghana. Are we asking our graduates to enter into farming and be doomed to such a life?

Conclusions

There have been several attempts to promote agricultural development in the country. Regional agricultural development programs were in vogue in the 70s through the 80s and 90s, notably: Upper Regional Agricultural Development Program (URADEP), Volta Regional Agricultural Development Program (VORADEP) Brong Ahafo Regional Agricultural Development Program (BARDEP). These were followed up by the Sasakawa Project, the National Agricultural Extension Project (NAEP). They contributed to the development of agriculture and yet the countrys productivity and expansion have remained almost the same. The main reason is that the fundamentals are simply not there, it is not because the projects were themselves badly designed but they were not anchored in the right institutional framework.

Over a long period of time, the country has not paid much attention to developing resilient institutions that will facilitate the development of the sector. I learnt recently, to my surprise, that some African footballers have been made ambassadors to convince our leaders to pay attention to the agriculture. It seems to me that most people consider farmers as the only ones whose livelihoods depend on agriculture and constituting a group who hardly embark on strikes. Their voices are not heard. Beyond the farm, think about the number of people selling agricultural products in our markets in every town and city, those who prepare our kenkey, koko, fried and roasted plantain and yams, waakye, TZ, pito, butchers, the textile and apparel industry and those who sell them etc. Reflect on those who work at the chop bars and restaurants, those who make the plates and cups, those who provide the chairs and housing in those facilities, blacksmiths, agricultural machinery, and chemicals, those transporting agricultural products, teachers, extension workers, agricultural communicators, lawyers etc. Allow your imagination to run wild and you will find that numerous occupations depend on the farm and how a vibrant agricultural sector can propel an economy in different ways.

The current institutional structures have simply not kept pace with agricultural development, and as they are man-made, they can be unmade by man. They were created not by the ordinary Ghanaian but by those entrusted with the management of the country from colonial times to present day. For example, the 166 laws governing the acquisition and management of land were made by our managers and they are the ones who can change things. What is required is a sense of purpose and a vision to make agriculture the real engine for employment and growth. I do support the call for the youth to go into farming but we have to create a conducive/ enabling environment for it to happen. The current institutional support is not good enough and undermines the essence of the call. We should not blame the youth for selling dog chains. The difference between countries who have benefitted from their land through agriculture and us is not because they have better and richer soils, but rather it is the way they developed their institutions that allow land to be acquired, transferred with ease, at reasonable cost, with good access to affordable finance and well-structured markets with differentiation between producers and buyers.