MPs Cry For Farmers

David Hennric Yeboah

SOME MEMBERS of Parliament have expressed worry about how financial institutions are offering loans to farmers at commercial rates.

According to the MPs who voiced their concerns in Parliament on Friday in Accra, the farmers would be subjected to so much duress in their attempt to repay the loans -a situation which is expected to worsen their plight instead of improving it since most of them are peasants.

“It is a bad idea to lend money to poor farmers at commercial rates of interest and we must find a way about this trend,” MP for Afigya Sekyere East, , emphasized when he presented a statement on the floor of the House.

He said loans given out to farmers at commercial rates could further reduce the profit of farmers.

Explaining the average commercial interest per annum in Ghana, which is about 31-35 per cent, he said the addition of other incidental charges would result in the interest sky-rocketing to about 40 per cent.

“If the farmer borrows GH¢10,000, they will end up paying about GH¢14,000”, stressing that for the farmer to be able to pay the additional GH¢4,000, the profit on the use of the GH¢10,000 must certainly be more than the GH¢4,000, otherwise the farmer would suffer a loss and be unable to repay the loan.

Hon Yeboah also lamented how banks demanded farmers' lands as collateral for loans, a situation he said was rendering most the farmers landless.

“The consequences of this are so serious that we cannot wait for it to explode before we do something about it

Giving the importance of agriculture to the economy, Hon Yeboah noted that though Government and international donors have instituted capacity-building programmes and focused on access to credit finance for the rural farmers, most farmers still have problems procuring credit.

While calling on Government to help farmers with credit, Mr. Yeboah suggested that it should also aim at increasing market access for farmers so that they are not held prisoners or captives by a few buyers.

Supporting the statement, MP for Kwadaso, Dr Afriyie Owusu Akoto, complained about the inadequate access to credit to farmers, noting that the only way to address the issue was for Government to intervene with the financial institutions to find ways of giving loans to farmers at affordable and fair rates.

Other MPs who supported the statement included, MP for Bekwai, Joseph Osei-Owusu, MP for Atwima-Mponua, Isaac Kwame Asiamah and MP for Mion, Dr. Alhassan Ahmed Yakubu.

By Sheilla Sackey