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29.10.2003 Business & Finance

Credit components are to accompany agric projects

By GNA
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Accra, Oct. 29, GNA- The Minister of Food and Agriculture, Major Courage Quashigah (Rtd), on Wednesday said it is now going to insist on credit components in the current cashew and livestock development projects in view of the problem of long term loan schemes for farmers. The two projects have been launched this year with the cashew project having 5.6 million dollars and the Livestock Development Project 5.2 million dollars credit component.

Major Quashigah said this when Mr Yaw Effah-Baafi, NDC- Kintampo asked what steps the ministry is taking to initiate long-term loan schemes for farmers engaged in cashew, sheabutter and livestock production.

The Minister said the credit facilities, will support producers, processors and marketers to allow a continuous circulation of the credit line.

Maj. Quashigah said if the producers receive credit support and the processors and marketers do not, the farmers will not be able to dispose of their produce and repayment will become a problem. He said since the two projects have longer gestation periods of between three to five years, what they need is a medium term loan that spans the gestation period.

The credit component is to be managed by the African Development Bank (ADB) at the prevailing interest of 27.30 per cent, and the farmer does not have to present any collateral to qualify, but simply, be a member of farmers association that must have a strong leadership to ensure that the members pay back.

Maj. Quashigah said the Ministry has already embarked on the animation, formation and training of Farmer Based Organizations to enhance their ability to access credit, inputs and markets.

Mr Effah-Baafi in a supplementary question asked when the loans would be disbursed to the farmers and the Minister said it has already started with the cashew project but the livestock is facing some few problems and when this is settled that would also commence.

Mr Nobert Awulley, NDC-Builsa South asked why the interest rate was so high and the Minister said it was the Bank of Ghana that determines the interest rate and the government has no control over such matters. Mr Kosi Kedem, NDC-Hohoe South asked whether the ministry would consider the establishment of a Cashew Marketing and Development Board. The Minister said if the farmers were organised properly to link producers, marketers and processors there would not be a need for the Board.

Mr Kwakye Addo, NDC-Afram Plains South asked why the Minister was silent about the sheabutter industry and the Minister said they are already being taken care of by the African Development Bank (ADB).

Mr Albert Abongo, NDC-Bongo asked whether the Ministry could negotiate for the interest rate for the loans to be reduced and the Minister said it was an issue of a complete monetary system that the ministry has no control.

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