Graphic Business News

Is it time for an agric emergency fund?

By: Ama Amankwah Baafi
The invasion of the fall armyworm destroyed about 100 per cent of maize farms
The invasion of the fall armyworm destroyed about 100 per cent of maize farms

The changing trends in agriculture with its implications on the livelihood of farmers (especially smallholders), food security and other related issues, has given rise to the discourse on whether to have an emergency fund (EF) to support certain structures within the sector in Ghana.
Proponents say such a fund will enhance the capacity of the sector ministry and the country generally to respond to emergency situations.
About GH₵10 million was spent on insecticides to combat the fall armyworm (FAW) outbreak in 2017. First detected in 2016 in Ghana, the invasion in 2017 resulted in the destruction of about 14,000 hectares of maize fields, and which were brought under control with the destruction of 78 hectares of maize fields using a total of 120,000 litres and 20,000 kg of pesticides. 

The FAW is a new pest in Africa that attacks maize and feeds on a range of other crops, including millet, sorghum, rice, wheat, sugar cane and vegetables.
A national taskforce for the control and management of the invasion of armyworms was constituted to distribute free pesticides to farmers in the hardest hit areas.

Why needed?
Smallholder farmers are vulnerable to shocks; natural hazards, transboundary pests and diseases, socio-economic shocks, conflicts and protracted crises. During a crisis, many productive assets such as seeds, livestock and fishing equipment are lost.
At such times, government’s priority should be to help affected farmers to rebuild their lives and livelihoods as quickly as possible, while strengthening their resilience.
Experts say when effective agriculture-based response is delayed, communities suffer a domino effect of further losses that plunge them deeper into poverty.
In Ghana, the government is trying to turn around the fortunes of the sector by creating entrepreneurs through agribusiness and has, as part of the food security and emergency preparedness programme, introduced initiatives, including the Planting for Food and Jobs programme (PFJ), which witnessed a growth rate of 8.4 per cent in 2017 against an average growth rate of 3.4 per cent.
The 2019 budget states that maize yield increased by 67 per cent from 1.8mt/ha in 2017 to 3.0mt/ha in 2016; rice yield increased by 48 per cent from 2.7mt/ha to 4.0mt/ha in the same period and soya yield increased by 150 per cent from 1mt/ha to 2.5mt/ha.
On account of that, it implemented an expanded version of the PFJ in 2018 and will continue in 2019, all aimed at transforming and modernising agriculture. 
Also, government will launch the Planting for Export and Rural Development (PERD) and the Rearing for Food and Jobs (RFJ) models of the PFJ aimed at promoting selected tree crops including coconut, cashew, coffee, rubber, mango and oil palm, and diversifying from the dominant cocoa crop. 
Cumulatively, these initiatives may increase productivity and require more funding available to buy from the farmers to keep the prices of the commodities stable, lest, farmers refuse to produce in the next season.

A source at the Ministry of Food and Agriculture told the GRAPHIC BUSINESS that now there was no EF for agriculture in Ghana although there was the need for such a fund in the sector for other emerging issues.
It said natural disasters such as drought, diseases and pest attack made such a fund necessary. However, the decision lies at the ministerial and presidential level; they will have to prioritise something of that nature.
Currently, the source said the government had committed funds to store some amount of food under the National Food Buffer Stock Company (NAFCO), in case of emergency, while the PFJ was helping to increase food production.
“In case of such an event, then the shock will be less. So, they are taking steps already in that regard but then in keeping fund purposely for emergencies, I don’t know of any,” it said. 
It stated that the existence of seed banks for storage and onward distribution to local farmers was also a step to deal with emergencies.
“The aim of such a fund will be to safeguard domestic food production and if that fails, imports because there are two ways of dealing with food security. But it is better to have internal systems that are robust enough to stop the temptation of even importing,” it explained.
Therefore, the existence of adequate storage facilities such as the One district , One warehouse project is a very good step in that regard as poor storage results in high losses in the system.
“A good storage facility reduces the shock  lest you lose so much and create an emergency situation”, it added.

Stakeholder’s take
The Parliamentary Select Committee on Food, Agriculture and Cocoa Affairs has recommended the establishment of an emergency fund to deal with occurrences in the agricultural sector in its report on the 2019 budget estimates of the MOFA, drawing on from the FAW invasion.
The Executive President of the Chamber of Agribusiness Ghana, Mr Anthony Selorm Morrison, said like every industry, it was necessary to prepare for emergencies and if there was no general emergency fund for the country, then there was the need to look at some targeted industry.
He noted that agriculture was prone to natural disasters-climate issues and artificial disasters-bush fire, bad roads that did not facilitate the transportation of raw materials from the farm gate to the markets.  
“I support the need for EF for agric in that we have seen in the past two years the havoc the FAW invasion has caused and which led to the declaration of an agric state of emergency. But there was no standby fund in such an emergency,” he recalled.
Mr Morrison said, “You don’t declare a state of emergency before you begin to look for how to mobilise funds to fuel the emergency. We should not only be looking at how to mitigate the emergencies but also look at it from how we can prevent or forestall the emergencies after all.”
Other uses for EF
However, he explained that there was no point to keep huge amount of money in a fund awaiting an emergency, while there were issues of production to solve or food prices going up leading to imports.
He said such money could be used to solve the problem. Thus, there should be a formula / a structure of how the money ought to be used, while learning from other jurisdiction how such EF for agric had been structured and used, citing Canada, Australia and the United States of America.
“EF can also not necessarily mean that there is disaster but is more of economic activity. If Ghana produces so many tonnes of maize and we have excess, government can take in the maize and use the EF to pay the farmers so they will  produce more next season , or else due to the glut, they won’t produce but plant other crops which will lead to increase in prices,” he deduced.