The Ghana Commodity Exchange (GCX) this week integrated 20 farmer-based organizations, representing over 60,000 small scale farmers in maize, soya bean and other crop farmers to trade on its electronic platform.
The farmers will receive a range of services which include grain testing, grading, weighing, storage, re-bagging, fumigation and short-term loans (using their grains as sole collateral), and other financial services.
The farmer groups are mainly in 100 districts in the Northern, North East, Upper East, Upper West, Savannah, Bono, Brong Ahafo, Ahafo, Ashanti and Greater Accra Regions.
The Ghana Commodity Exchange with an agenda to link Ghanaian small-scale farmers to commodity and financial markets in Ghana, started trading late last year in White and Yellow maize contracts. The Exchange has recently added soya bean contracts to its list of traded commodities and will soon add sesame seeds and sorghum.
The farmer groups or their representatives will be registered members of the Exchange and will be eligible to trade commodities.
The Exchange is regulated by the Ghana Securities and Exchange Commission (SEC), hence it is necessary for the farmer groups to become members to enjoy the protection under the Law as well as other privileges that come with GCX membership, which include free post-harvest management training, free access to GCX price and market information, free linkage to markets in Ghana and West Africa, access to safely deposit their grains in GCX certified warehouses across the country and be issued GCX warehouse receipts which could be used as collateral for loans from Ghanaian banks.
GCX warehouse receipts provide proof of ownership of grains of a certain quality and quantity. Currently GCX has over 120 members, comprising 40 farmer groups representing over 120,000 farmers, mostly small-holder farmers.
The Exchange has so far signed and integrated 25 commodity brokers to represent farmers and other market actors who are constrained from trading on the GCX platform by themselves.
The vision of GCX is to create a marketplace for Ghanaian farmers that is efficient and transparent, that eliminates speculation from middlemen and reduces waiting time for payments and delivery.
The farmers are also able to discover true prices and volumes presented to the Exchange for trade. The Government of Ghana has supported the GCX financially in the acquisition of a world class trading platform, warehouses with laboratory facilities to test, grade and store commodities, and facilities to settle and deliver commodities within 24 hours of trade.