The Ministry of Finance and Economic Planning has launched a financial assistance project to support more than 540,000 smallholder rural farmers spread across six regions in the country.

The International Fund for Agricultural Development (IFAD) is funding the implementation of the Affordable Agricultural Financing for Resilient Rural Development (AAFORD) project to be implemented in the Bono, Bono East, Ahafo, Northern, Savannah and North East Regions.

It would provide services directly to about 75,000 poor rural households, and indirectly to about 465,000 individuals in smallholder households to support food security.

This would also improve the living standards of smallholder farmers, poor and vulnerable women, and the youth in the beneficiary regions.

Dr. Mohammed Amin Adam, a Minister of State at the Ministry of Finance, who launched the project in Sunyani highlighted the contributions of the agriculture sector to national development, saying the sector remained an essential contributor to Ghana’s export earnings.

He said the sector was also a significant source of inputs for the manufacturing industry, with two-thirds of non-oil manufacturing depending on agriculture for raw materials, while at the same time providing over 90 per cent of the food needs of the country.

According to the Third Ghana Economic Update 2020 by the World Bank, around 71 per cent of formal employment in rural areas is in the farming sector, indicating the importance of increasing agrarian incomes as a means of lowering rural poverty.

The Minister said agribusiness had a very high multiplier effect on employment, creating over 750 jobs for every additional US$1 million dollars of output as indicated by the Ghana Economic Update 2018.

Yet, Dr Adam added agricultural growth was affected by low productivity and competitiveness, saying rain-fed agriculture was practised in around 96 per cent of the farming area, informal private small-scale irrigation was prevalent in three per cent of the area and formal irrigation covers 0.4 per cent of the agricultural lands.

He said due to the importance of agriculture to the economy and the livelihoods of the ordinary citizenry, the government over the years had conscientiously introduced policies to boost the sector and improve the livelihoods of rural folks and to curtail poverty levels among its citizens.

Notable among such policies, Dr Adam mentioned included the National Development Policy Framework (MNDPF 2018-2021), which recognised the growth of agriculture as the main driving force for rural development and transformation, as well as the Planting for Food and Jobs (PfFJs) initiative focusing on smallholders with two-three acres land to access improved seeds and fertilizers at 50 per cent subsidy, extension services and marketing opportunities.

The Planting for Exports and Rural Development (PERD) initiative focused on improving the productivity of export-oriented tree crops such as cashew, coffee, cotton and coconut and the Ghana Commodities Exchange (GCX).

This was to help farmers sell their products at fair and competitive prices by providing them with real-time price and market information while facilitating their access to financial institutions for loans and financing opportunities.

He said the Ghana Incentive-based Risk Sharing System for Agricultural Lending (GIRSAL) to de-risk agribusiness financing by Ghanaian financial institutions, and thereby increase lending to the agricultural sector also remained a laudable initiative to boost the agriculture sector as well.

The AAFORD project, he added, had the objective of improving productivity, income and resilience of smallholder farmers, vulnerable women, and the youth.

That objective would be achieved through increased access to affordable finance in support of better market linkages, sustainable and climate change-adapted agricultural intensification, skills, and enterprise development in agricultural value chains, supporting inclusive policy engagement and building on women and youth potentials as untapped resources for family resilience.

Dr Amin expressed the government’s appreciation to IFAD for its continuous effort in supporting her programmes aimed at developing the agricultural sector, which remained the backbone of the country’s economy.

Since 1980, he said IFAD’s interventions had supported a range of programmes in the country, focusing on areas such as agricultural productivity improvement, developing rural institutions, marketing through off-taker linkages, supporting access to finance, youth skills development and youth micro-enterprises, interventions which had led to the development of resilient livelihood for Ghanaians.

Contributing through a Zoom meeting, Mrs Laskshmi Moola, the Country Director of IFAD said the implementation of the AAFORD would greatly help Ghana achieve the objectives of the second phase of the government’s PfFJs recently launched by President Nana Addo Dankwa Akufo-Addo.

She called for support from everybody so that the project’s implementation would be successful and achieve desirable outcomes.

Mr Godwin Anku, the AAFORD Project Coordinator, said the project’s implementation would further enhance the capacity of the target group to access affordable financing leading to increases in smallholder farmers’ marketed surpluses and household welfare and increased businesses for financial institutions too.