Prices for soya, maize, and rice show significant volatility throughout the year. Due to the lack of warehouse capacity in the northern regions, prices tend to be at their absolute lowest point around harvest time, and then rise dramatically later in the year when existing storage runs out. This creates marketing challenges for actors throughout the VC, including farmers and buyers. Warehouse receipt programs, like that of the GGC, enable farmers to become price makers rather than price takers, and help agribusinesses manage their supply chains more effectively by ensuring timely delivery of quality raw materials. While the GGC’s warehouse receipt program has enormous upside potential, there is inadequate awareness among prospective users on the benefits of the system. The sustainability of the system also hinges on adequate capacity among warehouse operators. For example, operators would benefit from training on grades and standards, operations, and how to effectively interact with the newly established commodity exchange (GCX).
While certain industry players have extensive technical and commercial training and skills, such professionalization is not widespread. The GGC intends to change that by creating a training center/advisory practice that builds on the expertise and knowledge of its staff and core members to offer such professional advisory services.
The GGC was incorporated in February 2010 with support from the USAID Agribusiness Trade Promotion (ATP) and ADVANCE projects, and is mandated to represent the interests of private sector operators in the grains VC and increase their productivity, and profitability. The GGC is comprised of key primary and secondary actors in the grains VC, including agricultural input dealers, grain producers and traders, aggregators, warehouse operators, grain processors, financial and insurance institutions, and other agricultural service providers. Since its inception, the GGC has established the requirements for regulated warehouse certification, enforced an agreed code of practices for the grains industry, and trained members to set up and manage a warehouse receipt program launched in 2012, the first of its kind in West Africa. The program has focused on maize and soya beans, key food security crops in Ghana, with plans to include other grain crops. This initial effort has enabled GGC producers, traders, and processors to hold stock back until the lean season, allowing them to access markets on more equitable terms and enhancing the efficiency of the entire maize VC. The warehouse receipt program allows GGC members to deposit their grains in a GGC-certified warehouse and meet short-term needs for cash by borrowing from a GGC member bank or other member lending institution.
The GGC is seeking an investment of $1.26 million for capital expenditure and working capital to build a center of industry expertise to provide professional training and advisory services to Ghana’s grain industry. The GCC will consider both equity and debt solutions, depending on cost and terms.
The GGC may require a BAS provider to help raise financing for the project.
A USAID-FinGAP ERR has not been conducted yet.
Numerous ongoing business development initiatives by GoG and its partners are supporting a conducive environment for GCC’s investment:
- USAID–ACDI/VOCA ADVANCE
- Alliance for a Green Revolution in Africa (AGRA)
- Glico insurance policies for warehouse operators and farmers
Kweku Akuffo, +233 544343729; firstname.lastname@example.org