From a peak of one million tons achieved at the start of the decade, Ghana’s annual cocoa production has declined to barely 800,000 tons – and sometimes less – in each subsequent cropping season.

“This in turn has had a dire effect on the performance of the Ghanaian economy, especially at a time that the down turn in global market prices for both gold and crude oil, the country’s other major commodity exports, have seriously constrained our foreign exchange earnings” ADI said in a statement.

The Alliance is therefore calling on the newly established administration of President Nana Akufo Addo to focus on the restoration on the country’s cocoa production level, and improve it as a major priority for policy reform and implementation going forward.

“It is most instructive in this regard, that COCOBOD’s assertions that its distribution of 60 million seedlings annually since 2013 has been sufficient to support increased production are questionable. The hard truth is that, an estimated 60 – 70% of those seedlings procured for distribution to cocoa farmers have not actually supported increased production because COCOBOD failed to follow up with the requisite technical and financial support services that would have ensured the efficient and effective use of the seedlings distributed.”

“The result has been substantial financial loss to the state. At the barest minimum, the loss of effectiveness of one third of the seedlings procured at GHc2 per seedling translates into a financial waste of some GHc80 million. Add another 20% of this as wasted cost of handling, transport storage etc; and the loss to the state annually amounts to GHc96 million.

The ADI noted that “if the loss to the state is computed on the basis of potential export revenues foregone, rather than input expenditure wasted, then the losses increase exponentially into the region of hundreds of millions of US dollars annually. The lesson here is that, support to cocoa farmers by the state needs to be provided in a holistic manner that addresses all the challenges of every cocoa farmer in Ghana. Simply providing seedlings and fertilizer to some of them falls far short of optimal.”

Proposals for the cocoa sector

“Here it is necessary to emphasize that, the state must support each and every cocoa farmer because every cocoa farmer is valuable and is deserving of state support. We therefore propose that the new government adopts a strategy of applying Key Performance Indicators for each stage of the production chain, from planting, right through to harvesting.”

“This proposed process would start from establishing an accurate, up to date database which identifies each cocoa farmer, location of each cocoa farm and size of land under cultivation, as well as a physical and topological map of each farm. Using this information, the state would be well positioned to make provision for suitable new, climate-smart technologies, across various processes such as mulching practices and pre-planting of plantain suckers one year in advance.”

According to the Alliance “Equally important are strategies to protect cocoa farms from diseases such as mistletoe which have been ravaging them in recent years. This requires the resumption of effective mass spraying services. Also, since most cocoa farms in Ghana are aged, they require automated pruning and support services.”

“Financial service support for farmers also needs to be improved. In this regard, basic credit to farmers is an imperative, to enable them meet labour and production input costs. In view of the well documented difficulties in accessing agricultural finance, there is the urgent need to avail cocoa farms of agricultural insurance, which would make access to credit easier by protecting lenders against credit risk.”

“To enable our proposed enhanced support services by the state to be efficiently and effectively implemented, we believe that government has two options. One would be for COCOBOD to be given significantly enhanced capacity in the form of manpower and material resources to meet its expanded mandate and operations. The other would be for the requisite holistic support services to be outsourced to the private sector, with COCOBOD mandated to ensure effective monitoring of their operations and activities to ensure efficiency and effectiveness.”

Considering the widely accepted superiority of the private sector in terms of efficient use of resources, the ADI recommended the latter option.

“This would involve the provision of state support through the private sector in return for regulated service fees based on output performance. There are two clear advantages derivable from this. One is that farmers would not be able to divert financial resource support from the state to other, unproductive purposes.”

“The other is that competitive, private sector support would ensure that farmers actually get the requisite support of the right quantum and nature. Private sector service providers, having been selected by government on the basis of competitive bidding, would be evaluated and rewarded on the basis of the efficiency and effectiveness of their services in terms of their facilitation of actual output. Thus would serve as the incentive to ensure that their services are delivered at the right time, in the right quantum and at most competitive cost, on a holistic basis, covering the supply of inputs such as seedlings and fertilizer, the provision of technical services such as mass spraying and pruning, and the facilitation of access to crucial financial services, namely credit and risk management through agricultural insurance.”

“Instructively, our proposed business model is already being implemented for selected cocoa farms in some parts of the country through collaboration between the Mastercard Foundation and a private agricultural services provider, Pree-pez Limited. This however is limited in scope because it does not involve any support from the state, and is therefore being executed strictly on commercial basis. However, the results so far have been very impressive with regards to the effects of the intervention on production from the beneficiary farms.”

“Crucial to the efficiency of the proposed model, involving state support would be monitoring of both inputs and the resultant output. COCOBOD would implement a reporting system that tracks the progress made by each and every farm, resulting from the state sponsored support delivered through private sector service providers. Here government would use GPS technology for real time reporting to monitor implementation.”

“Our proposed model fits in with the philosophy of the new government with regards to using the private sector to mobilize material resources and technical capabilities to generate productive capacity.”

“We hope our proposed model is given close consideration, and we stand ready to provide details on how the model works, including empirical analyses of the similar model being implemented by the Mastercard Foundation and Pree-pez Limited. We are confident that properly designed and implemented it would ensure a quantum leap in productivity and resultant output in Ghana’s cocoa industry in a most cost efficient and effective manner.”
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By: citifmonline.com/Ghana

The post ADI proposes major cocoa sector reforms appeared first on Citi 97.3 FM - Relevant Radio. Always.

The group said this in a congratulatory message to the President-elect on his electoral victory, and consequent mandate to form and lead the government over the next four years.

“We are optimistic that the incoming President will oversee changes in the operating environment for businesses that will make it more private enterprise friendly, and will implement macro-economic policies that will make Ghana more attractive for both local and foreign investment, while significantly improving the living standards of the general populace. We also congratulate all the winners of Parliamentary seats and look forward to their enlightened, committed, efforts to devise and pass legislation that will benefit Ghana and its citizens.”

“We hold the view that the expansionary, supply-side driven economic policies mooted by the incoming government are in the right direction and our members are committed to supporting the efforts of the State in actualizing them for the benefit of all Ghanaians.”

The group is however demanding that the incoming government goes beyond the policies proposed in its election manifesto, to introduce further policies that have the potential to radically transform Ghana’s development paradigm.

“To this end, we advocate that the incoming government adopt the following specific policies in furtherance of its agenda for accelerated economic growth and restructuring of the economy for sustainable development over the long term.”

•The one district, one industry policy should be a minimum, rather than an ultimate target. The fact is that the one district, one industry policy is needed in that it would ensure a minimum level of industrialization, and consequent value addition, wealth creation and employment generation in every district, thus ensuring the spread of industrial activity and its benefits nationwide.

However, not all districts are equally endowed with inputs for industrial production; indeed some districts have the potential to host several economically viable projects, and such districts should not be deprived of the opportunity to fully fulfill their potentials. Rather government should deliberately encourage and indeed facilitate as many industries as are viable in each district.

•Churches should be encouraged and facilitated to own businesses, especially in the hinterlands, where they are potentially the most capable institutional investors available. They possess the requisite capital, have access to capable human resources and importantly, are more likely to apply ethical conduct to their operations.
Besides this holds the potential to resolve the long-debated issue of taxation of churches. If they are actively involved in business, they can be taxed on their business profits rather than on their collections.

•Deliberate efforts need to be made to enhance the readiness of the Civil Service to perform its roles. In particular, we insist that the incoming government establishes the Advisory Board for each ministry as demanded by the Civil Service Law of 1993. The law calls for every Ministry to have an Advisory Board which consists, among others of the sector Minister, Deputy Minister and representatives of the three private sector organizations that have the most interaction with the Ministry. The purpose of the Advisory Boards is to facilitate optimal interface between each Ministry and the private sector which it is mandated to both support and regulate.

We assert that the Advisory Boards would be crucial in improving the quality of service provided the private sector by government. Crucially, they are required by law and the failure of successive governments in Ghana to constitute them has made them fall foul of the law and indeed exposes government to corrective legal action.

•There is the need for reforms in the tertiary sector in order to make its graduates more relevant and useful when they begin their working careers. To this end there is the need to move from paper-based education to virtual modes of education, using modern technology. This will allow for the immediate addition of new things into the curricula where relevant.

•Related to this is the need to establish an educational sector alliance between the tertiary institutions and industry, under which industry can develop curricula for tertiary institutions based on the skills and knowledge they actually need for their practical operations. Students who go through such industry-driven courses could then go on to do internships/industrial attachments with organizations that need those skills in order to learn precisely how to deploy them.

•Finally, we strongly recommend that the National Service Scheme be redesigned as a private sector driven scheme, rather than the government driven scheme which it is currently. This would require private sector organizations to be given the chance to take on NSS members ahead of the public sector. Since NSS members are paid below market rates, government stands to make revenues from charging beneficiary private enterprises a fee for letting them use Scheme members on the cheap.

This the group says would also improve the chances of fresh tertiary graduates being employed, because of their exposure to potential private sector employers and the practical skills and competencies they would learn during their national service year

“ADI will continue to come up with well thought out policy recommendations and suggestions into the future, based on the practical needs and experiences of the corporate sector. Importantly, our policy concepts are based on the modern economy which has best international practices and the optimal use of technology as its pillars. We welcome new membership from new generation entrepreneurs and industrialists who wish to contribute to Ghana’s accelerated growth and development through advocacy for a better environment for responsible and beneficial economic activity to flourish,” the group said in a statement.
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By: citifmonline.com/Ghana

The post ADI urges new development policies beyond manifesto promises appeared first on Citi 97.3 FM - Relevant Radio. Always.