Farmers group in the Tain District of Brong Ahafo Region, have adopted a cashless transaction system that enables them to purchase farm inputs, services and sell their produce without having to exchange physical cash.
This innovation was introduced by Northern Rural Growth Programme (NRGP), an agricultural initiative being sponsored by African Development Bank and the International Fund for Agricultural Development to the tune of $104 million.
Mr Francis Ennor, District Director of Agriculture, who made this known to Ghana News Agency in an interview at Tain at the weekend, said the system is part of efforts by NRGP to promote value-chain to ensure that stakeholders work together in a co-ordinated manner.
He explained that each year, the farmers hold pre-season meetings with their partners, such as the financial institutions, input dealers, service providers and produce buyers to estimate how much their services are required by each farmers group for members to go into cultivation.
The District Director said input dealers and service providers then proceed to render these services which are then paid for by the financial institutions on behalf of the farmers as a credit in kind.
He said after harvesting, buyers of the produce deposit their payments into each farmers group account in the bank and through this, the bank recovers its investments, with the remaining serving as profit to the farmers.
The value-chain approach adopted by the district, he said had helped to transform agriculture.
Mr Ennor said a number of 17 Famer Base Organisations in the district were part of the system, while farmers belonging to the groups totalled 200.
He said the project is working with two rural banks- Nkronan Rural Bank and Beduma Rural Bank.
“Each year, members of the value-chain committee in addition to the farmers hold preseason meetings, after which they come out with a budget that spells out the services and inputs they require as well as the costs involved,” he explained.
He said these budgets are presented to the banks and then the officials begin to work with the input dealers and other service providers to supply the needs of the farmers pending payment.
The District Director said the banks had welcomed the arrangement because it has a higher and guaranteed loan recovery rate as compared to the previous system, which allowed the financial institutions to dole out cash to farmers, many of whom fail to pay back.