Effective warehouse receipt system essential for agric pricing – Osei-Owusu
Mr Eric Osei-Owusu, Chief Executive Officer of the National Food Buffer Stock Company has called for the implementation of an effective warehouse receipt system to ensure fair pricing in the agricultural sector.
He explained that the system entailed some documentation by warehouse operators as evidence that a specified commodity of stated quantity and quality had been deposited at a particular location, enabling farmers to deposit storable goods, mostly grains, in exchange for a warehouse receipt.
He noted that the system if well regulated, would curtail cheating on weights and measures, ease access to finance at all levels in the marketing chain, moderate seasonal price variability and promote instruments to mitigate price risks.
Mr Osei-Owusu made the call during a panel discussion in Accra on the Ghana Journalists Association programme dubbed “Business Advocate” on Ghana Television, which is supported by the BUSAC Fund, DANIDA, United States Agency for International Development and the European Union.
Speaking on the topic “Enhancing Grains Pricing Policy in Ghana”, he said the absence of a national pricing policy in the sector had made it difficult to meet the standard of pricing mechanisms on the international market.
Mr Osei-Owusu said extension officers should intensify education on new approaches to farming for farmers to improve their yields since the quality of farm produce was critical in determination pricing.
He said the pricing mechanism for grains was affected by storage and transport infrastructure in food markets, limited access to commodity finance, unstable marketing margins, risk of theft and difficulty in enforcing contracts.
The pricing of grains is of interest and importance to every family, individuals and institutions, because their costs have implications for the budgets of households, institutions and businesses.
However, market forces do not determine the prices of grains. Grain sellers, poultry feed millers and private consumers are not able to compete with government due to huge discounts placed on grains purchased by government.
Fixed prices do not meet the operational cost of producers which in the long-run affect farmers’ ability to produce on a large-scale to meet local consumption.
Mr Richard Djanie, Business Development and Outreach Manager for the Ghana Grains Council said the Council had been engaged in advocacy to enhance the grains pricing policy in the country.
He said the absence of a functioning commodity exchange in the country, as well as the absence of a standardized pricing mechanism in the grains sector, affect the quality of grains produced for consumption.
The Council was of the view that the quality of grains produced also struggle to compete with those in other parts of Africa where proper pricing mechanisms are largely determined by market forces.
Nii Quaye, Director in charge of Agriculture Business Unit at the Ministry of Food and Agriculture (MOFA), expressed worry about farmers’ inability to produce quality grains, which affected the pricing system, saying it behoved on farmers to improve upon the quality of their produce to meet global demands.
He called for effective collaboration between MOFA and the Ministry of Trade and Industry to engage stakeholders in the sector to chart the path for addressing the inefficiencies in the pricing system for optimum results.
Mr Gabriel Essilfie, Chairman of the Parliamentary Select Committee on Food, Agriculture and Cocoa Affairs, said their mandate was to play an oversight role of government policies on agricultural matters, saying there was work to be done on the pricing system.
Mr Essilfie was of the view that appropriate structures need to be put in place before tackling the pricing system in the sector.