04/13/23 1
1
PRESENTATION AT AGRIC. SECTOR JOINT PRESENTATION AT AGRIC. SECTOR JOINT REVIEW REVIEW
NRGP EXPERIENCENRGP EXPERIENCE
GRAND MENSVIC HOTEL GRAND MENSVIC HOTEL ACCRA ACCRA
JUNE 22-24, 2011JUNE 22-24, 2011
BY: PASCHAL B. DEREBY: PASCHAL B. DEREVALUE CHAIN SPECIALISTVALUE CHAIN SPECIALIST
Paschal B. Dere VCS-NRGP
04/13/23 2Paschal B. Dere VCS-NRGP
04/13/23Paschal B. Dere VCS-NRGP 3
4
FARMER
Banks/FIs
•Warehouse
•Commodity Dealers•Processor
s
Input suppliers
BDS & Agro-tech Advisors
04/13/23Paschal B. Dere VCS-NRGP
5
Is farmer/FBO creditworthy?
B/FI Advises Farmer/PO on how to improve credit worthiness
Farmer/PO Assesses her credit needs & puts application to Banks/FIs
Pre-season planning & Interface meeting b/n Marketing Company/Input supplier/Bank/FI-& Farmers/PO to confirm market for commodity (tentative px formula/qty/qly)
Bank/FI vets Farmer/PO Farmer for credit worthiness & diligence tests
Bank/FI does final diligence tests and approves loan
No
Farmer/PO acts on B/FI Advice
Yes
Farmer/FBO does final reading and understanding of loan conditions & terms of payment and contracts loan
Farmers/FBOs authorize Bank/FI to pay suppliers based on countersigned Invoices.
Farmer/FBO contracts services/goods from suppliers
STAGE 1.
04/13/23Paschal B. Dere VCS-NRGP
6
Farmer/PO comply with GAP recommendations from MoFA & FAs
Pre
-seaso
n P
lann
ing &
Inte
rface
m
eeti
ng b
/n M
ark
eti
ng C
om
pany/Inp
ut
supplie
r/B
ank/F
I-&
Farm
ers
At harvest farmer/FBO delivers produce to pre-designated buyer with whom contract has been signed at pre-season planning session (Processor, Commodity Dealer, Warehouse Receipt Operator, Cold Chain Operator etc)
The pre-designated buyer pays off farmer indebtedness (Joint Cheque farmer or FBO /Bank) to the Bank, using monetary equivalent of part of crop delivered. Balance of crop reserved for farmer to decide on when , how much and to whom to sell
STAGE 2
Has Farmer/FBO successfully repaid
loan?
NoStudy and understand reason(s) for loan default and take appropriate action
Yes
04/13/23Paschal B. Dere VCS-NRGP
7
Bank /FI Quantum of Funds Disbursed
No of FBOs
No of Farmers
District Location of Farmers
Nandom Rural Bank 10,582.00 7 89 Lawra/Lambusie
Lawra Rural Bank 14,766.00 9 96 Lawra
Sonzelle Rural Bank 10,125.00 9 95 Jirapa/Lambussie
Sissala Rural Bank 94,991.00 24 316 Sissala West and East
Builsa Rural Bank 55,352.00 27 120 Builsa
BESSFA 14,750.00 15 206 Garu-Tempane
Yapra Rural Bank 4,611.00 3 24 Pru
Kintampo Rural Bank 6,644.00 2 24 Kintampo South
AgDB 841,640.00 661058
Wa Muni/Bawku W/Yendi/Tamale metro
Total 1,053,461.00 162
2028
04/13/23Paschal B. Dere VCS-NRGP
VALUE CHAIN ACTORS: Private Sector Firms, individual farmers, traders, processors who are key participants / drivers along the commodity value chains.
CHAIN PROMOTERS/FACILITATORS: Development Organizations and those entities implementing projects/programmes using the Value Chain Approach.
VALUE CHAIN SUPPORTERS: Consulting Firms, Trainers, Technical Advisors, Financial Services Providers and Business Development Services Providers.
VALUE CHAIN POLICY MAKERS/INFLUNCERS: Ministries, Departments and Agencies.
04/13/23Paschal B. Dere VCS-NRGP 8
Knowledge sharing EVENT “MARKET ” for commodity value chain
products and services Institutionalize & professionalize value
chain practice in Ghana Cost-Share EVENT-No free riders,
eventually fully paid GOAL-BOT (build, operate & transfer
MOFA) MOLE SERIES, Professional Event Two such fora have been held so far in
November 2009 and January 2011. The 3rd VCPF is planned for January 2012
04/13/23Paschal B. Dere VCS-NRGP 9
Established a core working Group (9-11 member)
Temporarily hosted in MOFA (Value Chain Desk as Clearing House)
Mandated to draft Vision & Mission Statement
Action plan for 2011 Share knowledge electronically on List-serve
platform (Protocol the rules for sharing this list-serve) Update present list of practitioners Monitor the outcome of Buying & Selling
session at VCPF Next meeting 1st July 2011
04/13/23Paschal B. Dere VCS-NRGP 10
Should, and how can collaboration of Value Chain Practitioners and harmonization of Value Chain Programmes/Projects in Ghana be fostered?
Should Value Chain Practitioners Forum be an annual event?
What form of governance structures should be put in place for the VCPF?
Which method of Value Chain Development should we in Ghana adopt-USAID-MicroLinks, GIZ-ValueLinks
3. THE NRGP COMMODITY VALUE CHAIN BUSINESS MODELS DEVELOPED TO IMPROVE THE SMALLHOLDER
FARMER INCOMES
Special Purpose Vehicles
- Nucleus / Best Farmers
LEAD FIRM
CONTRACT FARMING
SFMC Ltd(Aggregato
r)PROCESSORS(VESTOR OILS, GHANA NUTS)
Small scale
farmers/FBOs
PROCESSORS(VESTOR
OILS, GHANA NUTS)
Small scale
farmers/FBOs
EXPORT, DOMESTIC HIGH END
SHOPS
Small scale
farmers/FBOs
NUCLEUSE FARMER (Kharma Farms, Bogu)
VEPEAG
A. Striving for Volume (3)
B. Striving for Better Price (1)
WAREHOUSE RECEIPTS & INVENTORY CREDIT (YAPRA RURAL BANK & PRU-
SENE FBOs)
3.1 THE LEAD FIRM MODEL
LEAD FIRM
SFMC Ltd(Aggregato
r)PROCESSORS(VESTOR OILS, GHANA NUTS)
Small scale
farmers/FBOs
Services provided
• Assured market
• Product quality specification
• Quantity specification
3.2 THE SPECIAL PURPOSE VEHICLE FINANCING MODEL
SPECIAL PURPOSE
VEHICLE FINANCING
PROCESSORS(VESTOR
OILS, GHANA NUTS)
Small scale
farmers/FBOs
NUCLEUSE FARMER (Khama farms)
Services provided
• Assured market
• Tractor & other mechanical services
• Fertilizer, herbicides, best production
methods
• training in group cohesiveness
• Quantity specification
3.3. THE CONTRACT-OUTGROWER FARMING MODEL
CONTRACT FARMING
EXPORT, DOMESTIC HIGH END
SHOPS
Small scale
farmers/FBOs VEPEAG
-
SMALL-SCALE FARMER
Farmers are integrated into a the production, input, financing, processing and marketing.& information exchange aspects of the value chain
CONTRACTOR
Business usually contracts farmers as producers and supplies inputs, training, technical services and point of sale
Services provided• Small farmers and contractor are interdependent
BUSINESS MODEL
No.FBOs/ Farmers
Loan Req’d (GHC)
Acres Source of
FundsExpected
Repayment
LEAD FIRM
FBOs
899
Farmers3,528,435.80 29,846
RCBs, ADB,
STANBIC100%
SPECIAL PURPOSE VEHICLES
(KHAMA Farms,
BOGU S&F Assoc
Farmers
K- 930
B-700
Kharma-138,000
WC,-55,000EQ
Bogu-148,000WC, 22,000EQ
Approx.
K-2000
B-1500
STANBIC 100%
CONTRACT FARMING
(VEPEAG)
5 FBOs
Farmers
601,865,000 60 STANBIC 100%
FBOs/FarmersBanks/FNGOs
Warehouse
Receipt
Storage loan
Crop deliveryReceipt
3.4. 2011 Pilot WR Model ( Expansion of Inventory Credit Scheme)
STAKE 1: INTAKE
FBOs/Farmers
Warehouse
Banks/FNGOs
3.4. 2011 Pilot WR Model
STAGE 2: OFF-LOADING
Repayment
Saving
s acc
ount
Withdrawals as needed
Farmers FBO identified
Pre-season meetings concluded IPB
Contracts signed
DZVCC established
Facilitation Agencies Recruited
STAGE STAGE CBP
done
Industrial crops
Yes Yes Draft Done fine-tuning in progress
Yes Yes Ongoing No
Fruits & Vegetables
YesYes buttimed
Draft Done fine-tuning in progress
No No No No
WomenCrops
Yes Yes Draft Done fine-tuning in progress
Yes Yes Ongoing No
Animals No Contract at review stage
Draft Done fine-tuning in progress
No No No NO
Certified Seed
Yes No No No No NO
04/13/23Paschal B. Dere VCS-NRGP 20
04/13/23 21Paschal B. Dere VCS-NRGP
04/13/23 22Paschal B. Dere VCS-NRGP
1. Fine–tune Cashless Transactions Model for sustainable financing of agricultural commodity value chains in Ghana
2. Professionalize & Institutionalize Value Chain Practice in Ghana