The Export, Trade, Agricultural And Industrial Development Fund
A stakeholder’s conference has been held in Accra to assess the impact of the Export, Trade, Agricultural and Industrial Development Fund on small holder farmers who produce the majority of the food crops consumed by Ghanaians. The Export Development and Investment Fund (EDIF) currently the Export Trade, Agricultural and Industrial Development Fund (EDAIF) was established by the Export Development and Investment Fund Act, 2000 (Act 582), and it became operational in 2001 as an agency of the Ministry of Trade and Industry.
The act was, however, amended in 2001 by the Export Development and Investment Fund (Amendment) Act, 2011 (Act 823), to expand the scope of application of the fund to include the development and promotion of agro-processing industry, hence the change of the name of the fund to EDAIF.
EDAIF operates by handing over money to designated financial instructions or banks like Stanchart, Stanbic and the ADB. These banks then evaluate prospective applicants to find out about their financial viability before they get the funding.
The primary source of funding for the EDAIF fund is money realized from the divestiture of state owned enterprises.
What do small holder farmers and farm based CSOs have to say about the fund?
Edward Kareweh (Deputy General Secretary, GAWU)
“My major concern with the Export Trade, Agricultural and Industrial Development Fund is that it is an ideological orientation which retards progress. It simply encourages the export of raw materials to feed the industries of the metropolitan areas of the world whilst local industries scrunch up and suffer.
To use state resources to meet the taste of foreign consumers and further the development needs of external people is detrimental to the national interest and runs contrary to the principles that underline nation building. We must divert financial aid to support the activities of local farmers to meet domestic demands.
Over the past three decades Africa has proven to provide the most buoyant market for trade in all manner of commodities but unfortunately, the continent has not benefitted. Foreign multinational companies are trooping into Africa in droves siphoning super profits out of the continent and yet our own people are not empowered to also take advantage of this new era.
The time has come for us to change our mindset of development by concentrating on exploiting the labour and the other resources of Ghana towards economic transformation.
The working forces of this country have proven many times that when the leadership of the country supports their initiatives, they can turn over the fortunes of our country and bring about comfort and meaningful progress in the lives of our people. Why must we have arable lands which can feed every Ghanaian three times a day and yet some go to bed without food in their stomachs? We cannot simply allow a situation where farming is only conducted so that some businessman want to make money. Why are many workers spending a huge chunk of their wages and salaries on imported food? This situation is completely not acceptable and we have to take a new turn in how we run the affairs of this country ”
Frank Bodze (Programme Manager in Governance at WILDAF)
“The Export Trade, Agricultural and Industrial Development Fund is a good initiative of government which will help our farmers to have funds to support agriculture in Ghana. My view is that there is a need to streamline the programme so that the funds can go to those who need them most and here I mean the peasant farmers who provide the majority of the food we eat.
If we have the resources to produce enough food we would not need to import food into this country because excessive imports just destroys the industrial base of the country. We must also put in place stringent measures to ensure that the people who receive the funding pay back so that others can benefit.”
Victoria Adongo (Director of Programmes, Peasant Farmers Association of Ghana)
“It is very important for policy makers to recognize that it is the small holder farmers that feed the twenty-five million people in Ghana and therefore every policy that emanates from the state must first seek to support local production.
We do not condemn the EDAIF programme but our worry is that it is overly concentrated on export of the produce of our hard working farmers. Small farmers also want to expand and go commercial but we prefer that our effort and our produce first benefit the local people and that is why we are demanding a reform of the Export Trade, Agricultural and Industrial Development Fund to support small farmers who feed the local population.
One benefit of this reformation is that once the local poultry farmer is well resourced and he is able to meet domestic demand, we will then be emboldened to halt the import of frozen chicken which does not provide the nutrition needed by the consumer.
The other benefit is that maize and soya farmers who produce feed for the local poultry industry will grow, they will employ more people and by that we can contribute effectively to the development of the country. We will slip and fall as farmers if we continue to rely on grants. We must move away from our current over-reliance on grants and begin thinking as businessmen and women who can manage our affairs”
Kweku Boateng (Vegetable Farmer)
“My aim in granting this interview is not to express disapproval of the Export Trade, Agricultural and Industrial Development Fund but to call for a re-engineering of the programme and get it to redirect its focus to solve the problems that confront local food crop producers.
My position on the EDAIF funding is that at least it makes money readily available to qualified farmers. It takes away a major burden hanging on the necks of a farmer who seeks to increase productivity for his wellbeing and that of the society as a whole but there is an issue which has to be addressed.
Physical cash alone is not what the farmer needs. We also need markets which does not only buy cash crops but crops cultivated by the majority of our farmers. Under the Kwame Nkrumah government, efforts were made and in fact there was a programme to buy the products of small farmers by creating a ready market for them. There were specially set up brigades that bought the produce of farmers and extended other support to them so that our country can be food secure and that was how come our country became self sufficient in food production within a relatively short period of time.
If you proceed by dolling out physical cash to the farmer in grants and loans and he does not have the market to sell what he has produced, how can he pay back?
South Africa has the biggest vegetable market in the world because the government set up councils to support farmers who produce all kinds of crops for local and the foreign market. Vegetable farmers in Johannesburg, for instance, send their produce to the Johannesburg Food Councils who buy them and sell on the local market. Cocoyam, potato and cassava farmers have grades which determine the prices of their produce and every farmer stands to benefit.
At least in the case of Ghana, I humbly suggest that EDAIF uses our money in their possession to build infrastructure and make markets available for farmers to sell the product of their labour, make money and thereby remove the over reliance on grants and credit facilities.”
Charles Nyaaba (PFAG)
“The initial plan of the EDAIF fund was to promote export but it has been reviewed to cater for agriculture. What is happening is that the fund is being managed by a secretariat and a 13 member board of EDAIF but they do not give the money directly to the farmers. They put it in designated financial institutions like ADB, Stanbic Bank, Stanchart Bank and some others. Now these banks evaluate prospective applicants to find out if that person is financial viable when he gets the loan.
They want to know whether that person can pay back before they will advance the money to the farmer and they will make follow ups to recover the money and give it back to EDAIF. Now the challenge with small holder farmers is that you need to write a proposal and then they will access it to find out if you meet the criteria of the fund before you get it. And that is the area where small-holder farmers are having a problem because majority of them are not able to write good proposals to help them access the fund. It also then means that elite farmers or big-time farmers who have the capacity and business plans and are able to write good proposals, stand better chance of benefitting from the fund than small holder farmers.
However the grant facility which is also meant to help the farmers to come up is what is disbursed by EDAIF itself as an organization. This that one is interest-free so farmers do not need to write long and winding proposals. Nonetheless, EDAIF will identify prospective farmer associations or groups and give them that money to do their activities.
Our other concern is that the fund first considers farmers who are engaged in the production of cash crops for export and we demand that the time has come to support farmers who grow traditional crops for the local market.
If you look very critically you will realize that we are not self sufficient in producing all the food we eat in this country, we still import some food so why do you put concentration in producing food for export when you still have the potential to expand your domestic industry?
Apart from that even the crops they are asking us to produce for export are crops that the farmers do not have specialties in those areas. For instance we know exotic mangoes and pineapples are not what majority of farmers cultivate so they are forced to go in there but they will not be able to do it well as they do with cassava, maize, pepper, yam, groundnuts and several others which they have been doing over the years but because they need the credit, they are compelled to go in and at the end of the day they are not able to do it well meanwhile we are not sufficient in the crops they are producing.
EDAIF has stated that they are going do a complete assessment of the programme so we hope that when they do those reviews they will try to consider the indigenous or traditional agriculture where our people have the expertise to produce more so that if we produce more to feed the local market then we can begin thinking about storing some for the future and export what we cannot save.”
Ben Kanati (Rice Farmer)
“My problem with EDAIF programme was that I did not really understand the components of the programme. As a rice farmer I have always held that we were not part of the programme. It was by attending an evaluation workshop that I was made to understand that already twenty-one million Ghana Cedis has been devoted by the EDAIF programme towards rice production and that a commodity exchange has been set up by the government to help farmers market their produce. But what kinds of farmers benefitted from the funding?
How does the small holder really access these programmes? Does the commodity exchange market of government accept all produce or are there restrictions to what you can send there? The fund must also be flexible so that all of us can access it.
One other observation I have made of the fund is that it tends to lend more support to farmers who produce cash crops for foreign markets and that approach is problematic because it deprives local farmers of the revenue to expand and grow to meet the local market. On the other hand pressure builds for lower tariffs for already highly subsidized imported goods which in turn affects government’s tax revenue. When this happens, it constrains government space and we end up going to the IMF and the World Bank with with attendant negative social consequences.”
Godwin Atokpleh ( Fmr. Vice President of PFAG)
“I think there needs to be a lot of sensitization meeting for the EDAIF programme especially for some of our farmers who can neither read nor write but are in the forefront of food production.
It is a major challenge for the fund if there are some farmers who cannot access it because they do not know about it or even when they do, they have no idea how to also benefit from it.
The other concern I have is that EDAIF is now moving from a grant scheme to a loan scheme without an adequate evaluation of whether farmers have the capacity to stand on their own when the grants are withdrawn. We need to do a lot more about these problems and to ensure that the programme does not become the sole preserve of a few sophisticated farmers who only seek to produce for export and contribute nothing to the balanced meals Ghanaian eat on their dinning tables.”
Duncan Amoah (Rice Farmer)
“ Part of our problem with this fund is that we are unable to apply for it because of the processes that are involved. In the first place, the money is not given to the farmers directly by the EDAIF secretariat. The money is deposited in some private and public banks to do an examination of the people who apply to satisfy themselves that the people can pay back the money when it is given to them.
Unfortuately, some of us are unable to write the proposals so we cannot meet the criteria that is set. That is where we have a problem because some of us cannot read nor write the standard proposals that will help us to meet the expectation of the bankers.
For these and other reasons we call on the government to prevail on the fund managers to consider these concerns of local farmers who were meant to be the primary beneficiaries of the fund.”