Investment Opportunities in Infrastructure that supports growth in Agriculture Mechanization Irrigation Warehousing
Ghana Agribusiness Investment Summit
Movenpick Ambassador Hotel-Accra Ghana April 29th 2014
Planning investments for enhanced agricultural productivity • The Ghana economy is strongly dominated by the agriculture sector. • It contributes a significant percent of trade in value and a raw materials to industries and provides employment for the majority of our people. • Despite this domination and the fact that agriculture is backed with good policy documents and statements, investment in the sector is still grossly underdeveloped. • Furthermore, 30 to 40 percent of agricultural produce is lost owing to poor post-harvest handling, storage and processing methods. • Therefore, there is high potential for lateral expansion of the agriculture sector at all levels. • The low level of investments in mechanisation, irrigation infrastructure and water management as well as efficient warehousing systems in agriculture have been cited as some of the main constraints hindering the modernization of agriculture and food production systems in Africa and Ghana is no exception.
Mechanization Investment Opportunities • MOFA`s 2005 baseline survey - 40% of farmers used some form of mechanization in farm activity mainly land preparation. • Investments opportunities for other farm activities such as planting, cultivation, harvesting and primary processing such as threshing, shelling and milling still very unexploited. • Rain water harvest is a major source of water for farming in the north i.e Fumbisi, Katanga, Nasia, Nabogu and Soo valleys. • Such areas are suitable for rice but get inundated quickly after the first few rains thereby making the fields unworkable. • Access to mechanised services in these areas will expedite land preparation before the rains and facilitate timely crop harvest. Since they are large open areas, and highly susceptible to bushfires. • Mechanised equipment for milling is available but processors have limited access to them and low efficiency of the available equipment is still a challenge yet to be overcome. • Opportunities exist to improve the efficiency and quality of locally manufactured equipment and machinery to food grade standard.
“If quality can be met,farmerson rain fed farms can produce rice competitively at 21% of the cost of imported premium Thairice”
To increase linkage to stable and premium rice markets and increase growth in earnings of potential of farmers we need investments that reduce: • Drudgery in rice farming (lack of machinery for farming operations) • High Pre and post-harvest loses (10%-30%) on the farmers field due labour difficulties and unavailability of machines for timely harvesting of rice • Lack of mechanization for land preparation and harvesting resulting in poor quality rice and post-harvest losses due to manual threshing of rice. Also due to delays in harvesting manually, paddy rice even of nonaromatic varieties result in very low moisture content results in high percentage of broken rice (20%) during milling
Investment Opportunities exists for appropriate Machinery/ training for harvesting to provide (e.g., smallholder appropriate harvesters as well as combine harvesters to ensure e.g. rice is harvested at the right moisture content and avoid the need for par-boiling)
Can This Process Be Improved and made cost effective
•Parboiling is necessary as it helps repair broken rice that has cracked due to harsher weather conditions in Northern Ghana  (Availability of appropriate harvesting equipment for the wet soil conditions may resolve this problem of timing)
Soaking tank
Controlled fires during steaming
Draining B4 steaming
•Further, the hull of the rice is softened during the process, decreasing the likelihood of breakage. However, there are challenges to parboiling: o Parboiling increases total processing cost o Increases turnover time o Major rice consuming markets prefer straight mill
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Investment Opportunities to promote Standardization
Irrigation As A Catalyst For Mechanization • Apart from low power inputs, African agriculture suffers from a lack of investment in irrigation compared with other regions of the world. Only about 5 percent of Africa’s arable land is irrigated, while in India the figure is 40 percent. Other parts of the developing world average about 30 percent. In a changing climate, irrigation is likely to become even more important. • This suggests that increasing the irrigated area in Africa by a factor of about ten would not be excessive, and it would make a major contribution to agricultural productivity. Investment in large irrigation schemes would be a long-term process but much might be achieved in small schemes for small groups of farms. • In mechanization terms, this suggests a substantial opportunity for sales of pumps, diesel engines and related equipment. This is a parallel mechanization opportunity, a challenge for local African manufacturing industry to take on.
Investment Opportunities in Irrigation and water management • Weather uncertainties have had great adverse impact on the nation's agriculture over the years and however irrigated agriculture beneficial is yet to be significant in Ghana. • It contributes only about 0.5% of the country's agricultural production (Breisinger et al, 2008). • Only about 11,000 hectares of land (out of identifiable irrigable area of 500,000 hectares) have been developed for formal irrigation and • However the developed area is largely underutilized due to institutional, management, input and other constraints. • Large scale irrigated agriculture in particular has had problems mainly because of management constraints, which are being addressed • On the other hand, 17,636 hectares are under informal irrigation.
• Irrigation development is recognized globally as very important in overcoming climate uncertainty with regard to agricultural production and productivity. • It is also important in increasing the utilization of the same piece of land several times in a year, thus increasing production and productivity. • Achieving competitive self sufficiency in rice is possible from productivity increases attained through cropping twice a year on our fields. • Irrigation development also ensures that there is good drainage of flood prone areas.
Planning investment for enhanced agricultural productivity
Warehousing Infrastructure and Management Available data (Table 9) below shows that up to 35% of maize and 34% of cassava produced is lost along their respective value chains (MOFA, 2009). • This is a major loss resulting from. • • • • •
Limited knowledge of post-harvest handling, poor harvesting methods, poor warehousing and storage systems, poor access to information on pest control methods and poor transportation methods and equipment.
• investment opportunities to reduce post-harvest losses include capacity building of producers in better harvesting, transportation and storage methods, introduction of grading methods and linkages between producers and markets. • Core extension staff should be trained in post-harvest technologies to provide a reservoir of specialized extension services in each region for training of producers and other actors (grain traders and distributors) along the value chain.
Warehouse Infrastructure Investment Opportunities
Opportunity to increases the economic value as well as the shelf life of food commodities. • Various interventions for value addition should be pursued including warehousing, agro-processing, packaging and distributing. • Investment in warehousing should be promoted to improve the quality of staples along the chain and to increase trade in legumes and cereals. • Warehousing can contribute to commodity price stabilization. • Existing warehouses should be upgraded by installing appropriate equipment and new ones established in strategic areas in the country. • MOFA and relevant agencies should put in place and enforce grading standards to be applied in all warehousing centres.
Warehousing for Perishables
Agro-processing • Agro-processing should be promoted through support to individual and group initiatives aimed at adding value to major food staples. • Priority should be given to maize (milling and packaging), rice (milling and packaging), cassava (gari, flour, etc), yam (flour), cowpea (grading and packaging) etc. • The support should target training in value addition and linkages with relevant service providers and markets. • Use of appropriate grades and standards should be emphasized to improve quality, improve market penetration and reduce postharvest losses. • Agro- processing, activities should be carried out in an environmentally safe and sustainable manner and with the right and infrastructure.
Opportunities to Close the Technology Gap
Medium Term Agric Investment Plan 2011-2015 (METASIP)
Policy Imperatives • Policy imperatives for enhancing the thrust of agricultural growth require that existing agriculture laws and regulations (mechanization; irrigation and warehousing) need to be reviewed to facilitate more private sector participation in the sector. • A number of laws and regulations have been identified and discussions are ongoing with relevant agencies on the commitment strategy • A participatory process, involving relevant stakeholders will be adopted for the review as well as the legislation drafting processes.
Thank You