Africa’s Changing Food System & Agribusiness

Interviewee: Maxwell Ampong – CEO – Maxwell Investments Group and Business Advisor to Ghana’s General Agricultural Workers’ Union (GAWU) of Trade Union Congress (TUC)

Interviewer: Atlanta Mahanta, Sr. Multimedia Journalist, The Times of Africa

Q. How has the pandemic affected Ghana’s agriculture sector?

A. The pandemic has definitely been a minus for the agricultural sector. Farmers, agribusiness, and the agricultural sector as a whole have all suffered losses. When you look at the policies and the restrictions that were put in place; social distancing, export holdups, the lockups, and lockdowns, these disruptions affected the output and the flow of operations. 

Looking at a sector that is largely informal, these disruptions affect the daily lives and income of stakeholders who largely live day today. So, if you have workers who do not have a large bank account with some savings that they can live on, as is common among residents of rural areas, things become more difficult.

In a pandemic, this difficulty applies to almost everybody, not just the rural sector. Even formal sector players are holding back investments because of uncertainties associated with the novel coronavirus. These uncertainties continue to create a lot of chaos and confusion that reduces economic activities. 

Yes, COVID protocols are necessary. These lockdowns have been used to help flatten the Covid-19 epidemiological curve. It was our way of contributing our quota to reducing the virus’s impact.

Nonetheless, it has caused disruptions in the web of interconnected relationships that keep the sector moving. We are looking at a sector that is largely based on a relationship that I try to define as ‘we are each other’s employers’. 

It’s more like the aggregator is working for a big company. The big company is working for the farmer (at least that’s how it should be). However, it becomes difficult when one sector is affected more than the others. For instance, a lockdown will typically affect a farm aggregator more than it will affect a big corporation and, when that happens, that ‘we work for each other’ relationship becomes more evident because, without the aggregator (who is usually the link between the farmer and business), there’s a missing link.

As a result, the lockdowns were critical. However, it did have an effect on that relationship, and that affected relationship created a kind of trickling effect that, it is safe to say, demonstrated the virus’s trickling impact.

For instance, if the farmer is not getting enough income because of reduced production, it would reduce his revenue. Of course, when the farmer has less revenue, it makes it difficult for the farmer to make payments. 

What kind of payments are we talking about? We’re talking about salaries, debt, and taxes, all of which are very important. Agriculture is very important to the nation, and what happens in agriculture has a large impact on Ghana’s GDP.

There was a report last year that said, during the early stages of the pandemic, Ghana’s GDP shrunk by about 20%. What scares me about the effects of this virus is that it’s being spoken about as if it’s coming in waves. If it’s coming in waves of sorts, that introduces more uncertainties. That means there will be even more disruptions, and when they occur, they will affect the small guys first, then the big guys.

When it comes to the agricultural sector in Ghana, I can boldly tell you that most of the players [in numbers] are rural workers. They’re the real guys that make the magic happen. We’re talking about genuine farmers, aggregators, laborers, non-wage workers, and so on.

I could go on and on about this, but these are the issues that those of us in the sector are familiar with and deal with on a daily basis.And it affects almost everybody; it affects every household. 

There was also another report by the Ghana Statistical Service, I think, that stated that over 75% of Ghana’s households had experienced a decline in income because of the restrictions that happened in March last year.

We are not a developed country; we are a developing country. Yes, we are spoken of as the stars of Africa, but poverty is still a big problem in the rural sector. It’s a big problem in this country and when we face a situation like Covid-19, as farmers, it reduces production and reduces revenue.

Let me give a typical example of raw cashew nuts. 

Raw cashew nuts are a huge industry; they are mentioned in the same breath as cocoa. The price of raw cashew nuts fell last year from about 130 dollars to about 75 dollars. If you work the numbers very well, you’ll find the pandemic wiped out about an estimated 400 million to about a billion U.S dollars from producer revenues. 

All these monies could have done a lot; they didn’t come in. We are still feeling the effect of the pandemic and are hoping that guys like you will be able to throw some light on what is happening in a good way, so other players that can help with the problem will actually be able to come and do so.

Q. How Ghana is tackling transforming agriculture for economic growth, job creation, and food security?

A. Ghana loves her farmers. Look at, for instance, the nation’s relationship with cocoa. Ghana is very much in touch with the agricultural sector. One thing that I love about Ghana is how its Parliament conducted its activities during the pandemic. 

I never thought they could pass laws and resolutions this fast. They were passing resolutions here and there to make sure the right aid went to the right people, and the right laws were passed in order to facilitate the measures that they had put in place to curb Covid-19.

One thing that they did that I really liked was they decided to provide subsidized fertilizer, hybrid seeds, chemicals, and others to tens of thousands of small farmers; they needed it the most.

Look at what the Ghana Commodity Exchange (GCX) is doing under the leadership of Tucci Ivowi, who has done an excellent job.She introduced the Warehouse Receipt System, which is also fantastic, because, with this system, farmers have the ability to send their goods to GCX warehouses and get real value for what they have. 

Speaking of the government, they didn’t do it alone. Of course, they had to partner with private sector players as well. I think the best thing these guys did, aside from physical cash subsidies to subsidize workers’ wages and help government efforts, was information dissemination. 

There are many times that you go to some of these farming communities and you see a big van with loud stereo speakers on top of it just telling you continuously to ‘wear your mask’, ‘social distance’, ‘go by the World Health Organization Protocols’ in order to just curb the situation. That’s one thing I really liked about Ghana’s private sector; they really did show up.

There has been a greater awareness within the sector to pay more attention to investments aimed at reducing production shortfalls and anything else that threatens Ghana’s food security.

Q. How does the Labor productivity identity grow with the help of technology adoption?

A. Covid continues to be horrible, so it’s hard to say that something good came out of it. Still, the adoption of technology has been one thing that at least has been very evident so far. Everybody has started talking about “Agri-tech! Agri-tech! Agri-tech!” which is great. 

It’s not like it wasn’t there before. Irrigation has been propagated as a big tool to fight reductions in production for a very long time now. Technology is something that is being welcomed by the industry. 

Agricultural research is another way they are investing in the sector.CSIR is doing a lot. They are trying to bring in modernized seed varieties that can give you more yield, that is persistent in drought, persistent against pests, persistent against some diseases. 

As a result, technology adoption will undoubtedly increase. A better way to put that would be to say that more acceptance of technology into the sector is finding its way slowly to increasing the standing of farmers and laborers to get the best out of what they do.

When it comes to technology, and I was recently discussing this as early as this morning, one major tech infusion avenue for the major stakeholders in Ghana is roads. I think it’s appropriate to call it road construction.

COCOBOD, in particular, has done an excellent job of connecting its rural cocoa and coffee farmers to warehouses following the initial evacuation. These efforts may not appear to be technological infusions at first glance, but I always say that it’s one of the things that should be viewed through the lens of technology because produce like tomatoes perishes very quickly without proper, long-lasting roads and an efficient logistics network.

Increased mechanization in farming is also being accepted by everybody. It’s something that must continue to work because technology utilization is relatively limited right now compared to the extent of the dire needs in rural Ghana. 

In Ghana, technology is on the up in general. Look at Zipline and other bold technologies which have come to stay. Old technology is also being used now. Many pastors are now using Facebook to worship with their followers. I am quite happy when I see that everybody understands that technology is not evil and that technology is something that everybody should welcome.

Q. Please share your opinion on Africa’s Changing food system and agribusiness advantages?

A.Covid continues to be horrible, so it’s hard to say that something good came out of it. Still, the adoption of technology has been one thing that at least has been very evident so far. Everybody has started talking about “Agri-tech! Agri-tech! Agri-tech!” which is great. 

It’s not like it wasn’t there before. Irrigation has been propagated as a big tool to fight reductions in production for a very long time now. Technology is something that is being welcomed by the industry. 

Agricultural research is another way they are investing in the sector.CSIR is doing a lot. They are trying to bring in modernized seed varieties that can give you more yield, that is persistent in drought, persistent against pests, persistent against some diseases. 

As a result, technology adoption will undoubtedly increase. A better way to put that would be to say that more acceptance of technology into the sector is finding its way slowly to increasing the standing of farmers and laborers to get the best out of what they do.

When it comes to technology, and I was recently discussing this as early as this morning, one major tech infusion avenue for the major stakeholders in Ghana is roads. I think it’s appropriate to call it road construction.

COCOBOD, in particular, has done an excellent job of connecting its rural cocoa and coffee farmers to warehouses following the initial evacuation. These efforts may not appear to be technological infusions at first glance, but I always say that it’s one of the things that should be viewed through the lens of technology because produce like tomatoes perishes very quickly without proper, long-lasting roads and an efficient logistics network.

Increased mechanization in farming is also being accepted by everybody. It’s something that must continue to work because technology utilization is relatively limited right now compared to the extent of the dire needs in rural Ghana. 

In Ghana, technology is on the up in general. Look at Zipline and other bold technologies which have come to stay. Old technology is also being used now. Many pastors are now using Facebook to worship with their followers. I am quite happy when I see that everybody understands that technology is not evil and that technology is something that everybody should welcome.

Clearly, the disruptions caused by Covid-19 have exposed the vulnerability of the food systems across many African countries. Africa is more vulnerable in some ways compared to developed countries; we already know that. Let us set aside the fact that the continent is currently facing a looming food crisis, in addition to a health and economic crisis.

We look at the disruptions to the global supply chain. It kind of impeded Africa’s ability to import food. Because cargo planes transport a lot of food, you can imagine how this affects food importers.

While we talk about all these issues with the lack of imports of agricultural products, I am speaking of it as a problem. We should not forget that we have been trying to reduce our imports, grow our production and manufacture our products internally for a very long time. 

This is the opportunity that has been embedded in the COVID-19 problem. 

It’s important that I mention this because whenever I speak of reduced food imports, I always want to remind people that it is an opportunity for us to also grow locally.

Another point is local agricultural production, which, of course, has been disrupted. We just spoke about the technology infusion. Small-holding farmers make up most of the agricultural sector players in Africa currently. It’s very hard for these people to take up their food production activities when they are hit by COVID in all the ways that I have already explained.

However, some much-needed assistance has arrived.

Ghana recently got the Covid-19 vaccine from COVAX and the Global Alliance for Improved Nutrition (GAIN). I think when I first heard of this, I researched a little bit about GAIN, and one of their surveys last year May showed that across 17 developed countries, small enterprises were having most of the problems; they had difficulties accessing inputs, the lockdowns disrupted their labor, etc. These are things that are very practical for the business sector. Another practical example of how Covid has harmed smaller players in an industry is when one worker at a fish processing factory contaminated 533 other workers, which is a huge number! So, local production has already, of course, been affected.

Then you look at the last part of it, which is the actual movement within the supply chain. I can give many examples. Ghana was under lockdown, but products and trucks were able to cross the border. Rwanda last year largely controlled the Covid-19 situation until one trucker from Tanzania tracked Covid-19 into the system. So, logistics, which is a huge part of the agricultural supply chain, as I have already stated, is also already being looked at. 

These are issues that should constantly be worked on and, hopefully, we will never have one form of solution and say “we are okay with this solution”. Rather, I hope it will be a situation where we continuously look at bettering the solutions over and over again. 

Covid has done this thing where it has exposed 

1. the importance of agriculture 

2. our vulnerability to food security. 

3. how vital and fundamental agriculture is to every single person. 

Now, food security is high on everybody’s list. Africa has suddenly been thrust into the forefront and initiatives like the African Continental Free Trade Area (AfCFTA) are getting increased global recognition. There is a real opportunity for real value if you cast your mind to Africa and look at all these arable lands, all these factories, all these opportunities imbued here in Africa.

Q. Please share the upcoming plans and projects of the General Agricultural Workers Union. And what you want to convey to the people of Ghana and Africa.

A.The General Agricultural Workers’ Union (GAWU) of Ghana is a platform that I am very elated and humbled by my appointment as their Official Business Advisor, and mainly by the work that I do with them.

Being the largest Agricultural Trade Union in Ghana under the Trade Union Congress (TUC), we have over 50,000 waged and unwaged workers. When you tell a white man or when you tell an industry player “I work with GAWU, I have 50,000 farmers”, they feel like I have those farmers in my backyard and I can always call them at any time and do projects with them seamlessly. True, but there are issues with bringing in value that exists outside of these ‘networks’ and with what these farmers actually have.

Number one is communication. If I meet a finance guy right now, how do I communicate the value that these farmers have to him? I can not communicate it by way of saying “he’s the greatest person in the neighborhood and he has this and that”. We have to use words like ‘Return on Investment’, ‘Risk Mitigation Measures’, and jargon that he understands. 

I’m building up to my point, which is that this year, that is the main project that I want to undertake with these farmers: a way to convey the enormous value that these farmers have in a way that investors and industry players can understand, without misrepresenting my farmers.

So if you have, let’s say, a funder that has money to invest and would like to invest in farmers, (and these are mostly rural farmers who do not understand what a balance sheet is), how do you get them to the point where, with little effort, those with help can easily understand why farmers do what they do and how they can engage safely? 

I have already stated that the government has increased efforts to bring aid to these farmers by making seeds and other inputs available to Ghana’s farmers in record time, which was very exceptional. Now, after the government does its part, there are other private players who want to do their part as well. 

If it’s not Corporate Social Responsibility (CSR) if it’s not charity, then how do you make a successful case of the farmer’s life to investors without misrepresenting facts and in a way that makes enough sense for them to invest one dollar in them, as opposed to, say, in treasury bills? See, that is the one project that I’m working on with GAWU. 

I can give you the gist of how we’re going about it. 

We work with rural farmers, so we told them “We need you to use this application which we are working on with a firm in Miami”. The app lets them input their figures on how much they spend a day, how much they spend on inputs, how much they spend on fertilizer, how much they spend on the water, and other expenditures. It’s for them to understand at the end of a period that “this is how much profit I’ve made, and at what cost”. Financial illiteracy is a big problem in the rural agricultural sector.

So we made this easily accessible online, but then we came to the next difficulty: it is now available and accessible, but how do you make sure it literally gets to these farmers? Remember, these guys are mostly on the farm or in fields with their phones. But, these phones are old or very old phone models that don’t have the technology currently infused into them to even download apps. Let’s remind ourselves that we’re talking about INDIGENOUS FARMERS.

We thought we had found a solution: “Okay, so we find you guys a central point, make sure that all the computers there are functional, internet access so that you farmers come and upload your data. We did that. The response was “we are mostly on our farms and we come home late, so we can not go to the warehouse or computer location to input the information, but we will try”. 

These are issues we wouldn’t have envisioned if we didn’t start the process.

We’re currently trying to find representatives from farmer clusters, people they trust, who will go to the farmers and collect information from them, then upload it to the app or online in order to have very well-defined figures or real-time information about their P & L and operations.

We are constantly addressing all of these concerns.

Once I am able, through the app, to convey the lives of these farmers to some helpers we have on standby, once we identify how they can come into play in this part or that part in a safe way, that’s when the magic happens. There will always be problems when dealing with farmers, but there will also always be those willing to help solve the problems. A lot of people are ready to get involved, but the problem is that they speak different languages (so to speak) from the farmers.

What I want to tell the world right now is that Covid is real and horrible and we are all hoping for the best. But, it has ushered in a new age of opportunity, an age where agriculture has moved much further to the forefront of the global conversation. So there’s an opportunity for everybody there. 

In Ghana, pastors who previously demonized Facebook and social media are now (I still laugh a little every Sunday when I see this) conducting church services on the internet, encouraging church members to follow their pages. It’s phenomenal! 

Everybody is now accepting these new innovations.

There’s no time, I think, in Ghana’s history that technology has been this embraced and with the ushering in of new dawn like this comes very varied opportunities for so many people. 

Find what you can do, do what little you can to contribute to these new innovations that are coming up, and that is the way that you can find some pearls in all this chaos.

So let’s hope because there is hope and a lot of possibilities in Africa.

Source: TOA magazine