Documents sighted by this paper regarding agriculture financing gives cause for concern. The paper offers a disquieting proposition that suggests that the Millennium Development Authority (MiDA) and the Agriculture Development Bank (ADB) are virtually fleecing on government’s green revolution to the deterrent of farmers.
The ADB and the MiDA, which is under US government’s Millennium Challenge Account has placed stumbling blocks on the way of farmers who are eligible to access loans from the two institutions.
Managers of the ADB, the managers of the agric component of the MCA facility, have previously asked peasant farmers to submit collateral in order to secure loans they have applied for.
The farmers, who came to the offices of Today complained that they have lost hope because government has failed in its promise to make finance available to enable them till the land and feed the teeming hungry mouths and also bring foreign exchange through export of non-traditional cash crops such as mongo and pineapple.
A document addressed to farmers in the Hohoe district by ADB officials has pegged the interest rate at an approximate figure of 30% per annum. The interest rate, according to the farmers, was “deterring and frightening”.
They noted that the bank and MiDA are not interested in borrowing to farmers which explains the reason for the astronomic increase in the interest rate beyond the reach of the ever suffering farmers.
They intimated that the whole MiDA agric finance component is phony hence the hype and propaganda.
The farmers wonder the rationale behind the ever increasing billboards and newspaper adverts about MiDA, yet they are doing little to “assist” farmers. An observation made by the paper indicates that the price of MiDA billboards cost two times the quantum of amount being applied for by a peasant former.
Investigations conducted by the paper also indicate that farmers all over the country are having problem with MiDA and its funds manager-ADB.
To worsen the plight of the farmers is the draconian conditionalities demanded by ADB. A farmer noted in his frustration that: “…ADB and MiDA are behaving like World Bank and IMF whose loan conditionalities have destroyed the economy of African countries”.
Majority of farmers-victimized by MiDA and its collaborators-ADB, are spread across the Greater Accra and Volta Region. They claimed that the only benefit they have obtained since the inception of MiDA is countless number of workshops some of which are “totally useless”.
A source within the affected farmers alleged that the frequency of workshops only inure to the consultants who line their pockets with fat fees charged against the agric component of the facility.
Another deterring factor to the farmers to access the loans which according to them has confirmed their suspicion that after all, the MiDA agric component is charade was the conditional demand of 25% of the loan facility (if it is granted) to be “deposited into blocked account” controlled by ADB.
The farmers alleged that no reasonable explanation was given to them to that effect even though they persistently request to know the rationale behind the blocked account.
The irony of the harsh conditionalities were that the bank will charge interest on the “…Blocked account” which shall be borne by the farmer though the bank is the sole beneficiary of the ‘confiscated’ “blocked account”.
This kind of arrangement, according to a financial consultant (name withheld), is an attribute of a “shylock”.
As if the above conditionalities are not enough the bank is also demanding a cost of 2% on the loan. A simple arithmetic projection shows that the bank would end up in scraping about thirty per cent (30%) of the loan being applied for.
The Greater Accra Mango Farmers and their Eastern Regional counterparts wonder why the MiDA and local banks have decided to charge different interest rates for the same facility.
A check conducted by Today validates the concerns of the farmers. The banks are charging varying degrees of exorbitant interest rates.
The Afadjato Valley Co-operative Mango Farmers and Marketing Society Limited have registered similar worrying development when it attempted to raise a loan facility for its members who are internationally recognized for the quality fruits they have been producing over the years.
They have expressed apprehension about the high interest rate on agriculture credit in Ghana.
The farmers said they doubt how the government can achieved its touted “youth-in-agriculture” programme with the huge interest rates being slapped on farmers for a “small credit facility”.
The Afadjato group said all the efforts they have made to plead for humane credit conditionality fell on deaf ears as ADB and MiDA have taken an uncooperative posture.
In one of the numerous meeting with the farmers, the paper lent that officers from ADB told the farmers to “go to the press” if they are dissatisfied with the terms and conditions for the loan.
The bank officers indicated that they (ADB) are not forcing them to take the loan and if it is not good for them they can forgo it, a farmer alleged.
The farmers indicated that bank officials are often impervious to suggestions they made. “…you see they look down upon us because we are farmers, but they forget that we are feeding them before they wear their beautiful cloths to go and sit in air-conditioned offices”, said an angry farmer.
The farmers express their fear of possible collapse of agriculture if the trend of high lending rate and harsh conditionalities is unchecked. They observed that there is no way a farmer could borrow at near 30% interest rate and pay back because agriculture is fraught with uncertainties.
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