83 AGRIC WORKERS ATTEND WORKSHOP (PAGE 20)

THE Securities and Exchange Commission has organised a day’s workshop for 83 stakeholders in the agricultural sector in the Western Region to deliberate on the best approach and model which will lead to the establishment of a commodities exchange and warehouse receipt system in the country.
The workshop was on the theme: “Improving Commodity Trade and Finance in Ghana Through the Establishment of a Viable Commodities Exchange and Warehouse Receipt System”.
The workshop was also to seek input into the design of an effective and efficient commodities exchange and warehouse system to help improve agricultural marketing, trade and finance as well as reducing post-harvest losses.
After the workshop, the commission will begin the process to put in place an appropriate legal and regulatory framework that would fit the model to be decided on by the participants.
In an address read on his behalf to open the workshop in Takoradi, the Director General of the Securities and Exchange Commission, Dr Nii Kwaku Sowa, said the commission, the statutory regulator of the capital market in Ghana, was of the view that every capital market must be designed to meet the needs of the national economy and provide investment opportunities for investors.
He said apart from industry, one area of great potential that had been of concern to the commission had been agriculture.
Dr Sowa added that Ghana had great potential and competencies in agriculture yet it had over the years failed to exploit them.
“It has been found that the main reason why our great farmers remain poor with poor returns for their efforts is because the agricultural sector is fraught with several market imperfections and impediments which together, pose numerous risks for any meaningful investment to be made in the agricultural sector,” he stated.
Those risks, Dr Sowa said, were perceived to be so high that almost all financial institutions, including banks and insurance companies, were reluctant to provide credit or risk cover to participants in the sector.
“Over the years, investment and credit to the sector keep falling. It is a known fact that even land is not acceptable for collateral lending to the agricultural sector in Ghana,” he stated.
Dr Sowa said instead of becoming a net exporter of agricultural produce, including food crops, the country was gradually becoming a net importer.
That, he said, was seriously affecting the fiscal balance and the overall macro-economic stability of the country.
“The country’s performance in the cocoa industry indicates that with proper organisation and some interventions by way of a commodities exchange, we can improve the efficiencies and effectiveness of the performance of the entire value chain in the agricultural sector,” he said.
“Today, Malaysia has a commodities exchange dedicated only to one cash crop—crude palm oil, and has been able to transform the palm oil industry such that world market prices for palm oil is quoted from Malaysia”, Dr Sowa added.
He said that also meant that Malaysia had become a price giver and not a price taker for palm oil sales on the world market.
Dr Sowa stated that “Commodities exchange provides for market transparency, efficient price discovery and also helps farmers to gain easy access to credit, ready markets and provide a potent tool for managing price fluctuations”.
He said in the end, producers, consumers, processors and market intermediaries gained from the operations of the commodities exchange.