PROJECT FOR STAPLE FOOD (MAIZE) SECTOR IN GHANA Presented by Selorm Ayeduvor

1. COMPETITION REFORMS IN KEY MARKETS FOR ENHANCING SOCIAL AND ECONOMIC WELFARE IN DEVELOPING COUNTRIES PROJECT FOR STAPLE FOOD (MAIZE) SECTOR IN GHANA Presented by SelormAyeduvor

2. OUTLINE OF PRESENTATION • Introduction • Motivation of the Study • Objectives of the Study • Methodology of Primary Research • Analysis of Secondary Data • Results and Discussions • Conclusions and Recommendations

3. INTRODUCTION • The project is being implemented by CUTS with support from DFID (UK) and BMZ (Germany), facilitated by GIZ (Germany). Two sectors have been identified for study and exploration under the CREW project in the staple food sector and the transport sector.

4. MOTIVATION FOR THE PROJECT • The purpose of the project is to assess the state of competition in the selected sectors and countries. • Especially focusing on the impact that past and existing public policies, regulations, private sector business practices, institutional arrangements and other factors have had on consumer and producer welfare.

5. MOTIVATION CONT’D • Specifically, the goal of the project is to better demonstrate measurable benefits from effective competition reforms in Developing Countries (DCs), for ensuring long-term support for competition. • Further, the project would be implemented guided by the following objectives:

6. OBJECTIVES • To enhance international understanding of the benefits from, and best practices in, effectively implementing competition regimes in developing countries. • To develop and test a methodology (with indicators) for assessing the efficacy of competition - regimes in achieving impacts on developing country consumers and producers.

7. OBJECTIVE CONT’D • To advocate to national stakeholders and international development partners for according greater importance to competition policy and law issues, in the national development agenda. • To sustain the momentum on fast-tracking competition reforms, gained from stakeholder awareness, understanding about the benefits and participation in related process in developing countries.

8. METHODOLOGY OF PRIMARY RESEARCH Study Area: Three Regions were selected Accra, BrongAhafo and Ashanti for the study. The locations are selected based on the levels of production and consumption of maize. Sample Size and Sampling technique: A total of 140 maize farmers (70 from Techiman and 70 from Ejura) in BrongAhafo and Ashanti Region respectively and a total of 90 consumers were randomly selected and interviewed from the three regions. The regions were however purposively selected for the study. Method of analysis:Descriptive statistics such as means and percentages, line graphs, bar charts were used to analyze the response of farmers. The logit models were used to study awareness of farmers about government policies, regulations and programmes.

9. PRODUCTION OF MAIZE Distribution of Maize Production by Region (2000-2012)

10. MAIZE PRODUCTION CONT’D • Maize area, Production and Yield trends in Ghana (1990-2012)

11. MAIZE PRICES Descriptive statistics of Regional nominal wholesale maize prices (2002-2008)

12. MAIZE PRICES Descriptive statistics of Regional nominal wholesale maize prices (2009-2012)

13. MAIZE PRICE CONT’D National average wholesale maize price (2002-2012)

14. PROCUREMENT OF MAIZE • NAFCO’s mandate consist of guaranteeing an assured income to farmers by providing a minimum guaranteed price and ready market for farmers in order to reduce post-harvest losses • Purchasing, selling, preserving and distributing food stuffs in times of crisis • employing a buffer stock mechanism to ensure stability/balance in demand and supply • expanding the market share/demand for food grown in Ghana by selling to state institutions such as the military, schools, hospitals, prisons.

15. PROCUREMENT CONT’D • acting as a foreign exchange earner as increased food production resulting from MOFA’s interventions • and storage by NAFCO will afford the country the opportunity to export surplus food items when the local food requirement has been met. • The target quantities for 2012 for maize were 15,000 Mt of white maize and 15,000 Mt of yellow maize; 15,000 Mt of paddy rice; 1,000 Mt of soya. • The Emergency Government Stocks include: 10,000 Mt of white maize; 10,000 Mt of milled rice; 1,000 Mt of soya. • The share of these stocks in an estimated production of 1.7 Million Mt is around 3 percent.

16. MARKETING AND DISTRIBUTION Maize Consumption and Utilization • Food balance sheet for maize in Ghana (2006-2012)

17. Availability and Access to Food Outlets

18. Fertilizer Import and Consumption in Ghana Fertilizer Imports in Ghana (2000-2012)

19. Fertilizer Subsidy Budget, Volume, and Cost

20. ANALYSIS OF PRIMARY DATA

21. PRIMARY DATA ANALYSIS Policies, programmes and regulations identified are: 1.Fertilizer subsidy programme 2.Seed inspection and certification 3.National seed policy 4.National food buffer stock company(NAFCO)

22. MAIZE PRODUCTION Land holding and land under cultivation • The average land under cultivation of the respondents in the study area was about 2.14 ha; however this ranges between 0.4 ha to 12 ha in the area. • The total land holding of the 140 farmers was 547.7ha while the total land under cultivation was 297.1ha which means the proportion of farmers land holding under cultivation of maize is about 54.24%.

23. Quantity and trend of maize production • The production of maize increased from 358.5Mt in 2009 to 825.69Mt in 2013 this represent a growth rate of about 24.8% per annum in the two Regions

24. Production level of maize (2009-2013)

25. FERTILIZER Availability of fertilizer

26. FERTILIZER CONT’D AVERAGE USAGE OF FERTILIZER • NPK- 133.8 Kg/ha • SOA- 105 Kg/ha AFFORDABILITY

27. FERTILIZER CONT’D Trend of fertilizer prices from 2009 to 2013

28. FERTILIZER CONT’D Quality of fertilizer

29. FERTILIZER CONT’D Factors affecting awareness of fertilizer policy

30. SEED MAIZE

31. SEED MAIZE CONT’D Factors affecting awareness of seed policy

32. CREDIT Availability

33. CREDIT CONT’D Affordability of credit • With respect to affordability, about 41.29% ranked the credit available as very expensive, 13.6% said it was expensive, 14.3% ranked affordable, 19.3% ranked cheap while the remaining 11.5% ranked very cheap. • The total credit that the respondent received was GH₵ 4,080.00 in 2009 to about GH₵10,480.00in 2013 however this amount dropped to GH₵7,080.00 in 2014. • The interest charged according to the farmers ranged from 4% to 12% per month depending on the source of credit.

34. PROCUREMENT CONT’D • Existence of Government Support Price

35. PROCUREMENT CONT’D • Sales information, Sales pattern and payment terms • Average selling price of maize in 2014 is about GH₵ 100/120 Kg however prices of maize range between GH₵ 55/120 Kg to about GH₵ 130/120 Kg.

36. PROCUREMENT

37. MARKETING & DISTRIBUTION Monthly Consumption Monthly Expenditure

38. MARKETING & DISTRIBUTION CONT’D • The preferred staple by consumers

39. MARKETING & DISTRIBUTION CONT’D

40. CONCLUSION Based on the major findings from the study, the following conclusions are drawn PRODUCTION Maize production has increased from 2009 to 2013 While Cost of inputs used in production have also increased over time. Private entities are the major source of fertilizer to the farmers. NPK is the main fertilizer used the farmers • Though there are efforts to subsidise fertilizer for farmers, it prices have increased • consistently over time • Fertilizer is mostly not available to farmers though the quality has improved • The statistically significant factors that affects the farmers awareness of fertilizer policies are: Region, fertilizer usage, income and source of fertilizer • Seed prices have also increased over the period .Though there are efforts to improve availability and affordability of seeds, farmers still rely on their own seeds. There have been any significant improvement in the quality and availability of seeds. The statistically significant factors that affect awareness of seed policy are:Level of education, region, income and seed usage

41. CONCLUSION CONT’D • Majority of the farmers are credit constrained • Interest rate and credit delivery have been fluctuating over time. PROCUREMENT • Majority of the farmers are not aware of the price setting mechanism by NAFCO. Most of the farmers sell produce to middle and market queens

42. CONCLUSION CONT’D MARKETING AND DISTRIBUTION Though there have been some improvement in the availability of maize, the quality has not improve whiles the price continue to rise. Most consumers also buy their maize from open markets

43. RECOMMENDATIONS • It is therefore recommended that Ghana Government should facilitate distribution of subsidized fertilizer and credit facilities at lower interest rates to farmers. This will help reduce the cost of production of maize. • The communication of government policies, programmes and regulations be enhance by various agencies responsible. This will enhance farmer awareness , improve their participation and benefits derived from them. • It also recommended that government establish retail shops in the country in order to reduce price of maize through competition. • NAFCO should intensify their activities to ensure that prices of maize are stabilized and also reduce postharvest losses.