The Agribusiness Sector and its Support Institutions
Agribusiness in Ghana is still rudimentary and artisanal with little growth or development over the last three decades. However, over the past decade, efforts have been made to develop the agribusiness sector. These efforts have entailed policies, projects and the establishment of institutions to promote agribusiness. It is difficult to analyse the performance of the agribusiness sector in Ghana due to the lack of comprehensive data on agribusiness enterprises and their activities in Ghana. A study on Ghana Agro-industries Development conducted in 2001, noted the inadequacy of comprehensive data on the classification of agro-industries (MASDAR, June 2001). The inability of the Registrar of Companies to classify agribusinesses into specific sub-sectors makes it difficult to ascertain the performance of specific sub-sectors. The last industrial survey was conducted in 1995 and covered only medium and large-scale industries.
Government’s intension for the development of agribusiness is expressed in the President’s declaration to make Ghana an Agro-industrial nation in the next ten years. This will require strong linkages between agriculture and industry. The Ghana Poverty Reduction Strategy medium term priorities include the modernization of agriculture through improved access to land; intensification of research and extension services; provision of irrigation facilities; credit to farmers; and support to private sector to add value to agricultural produce. The medium to long term strategies include access to farming inputs and irrigation-based farming technique; development of marketing channels for agricultural produce; encouraging the development of non-traditional exports; and accelerated growth of small and medium scale manufacturing industries through diffusion of appropriate technologies and vibrant training programmes.
In Ghana’s Accelerated Agricultural Development Strategy (MOFA, 2001) five elements are considered key to the development of agriculture and thus agribusiness: promotion of selected products through improved access to markets, development and improved access to technology, improved access to agricultural financial services, improved rural infrastructure and enhancement of human resource and institutional capacity. For implementation the Agricultural Services Sub-sector Investment Project is currently being implemented which aims at improving agricultural support services delivery for higher productivity.
Many institutions support the development of agribusiness in Ghana. They include public sector organizations such as departments and agencies of Ministries of Trade and Industry, Food and Agriculture, Manpower and Employment, Private Sector Development and Environment Science and Technology. Agribusiness development is also supported by Non governmental organizations including associations of producers, exporters, processing enterprises. Several multilateral and bilateral agencies such as the GTZ, CIDA, FAO and the AfDB also promote agribusiness activities in Ghana. The activities of these agencies are however, uncoordinated resulting in duplication of effort and limited impact. An agro-industrial study conducted in 1993, noted that inter-institutional operation and cooperation are exceptions rather than the rule (FAO, 1993).
Case Studies
Three sub-sectors were selected for study: fruit production-processing and export sub-sector (Farmapine Ghana Ltd and Blue Skies Ltd); cashew production and processing enterprises (Sampa Jimini Cooperative Cashew Processing Society); rice production and processing sub-sector (Afife Rice and Vegetable Irrigation Cooperative).
Sampa Jimini Cooperative Cashew Processing Society
Sampa Jimini Zongo Cooperative Cashew Processing Society, located in Brong-Ahafo was established in 1994 with the help of Technoserve, an American NGO. There are 18 workers, including 1 factory manager and 2 assistants. Membership of the Sampa Processing Society is 55. The society has elected its executives and operates on the guidelines of a cooperative. In 1994, two processing societies were formed. The Department of Cooperatives provided the requisite training on the operation and management of the societies. In 1995, Technoserve sponsored processing training in Nigeria and helped with the acquisition of equipment. Processing started in the year 2000. Four tonnes of raw nuts were processed into 1.14 tonnes of kernel. Between 2001 and 2002, 15 tonnes of raw nuts were purchased and processed. The kernels are sold to Golden Harvest Company Ltd Accra. In 2002, the buyer started experiencing problems with the marketing of the kernels which has affected prompt payment to the Society. As a result, the Society has looked for other marketing outlets such as the Indian Community in Tamale and other sales outlets in Accra.
Linking arrangements
Vertical and horizontal farm-agribusiness linkages were identified in the cashew case study. These linkages were however informal with no written contracts. Four types of linkages were functional at the time of the study: linkage between farmers and the processing society; linkage between society and Technoserve for business development services and technical advice; linkage between the processing society and Golden Harvest Company limited for final processing and linkage between Golden Harvest Limited and Technoserve for business development services, training and technical advice.
Farmers supply the processing society with raw nuts for processing. The processing society in turn educates the farmers on the best treatment and drying practices to get good nuts that attract a premium price. Technoserve encouraged the formation of the farmers association and the processing society, organised training on cooperative organization and introduced the society to financial institutions.
The linkage between processing society and the marketing company has also been facilitated by Technoserve to ensure ready market for the Society’s products. The linkage is strengthened by the fact that the Processing Society own 60 million shares of Golden Harvest which in return provides training and information on the international market developments. There were no contractual agreements.
Technoserve played a significant role in establishing the linkages observed in this case by introducing the concept of value addition by sponsoring training programs. The linkages with the marketing firms and the other government institutions such as the Department of Cooperatives were all initiated by Technoserve.
Constraints faced by key players
Sustained and effective linkages in farm businesses depend on the level of trust and understanding between the players involved particularly regarding their respective constraints. These constraints could be internal to business entity or external. Farmers’ constraints include: lack of financial resources to expand farms; limited access to market information; fluctuating price of raw nuts; reluctance of farmers to re-invest their income due to unfavourable macroeconomic conditions.
The processing company needs financial resources to expand capacity to enable it cope with the supplies; high interest rates charged by the banks; lack of storage facilities for both raw nuts and processed kernels. The marketing agents are constrained by a low demand for product, a slump in world market prices, as well as regularly occurring delays in payments by marketing company and retail agents.
Afife Rice and Vegetable Irrigation Cooperative Farmers and Marketing Society
Afife Rice Irrigation Project is located at Afife, in the Volta Region, about 140 km east of Accra. It was established by Ghana government and managed by Ghana Irrigation Development Authority (GIDA) of the Ministry of Food and Agriculture. The project began in 1982 purposely to produce valley bottom rice using irrigation water. About 880 ha of land are cultivated by 800 farmers organized into five co-operatives. The Co-operative formation was initiated by GIDA who invited the Department of Co-operatives to give the farmers the training on how to organise and operate a Co-operative. ARVICOFAMS was formed in 1996.
Linking arrangements
Five types of linkages were identified in the rice case study: Linkage between farmers and the Ministry of Food and Agriculture (MOFA) and Research institutions facilitated by GIDA; linkages between farmers and Agro -chemical input suppliers; Financial linkages with the Agricultural Development Bank; Linkages between farmers and packaging input Company (Gelina); Linkage with processor/marketing agent (House of Remma). MOFA through GIDA provides irrigation services and technical advice on crop husbandry practices, improved seeds and Integrated Pest Management (IPM). These technical services have contributed to yield increases from about 4mt/ha in 2000 to 5mt/ha in 2001. The Ministry also offers farmers with tractors and power tillers on concessionary terms.
To ensure prompt and bulk supply of inputs the co-operative executives together with GIDA have established linkages with input suppliers. The inputs, comprising fertilizers and herbicides are supplied on credit and the farmers pay after harvesting the produce. Farmers have so far dealt with Wienco, an agro-chemical company.The Agricultural Development Bank in some years procures fertilizers for the farmers on credit terms. Recovery rate of loans to farmers was about 75 percent. Unfortunately input supply through the bank has resulted in operational delays, which have affected farm operations for the 2002 cropping season.
In 2001 farmers’ marketing problems were addressed when the GIDA facilitated a linkage between the co-operatives and House of Remma, a rice processing and marketing company to buy Farmers’ paddy for processing and marketing. In this relationship, farmers who receive loans from ADB, deliver the equivalent of the loan in terms of paddy to House of Remma, whose operations are also financed by the same bank. Farmers after delivering their loan equivalent of paddy to House of Remma have the discretion to sell their extra paddy to the same company or find other outlets. The Price of paddy is agreed upon between the Co-operatives and the processing company at the beginning of the planting season.
Gelina is a packaging company that supplies sacks to the farmers on credit. This affords farmers the opportunity to obtain their packaging material in bulk thus cutting down cost and also provides Gelina a big market outlet. All the linkages established between the rice project and other enterprises were initiated and facilitated by GIDA. The Steering Committee of the Co-operative which is made up of two representatives of each cooperative together with the management of GIDA established the linkages.
Factors contributing to success
Factors identified to have contributed to the successful operation of the cooperative society include:
Constraints faced by key players
Farmers’ constraints include: difficulties in accessing tractor services; high tractor service charges; high cost of tractors, with a 4 fold price increase in 2 years; unaffordable deposit requirements on tractors; untimely release of loans to the farmers by ADB; inadequate drying floors; lack of access to funds for infrastructure.
High cost of spare-parts such as rollers and screens; lack of patios and de-stoners, competition from imported rice for large scale millers and inadequate skills and knowledge of processing machine operators are main constraints faced by processors.
Fruit Production, Processing and Export Sub-Sector - Farmapine, Ghana
Farmapine Ghana Ltd (FGL), located in Nsawam, Ghana’s main pineapple growing area, was formed in 1999 to cater for the technical, marketing and financial needs of the members of five pineapple growing cooperatives. Its services have extended to non-members of the cooperative who farm within their coverage area. The cooperatives own 80 percent of the shares of the company and the remaining 20 percent is owned by two former pineapple exporting. The company manages about 160 farmers and supports over 60 out-growers. Within the three years of operation, acreage under cultivation increased from 365 acres to 460 acres. It is projected to increase to 600 acres by end of 2002. In 2003 about 12,000tonnesof pineapples were exported to France, Germany, Netherlands, Italy, Poland and United Kingdom and the USA. FGL’s formation was facilitated by Technoserve and the company employs 81 permanent staff
Linking arrangements
Farmapine ensures that farmers adopt good agronomic practices to enhance yields and fruit quality. With the assistance of the Directorate of Agricultural Extension Services, Farmapine trains farmers on planting, fertilizer and chemical application, pest and disease control and overall management of the plant to ensure that quality fruits are produced. Field visits are conducted bi-weekly to ensure that farmers are adopting practices taught them. As a result of the training and visits, percentage of exportable fruits from farmers’ fields, has increased from 30 percent to 45 percent within two years, and is expected to reach 60 percent by 2003.
The company was established with an IDA loan facility of 1.5 million dollars to be repaid over a 7-year period including a grace period of three years. Under the loan agreement, the five farmer cooperatives organized by Technoserve, together own 80 percent of shares of the Company and 20 percent is owned by two limited liability companies whose assets were converted into shares in Farmapine.
Farmapine started with providing farmers with 100 percent of credit requirements for production. The practice of offering production loans ceased in 2002 when Farmapine started having problems with payment delays from their foreign clients. Cooperative members have ready market. Harvesting is timed and the Company’s vehicles go to the community to cart the fruits to the pack house for cleaning and packaging for export. Fruits that do not meet export market requirements, such as weight and colour are left with the farmers to sell in the domestic market. Pricing of produce is done through a consultative process. Farmers receive an average of 30 percent of FOB price of the kg of pineapple. There are no formal contractual agreements between farmers and the export company. Farmapine arranges for inputs such as fertilizer and other agrochemicals to be supplied to the farmers. The Farmers have acquired a container where they want to procure inputs with their own contributions for sale.
Key factors contributing to success
Constraints faced by key players
Constraints faced by farmers 'cooperative include: ceasing production loans, delays in paying farmers. Farmers are reluctant to obtain loans from formal institutions because of the fear of non-repayment since payment by Farmapine is unreliable; visual assessment of the weights of fruits by the Company; no respect of Board, farmer’s views often ignored.
Delay in payment to company by clients; no foreign representative to follow-up on deliveries, inability to ascertain reports by clients on quality of produce, not enough space on exporting ships, lack of storage facilities at the ports and delays in shipment affect quality of produce etc. are all mentioned as constraints of the processor.
Blue Skies Agro-Processing Company Ltd.
Blue Skies Agro-processing Company Ltd. is located about 25km from Accra It was established in 1998 by a privately funded British National. The company processes fresh fruits for supermarkets in some European markets. Fruits processed include pineapple, mangoes, watermelon, passion fruit and pawpaw. While most fruit is procured in Ghana, supply gaps are filled by imports from South Africa, Egypt, Kenya, Brazil and UK.
The company started with 38 workers and has since increased the workforce to 450, 60 percent of which are permanent staff. The processed products of the company are European Retailer Partnership Good Agricultural Practices (EUREGAP). Some requirements include: availability of appropriate toilets on farm premises; construction of appropriate farm houses; presence of good water supply e.g. bore hole, Polytank with water or pipe borne water; availability of first aid kits; fruit quality inspection system.
In the last four years the company has grown tremendously, expanding its processing facilities. Through good extension services and training to the farmers coupled with higher price offer, the Company rapidly increased its processing capacity from 1t/week to about 35tonnes/week. Blue Skies is known to pay its farmers promptly and also to offer a higher price per kg of pineapple than all the other Companies dealing with pineapple in the Nsawam area.
At present 18 have been EUREPGAP- certified. The company does not provide credit to farmers nor links them to any financial agents. However with prompt payment and higher price offer, farmers are encouraged to save and invest in their farms. Blue Skies operates with individual farmers and not cooperatives.
Linking arrangements
Farmers receive free of charge technical training and advice from the processing company to ensure that produce meets their quality standards. Committed and loyal farmers also can hire purchase inputs and equipment free of interest. Only farmers’ who are EUREPGAP certified are obliged to sell to the company because of the investment the company makes in getting farmers certified. There is ready market for Blue Skies’s products in the EU market. The company is committed to supplying products on time and in the right quantities to the supermarkets.
Key factors contributing to success
Constraints
Main problems faced by farmers are the rejection of fruits, if sugar level is below or above required range and a lack of loan facilities. Constraints faced by processing company include the lack of incentives such as tax exemptions; high domestic tax regime (e.g. 32 percent on profit); high inflation that erodes benefits of exchange rate gains from exports, frustration with the Ghanaian culture of not doing things according to schedule resulting in economic losses as well as problems with quality of fruits supplied by farmers.
Analysis of Constraints
In farm-agribusiness linkages, various types of constraints emerge some of which are internal to the partners involved and others are external. These constraints invariably weaken the strength of the business relationship. It also requires a mutual understanding of the constraints of the partners involved for the linkages to be effective.
Lack of Resources
Access to financial resources can contribute significantly to farm business profitability, development and linkages with other businesses. The lack of financial resources limits farmers’ ability to purchase inputs and adopt improved technology. This ultimately affects yields and produce quality that reduces profitability and opportunity for expansion and development. In cases where farmers enter into agreements with buyers or agro-processors, the lack of credit can undermine the success of these agreements as farmers will not be able to deliver the desired quantities and quality of produce.
In the Farmapine case for example, although as shareholders of the company they are obliged to sell their produce to it, the provision of credit to cover cost of production was an added incentive to adopt all agronomic practices as planned by the company’s agronomist. Farmers have expressed dissatisfaction with the company for ceasing to provide credit in addition to delayed payments for their produce. These according to the farmers, have limited their ability to procure inputs and expand their farms. One of the Cooperatives is planning to use the resources of the Cooperative to procure inputs for distribution to their members.
In the case of the Blue Skies, the processor does not provide credit except for their trusted farmers but the fact that they offer high prices and pay promptly is the motivating factor for the continued linkages between farmers and the company. The credit arrangements between the Rice Farmers at Afife and the input supplier and the Agricultural Development Bank has contributed significantly to the increased yields of farmers as they are able to adopt the right agronomic practices. In the cashew case study, lack of credit was found to constrain the ability of farmers to expand their farms. For the cashew processors, they lacked credit to expand their storage facilities, which could have enhanced their business operations and increased profits.
Lack of Production Skills and Information
Skills for production and management of farm and agribusiness enterprises are a pre-requisite to successful businesses. Farmers inability to meet expected yields, quality standards requirements and to diversify their business emanate from lack or absence of sufficient skills. Many farmers operate very small farms of often less than a hectare. They see their farm business as a way of life, something to occupy them because they have no alternative employment. This coupled with low incomes from their small farms which itself is a result of low yields and low farm prices do not encourage farmers to operate as commercial enterprises. As a result of their small nature of operations, there is also lack of information on prices and markets for farmers thus limiting their ability to explore better prices and better markets.
In the three cases studied, lack of production skills was a constraint to all the farmer groups. The training provided by the Companies and both governmental and non-governmental institutions contributed to strengthening the linkages between the farmers and agribusinesses. As a result of the training provided by Farmapine, proportion of farmers’ supply of pineapple that meets the export requirements increased from 30 percent to 45 percent within 3 years of operation. The Company expects to achieve 60 percent in the next two years. But with the absence of credit from the company this may not be realised as farmers may not be able to adopt all the agronomic practices and chemical application ensure yields and quality standards.
Training in farm level production and management skills is one way government can intervene to develop effective agribusinesses which can foster strong farm-agribusiness linkages by ensuring that yields improve and quality standards are met on a sustainable basis.
Absence of Demand for Produce and Products
This was identified as the key constraint that the linkages with the agribusinesses have been able to address. It has also been the key factor to maintaining the established link as farmers see those enterprises as the only sure way of marketing their produce. The lack of effective and sustained demand for farm produce or products was evident in the Farmapine, Cashew and the Rice cases. It was however not reported in the case of Blue Skies that seem to have an unmet foreign market demand. The demand for cashew has slowed down. This is reflected in the price slump in the world market and has been translated to the Ghanaian market.
Farmapine indicated they had problems with delayed payments from their clients as a result of which their assistance to their farmers in terms of credit has been curtailed. The delay in payment also lowers effective price of produce to farmers causing dissatisfaction which could undermine the linkage between farmers and the Company. In the case of rice, the problem of demand is contributed by consumers attitudes coupled with trade policies adopted by the government. The demand for local rice is low because there is commercial importation of cheaper rice from USA and aid rice from Japan. The low demand is also due to consumers’ negative attitude towards locally produced rice with complaints of high breakage and foreign matter content.
Weaknesses of Farmer Organizations
Strong and effective farmer organizations can contribute to strong farmer-agribusiness linkages. On the part of the farmer groups, it gives them better negotiating position, enables them to procure inputs in bulk, obtain technical services as a group which reduces cost of providing such services if compared to providing the services to individual farmers. On the other hand, the agro-processor benefits from strong groups by obtaining bulk supply of raw material. It is also advantageous in terms of cost if the agro-processor is to provide training.
The cooperatives in the case of the Farmapine do not appear to be very strong in as much as they are unable to negotiate with the company for better prices. They also are unable to get a higher number of representations on the Board of Farmapine. The cooperatives under the rice and cashew cases also showed the same attitude of poor negotiating skills and their in-ability to diversify or initiate business linkages with other partners. It was not appreciated when the rice Cooperatives were made to understand that if they were strong enough they could procure a mill and employ somebody to manage it.
Government Policy
The main policy concerns expressed were high tax system, high wages and trade policies. To promote agribusinesses, government need to provide more tax incentives to agro-industries as these businesses generate positive multipliers in terms of value addition, revenue to government and employment.
Factors Influencing the Strength of the Link
Nature of Product
The nature of product can influence the type of farm-agribusiness linkages that can be formed and the strength of such linkages. Especially with processing, product characteristics such as perish ability, storability and quality at the point of processing have implications for the type of farm-agribusiness linkages. Fruits and vegetable processors for example would establish linkages that involve adequate training of farmers to ensure that raw material supply meets desired specifications. Agro-processors who invest in farmers’ training try to maintain the linkage to avoid the problem of having to train different farmers all the time. Strong links tend to be created between farmers and fruit/vegetable processors due to the perishable nature of the produce. The linkage is usually mutually beneficial to both parties as it ensures ready market for the farmer and assured supply of raw material for the processor.
Training and Skill Development
Training and skill development are keys to successful businesses. Skills, especially of human resources are necessary for developing and sustaining strong linkages. Skill development is required for all players in the agribusiness chain - farmers and their organizations, managers of agribusiness and traders. It is particularly important for farmers to have the necessary training in order to appreciate the concerns of processors, traders and consumers and address them.
Farmers require training to enable them adopt good farm practices to increase their yields and also meet specification required by the market. They also require managerial skills to enable them manage their farm businesses better as an enterprise. Farmers’ organizations need to be trained on how to manage their organizations and run them profitability to the benefit of the members by inculcating in them managerial and negotiating skills
In all the cases studied, farmers received training. While some training was targeted at improving yields and meeting quality standards requirements, others were targeted at the development of the farmer organizations. This yielded benefits as it improved the quality of fruits as in the case of FGL and Blue Skies. Training of farmers in cooperative organization and their functioning also paid off in case of the Farmapine, the Arvico and the Cashew Cooperatives.
Skill development for managers of agribusinesses is lacking. There are however many institutions such as Empretec, Technoserve, NBSSI, the Association of Ghanaian Industries, the Association of Small Scale Industries and other private sector service providers and NGOs’ who provide training in entrepreneurship It is important for government to co-ordinate these services effectively and make them more accessible to many small businesses.
Importance of Farmer Organizations
Farmer organizations are important in promoting linkages between farmers and agribusinesses. In Ghana where majority of farmers are small-scale operators, it is both beneficial to the farmer and the agribusiness firm if farmers are organized into effective cooperatives. Effective farmers’ organizations increase the incomes of their members through services such as supplying agricultural inputs, credit financing, provision of transport and storage facilities and advisory and training services. Other benefits are reduced assembling cost, easier planning of production and delivery schedules.
Among the four cases studied, farmer organizations were important in establishing the linkages observed in three of the cases. These were Farmapine, Arvico and Cashew Processing Association. In the case of Blue Skies, there was no evidence of any formal farmer organization. In Farmapine, the farmer cooperatives were trained in how to improve in product quality and business planning. The Cooperatives have been slow in developing on their own although they have acquired the skills needed to run the cooperatives more efficiently. Benefits of farmer associations were also evident with Arvico Cooperatives. Through the government agency, farmers were able to establish linkages with input suppliers, banks, and a processing company. The cooperatives were transparent in their financial accounting and this created thrust between the executives of the cooperatives and their members and members were willing to contribute to the cooperative for its development.
In the cashew processing case, the existence of the farmer groups was important in creating the processing enterprise. Through the business training provided by Technoserve, farmers found it more profitable to establish a processing plant which could enable them add value to their produce to earn them higher income. The Cooperatives are also able to negotiate for better prices for their produce and market their produce in bulk.
It can be argued that even though farmers groups are not present in the Blue Skies, farmers are happy with their business relationship with the Company. This is possible so long as Blue Skies continuous to offer better prices for their produce. While the relationship between Blue Skies and EUREPGAP certified farmers may be strong due to the investment the latter makes in getting farmers certified and the financial assistance that is provided. The other farmers who currently supply Blue Skies are only linked by the existing higher price. Also while farmers who receive some assistance from Blue Skies are happy and do not see the need for an association, other farmers think if they were organized they will fair better.
Policy Environment and Incentives
Creating an enabling environment for farm and agribusinesses to strive and develop should be one of the key pre-occupations of government. This can be achieved to a large extent through policies and investment in public good system to promote these businesses. Several initiatives have been put in place to promote agribusiness such as the rural electrification policy, special loan facilities such us the Private Enterprise Fund. While many potential entrepreneurs were not aware of such facilities because of the poor publicity, some of the conditions for accessing the loan conditions also deterred access of potential borrowers.
To develop strong and effective farmer groups to promote farm level production and linkages to agribusinesses, a Farmer Based Development (FBO) programme has been designed within the context of a larger programme - The Agricultural Services Sub-sector Investment Programme. The FBO programme involves organization of farmers into groups, training of these organization and financial support to enable them develop and operate as viable organizations that are self-supporting and meeting the needs of their members and the business partners that would be established. The programme also includes the development of institutions such as a cooperative college to provide training in Cooperative development. The programme began in 2002, and is implemented by the Department of cooperatives in collaboration with the department of Agricultural Extension Services of the Ministry of Food and Agriculture.
Institutional Support
Institutions can play an effective role in promoting farm-agribusiness linkages. Government, non-governmental organizations and international agencies can all contribute to the development of effective farm-agribusiness linkages. The support provided by government in the farm-agribusiness linkages studies were through the Department of Co-operatives and the Department of Agricultural Extension Services. But these departments provided the services as part of the regular services and not as a special promotion for farm-business linkages. Although one of government’s policy objectives is to promote agro-industrial development, there are no specific action plans to do this.
An important role that government could play in strengthening farm-agribusiness linkages is strengthening the institutional and legal framework for private sector agreements. This is currently weak in the Ghana’s business environment and need to be addressed to promote healthy and stronger relationships between farmers and agri-businesses.
Recommendations
Based on the findings of the study and the above conclusions, the following recommendations are made:
· To promote more linkages between farmers and agribusinesses, government should initiate promotional linkage strategies and programmes through a network of public/private sector and non-governmental organizations. The services provided by this network should be publicized to create the awareness among farmers and agribusinesses on what type of assistance they can obtain.
· To increase access to finance for farm level production or the establishment of agribusinesses, special schemes need to be created such as the Small and Micro Enterprise Promotion schemes with reasonable interest rates and repayment periods. Disbursement of such loans however should go with requisite training to ensure proper use of the loan.
· To ensure coordinated and well focused training for farmers and agribusiness entrepreneurs, government need to play a key role by identifying and strengthening key institutions that can provide the requisite training for farmers and agribusinesses. For example the Department of Extension Services should be strengthened to provide quality services to the farmers. Government can support the establishment of farmers’ business schools to promote business-oriented farmers.
· The legal and regulatory environment needs to be improved by government to enhance investment in agribusiness and strengthen linkages between partners. A legal system that does not encourage enforcement of legal agreements results in losses that could be avoided to the mutual benefit of both contractual parties.
· Public, donors or non-governmental agency support for agribusiness should be holistic and integrated. For example, problems with market demand for a product arising from a promotional linkage by a donor or NGO should be adequately addressed or else it undermines the success of the linkage as is seen in the cashew case.
