By Samuel OKANG-BOYE
Sustainable agriculture essentially revolves around meeting the current urgent requirements for food and nutrition while also guaranteeing that coming generations will be able to fulfill their own needs.
In Ghana, where the population is expected to increase from 33 million to more than 50 million within the next twenty years, immediate action is crucial. All parties involved need to go beyond mere talk and implement strong, definitive measures to ensure the country’s food security—without compromising the well-being of our soil, water resources, and biodiversity.
At its heart, sustainability means using resources – whether fertile fields or flowing rivers – in ways that leave them better than we found them, or at the very least, intact.
In farming, this involves techniques that rejuvenate soil quality, preserve water resources, and reduce ecological impact.
Sustainable agriculture is therefore not merely an environmental aspiration; it is an economic and social imperative, deeply entwined with the future prosperity and resilience of our nation.
Why Financial Institutions Must Champion Sustainable Food Systems
The significance of financial institutions in Ghana’s agricultural transformation is immense. Banks and financial services play a vital role in facilitating business growth, innovation, and sustainability.
In the realm of agriculture, specifically concerning food production, this role holds considerable importance as food satisfies one of humanity’s basic needs. Should Ghana fail to address its escalating requirements for nourishment sustainably, the consequences could extend beyond mere economic challenges to jeopardize national security and public well-being.
Thus, financial institutions have a duty beyond profit-making. And at Stanbic Bank, we believe in touching lives and leaving society better than we found it.
Investing in sustainable agriculture is not only commercially viable but a meaningful contribution to ensuring food security for generations to come.
Global bodies such as the Food and Agriculture Organization (FAO) predict that food production needs to grow by at least 70% over the next decade to meet global needs. Locally, with our rapidly expanding population, we must intensify agricultural production – but in ways that do not deplete our finite natural resources.
By allocating funds to sustainable food projects, banks are strongly positioning themselves in the wider discussion about national and international sustainability efforts. This approach helps them meet environmental, social, and governance (ESG) standards while also fortifying the longevity of their investment portfolios.
Reducing Risks in Agriculture to Unleash Investments
A major hurdle in agricultural finance continues to be the perceived elevated risk associated with this industry. Historically, farming has been viewed as a gamble, heavily influenced by unpredictable climatic conditions.
Over the past few years, extended periods of drought have severely impacted crop yields, particularly affecting essential food sources such as corn, rice, and soybeans. To tackle this issue, financial organizations should lead efforts towards investing in more dependable infrastructure, including irrigation projects.
Currently, Ghana cultivates only approximately 1.7% of its arable land through irrigation, lagging considerably behind neighboring countries. Expanding irrigation efforts—even via basic measures such as installing boreholes—could bring about significant improvements.
Nevertheless, establishing sustainable irrigation necessitates patient funding along with privately led initiatives to guarantee ownership, upkeep, and enduring feasibility.
In addition to improving irrigation, reducing risks should also include establishing strong crop and livestock insurance programs along with creative financial tools such as inventory financing. This would enable farmers to use their stored produce as collateral for loans.
These advancements allow us to transform agriculture from a highly risky endeavor into a more stable and attractive investment opportunity, thereby facilitating increased financial support.
Creating Resilient Food Networks via Fiscal Creativity
At Stanbic Bank Ghana, we recognize that traditional financial solutions do not fit the nuanced needs of the agriculture sector.
This is precisely why we’ve developed specialized knowledge within the bank by bringing aboard agricultural experts who comprehend the intricacies and rhythms of agribusiness.
We take an approach that extends further than just providing standard offerings; rather, we deliver customized financial solutions designed specifically to address the actual conditions at hand.
Our Africa-China banking initiative links agribusinesses with Chinese partners and suppliers, enabling them to obtain crucial tools like farming machines and processing gear.
We have established collaborations with various development finance organizations such as the World Bank, IFC, AfDB, and the Mastercard Foundation. These alliances allow us to provide concessional financing and mitigate risks within the agricultural industry.
Furthermore, acknowledging the move toward digitization, Stanbic Bank has made significant investments in digital infrastructure. This enables farmers and agribusinesses to easily obtain financial services at their convenience, eliminating the need to spend valuable working hours in bank branches.
These initiatives indicate a thoughtful and all-encompassing approach aimed at bolstering and expanding Ghana’s sustainable food networks.
Policy, Education, and Enhanced Farmer Empowerment
Establishing sustainable food systems won’t occur immediately. Several gaps need to be tackled.
Financial organizations need to enhance their comprehension of agriculture, necessitating a reassessment of our approach to educating and nurturing talent within agricultural finance.
To bridge the knowledge gap that hinders innovation in agricultural financing, more targeted education and skill enhancement programs are necessary.
On the policy front, we must invest in the development of sector-specific financial products. Robust crop insurance, structured trade finance for inventory, and more tailored credit schemes for agribusinesses are not luxuries but necessities. Farmers themselves must also be empowered with the tools for adaptation and mitigation.
They require access to enhanced seed types that have quicker maturation periods and can endure harsh climatic conditions, along with information on regenerative techniques such as cover cropping, mixed cropping, and decreased reliance on chemicals.
By adopting these advancements, farmers can enhance their output as well as safeguard the environments they rely upon.
Advancing sustainable food systems in Ghana is a collective duty. Financial institutions hold a key position beyond being mere financiers; they must act as genuine collaborators in establishing a robust, equitable, and environmentally friendly agricultural sector.
In this way, we are not just securing our business’s prosperity but also protecting the long-term wealth of our country.
Samuel is the leader of Agribusiness, Business, and Commercial Banking at Stanbic Bank Ghana.
Provided by SyndiGate Media Inc.
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