Grain banks provide Ghana caterers with products on credit
An arrangement with community grain banks that benefits both smallholder farmers and caterers has been initiated by the Procurement Governance for Home Grown School Feeding (PG-HGSF) project of SNV in Ghana. Five community grain banks have signed contracts with PG-HGSF to buy and sell smallholder farmers’ products and extend these products to caterers on credit, which will allow caterers to continue cooking for local schools while waiting for their payments from the Ghana School Feeding Program.
Payment delays from the Ghana School Feeding Program have been a challenge for the PG-HGSF project because it makes it difficult for caterers to buy grains and products from smallholder farmers. Without credit assistance (in the form of cash or products), the delayed payments prevent caterers from running their businesses and providing school meals. Often caterers do not have sufficient cash funds to extend their services during the delay period and they will choose traders or larger suppliers who can provide products on credit instead of smallholder farmers who require immediate payment upon delivery of their goods.
With the assistance of SNV, five participating grain banks are already supplying grains on credit to 11 caterers who feed over 2700 pupils in different schools. The Grain Banks are located in the Sissala East district, which is in the upper west region of northern Ghana. They work within the communities of Banu, Bujan, Gwosi, Kassana, and Sakai. Currently, they provide caterers with grain prices that are slightly lower than market prices and, through proper record keeping, they are able to track the sources of the grains as well as document quantity and quality of the products.
Alimata Abu, the SNV PG-HGSF governance advisor, stated that, “The grain bank intervention is timely as the stakeholders of school feeding in the district are committed to supporting its success, which could expand its reach to all caterers. Those contributing to the Grain Banks are also enthusiastic about working with caterers and schools because they are happy to see their own farm produce used to feed their own children.”
Alimata, from her observations, expects even more farmers will participate in the grain bank intervention during the next harvest season, when grain banks plan even larger purchases of grains and products to provide caterers. We will keep you updated on the results!