The economic impact of inventory credit programme (ICP) on cereal farmers in the PRU District of the Brong Ahafo Region

Thumbnail Image
Journal Title
Journal ISSN
Volume Title
Small - scale farmers make up more than 90 percent of the Pru district farming population. Although their production represents nearly three quarters of the district’s food produced, small-scale farmers do not enjoy any real market clout. As a result, they remain classic price-takers generally isolated from market information and profitable market opportunities and also find it difficult in accessing working capital loan. 111100 Inventory Credit Programme (ICP) is seen as a panacea to the exploitation by middlemen of farmers in the rural areas, the wastage of farm produce during the peak period in light of non-availability of processing centers and the difficulty of credit accessibility by small-scale farmers. The goal of this study is to examine the effects of ICP on the socio-economic lives of rural cereal farmers in the Pru çlistrict by assessing the impact of ICP on Access to Credit, determining percentage Net Incremental Benefit of ICP to farmers over a 5 year period and identif’ Non — Quantifiable Benefits of ICP to the district. The entire TechnoServe-assisted groups in the Pru district served as a target population. Thus, members of the 15 groups in 8 communities were considered. This population was selected because that would give a wide coverage of the result of the findings. In addition to this, data were collected from YAPRA Rural Bank; the rural bank operating and collaborating with TechnoServe in the implementation of ICP in the district. By contacting both ICP participating and non-participating cereal farmers, and the maj or lending institution for ICP in the Pru district primary information was obtained for the study. From the study it was realised that besides quantifiable benefits accrued to participating farmers (access to credit, premium price) there are other long-term socio-economic benefits such as improved food security, stable food prices and incomes, market and service linkages creation, group development promotion of local investment to both the participating communities and farmers. The significance of this findings is that Inventory Credit model has shown its effectiveness in not only enabling small —scale farmers in rural districts to access formal credit but also shown its effectiveness in fighting hunger and reducing extreme poverty in the Pru district, it can be selected as an example of ‘good practice’ to be implemented at a national level to other storable crops.
A Thesis submitted to the Department of Banking and Finance, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Executive MBA, 2008