Ghana Agriculture Sector Investment Programme (GASIP)

Introduction

The Ghana Agricultural Sector Investment Programme (GASIP) is a private sector-led value chains programme with a demand and market driven approach in its implementation. GASIP is MOFA’s main programme designed to provide the framework and institutional basis for long-term engagement and supplementary financing for scaling investments in value chains in Ghana. It is currently being funded by IFAD and the GOG. GASIP is nationwide with its National Project Office based in Accra with 2 Zonal offices in Kumasi and Accra.

Project Basic Data

Basic programme costs over 6 years, including contingencies, taxes and duties, are estimated at US$ 113.2 million. A total of US$ 71.6 million of IFAD funding will be mobilized for the first 6 years (2 cycles). There is US$ 10 million ASAP grant funding for climate change adaptation activities. GoG will finance taxes and duties on imported goods, and Value Added Tax (VAT) for a total amount of US$ 9.3 million. The PFIs are expected to provide credit of at least US$ 17.5 million. Contribution in cash or kind of beneficiaries is estimated at US$ 4.8 million, that of the District Assemblies at US$ 2.1 million.

Table 1: Programme Background Data

Programme Overview

The overall goal of GASIP is to contribute to sustainable poverty reduction in rural Ghana. The Programme Development Objective (PDO) is: “agribusinesses, including smallholders, have enhanced their profitability and climate change resilience”. 

GASIP is designed as a long-term programme that will be implemented in two (2) cycles of 3 years each.  The initial design covers the first two cycles (3 year/cycle) or 6 years.  Prior to the end of each cycle an Inter-cycle Review Mission (IRM) will be organized to assess progress, prepare the next cycle and justify additional funding.  The Programme is being implemented along three components:

• Value Chain Development;
• Rural Value Chain Infrastructure and
• Knowledge Management, Policy Support and Coordination.

Component 1: Value Chain Development is designed to formalize agribusiness agreements with small holder farmers, ensure increased and systematic access to and use of short and long term financing for agribusinesses and mainstream climate change resilience across selected agricultural value chains through a broad promotion of technologies.  Three (3) sub-components are:

1.1. Agribusiness Linkages and Development;

1.2. Rural Financial Services;

1.3. Climate Change Resilience.

Subcomponent 1.1 (Agribusiness Linkages Development)

The objective of this cub-component is to formalize agribusiness agreements with smallholder farmers, allowing them to reliably access factor and output markets. Recommended interventions under the sub-component include:

• Support the selection and analysis of value chains;
• Facilitation support; Establish Value Chain Committees (VCCs);
• Technical and institutional capacity building of Farmer Based Organizations (FBOs) and other stakeholders; and
• Innovation mainstreaming.

Subcomponent 1.2 (Value Chain Financing)

The objective of this sub-component is to ensure increased and systematic access to and use of short and long-term financing for value chain businesses. Recommended interventions under the sub-component include:

• Provide capacity building for Rural and Community Banks (RCBs) to improve performance in liquidity management, delinquency management, structured trade finance and savings mobilization;
• Support universal banks in strategic and operational development for structured trade finance; Promote equity style investments in value chain enterprises including finance leasing and venture capital;
• Promote equity development in RCBs through direct investment and linkage with larger banks;
• Match high potential, weakly capitalized value chain actors’ equity to leverage finance for investments in equipment and infrastructure through grant mechanisms.

Sub-component 1.3 (Climate Change Resilience)

The objective of this sub-component is to mainstream climate change resilience across the selected agricultural value chains through a broad promotion of technologies proven elsewhere. Recommended interventions under this sub-component include:

• Undertake commercially valid adaptive trials and demonstrations of modern conservation agriculture techniques under rain fed conditions and in –situ rainwater conservation techniques;
• Undertake demonstrations of efficient water-use techniques within new and existing irrigation systems;
• Support institutional capacity building and enhanced public awareness of private and public value chain actors in the field of climate change resilience.

Component 2: Rural Value Chain Infrastructure is designed to leverage investments in commercial infrastructure and facilities and finance essential public infrastructure for the growth and viability of associated value chains.  The two (2) sub-components are:

2.1. Productive Infrastructure and Facilities;

2.2. Enabling Public Infrastructure.

Sub-component 2.1 (Commercial Infrastructure and Facilities – Warehouses and Packhouses)

The objective of this sub-component is to support investments in commercial infrastructure and facilities owned by a private sector player or a District Assembly, but operated by a private sector entity for the benefit of all value chain participants.

Subcomponent 2.2 (Enabling Public Infrastructure)

The objective of this sub-component is to finance essential public infrastructure (completely operated and maintained by the public sector) for the growth and viability of associated value chains.

1. Feeder Roads

• Km of rural roads rehabilitated (RIMS) - 1200 km
• Km of rural electrical connections - 450 km

1. Irrigation Schemes

Component 3: Knowledge Management, Policy Support and Coordination is designed to create an enabling environment for smallholders; and the coordination, monitoring and evaluation of Programme activities.  Two (2) sub-components are:

3.1. Knowledge Management, Harmonization and Policy Support; and

3.2. Coordination, Monitoring and Evaluation.

Subcomponent 3.1 (Knowledge Management, Harmonization and Policy Optimization)

The objective of this sub-component is to create an enabling environment for smallholders to participate in profitable and climate change resilient agricultural value chains. The recommended interventions under the sub-component include:

• Strengthen GOG capacity for data collection and database development, policy analysis and optimization, as well as harmonization of value chain tools;
• Provide institutional support to umbrella organizations of relevant private sector organizations and strengthen multi-stakeholder processes for advocacy.

Subcomponent 3.2 (Coordination, Monitoring and Evaluation)

The objective of this sub-component is to ensure overall coordination of the Programme. The recommended interventions

Status of Implementation /Achievement  

GASIP was confronted with start-up challenges within the first four years of implementation (June 2015 - June 2020). Coming from a low disbursement rate of 10% as at June 2019. GASIP currently has disbursement rate of utilized about 74% of the IFAD loan to create value for the smallholder farmer. It has also utilized about 58% of the ASAP grant.  

GASIP-I has partnered with 53 VCDs which in turn have partnered with 1,200 FBOs mainly for producing rice, maize, soya, cassava and some vegetables across all the major agroclimatic zones in the country. GASIP has supplied USD 13.6 million as matching grant support to the beneficiaries to ensure their access to quality and timely inputs through the VCDs. The VCDs have purchased and provided high-quality crop production inputs to 47,509 individual FBO members. All the VCDs have signed written agreements and action plans with the FBOs with the commitment to purchase the produce after harvest. The partnerships between the VCDs and the FBOs are based on diverse models, e.g. out-grower model, captive farming models, FBO-GCX linkage brokering model. The beneficiary farmers have received improved and timely inputs through the VCDs in coordination with their FBOs.

GASIP has also received approval to procure 31 tractors and implements for distribution VCDs and FBOs. Currently the project has procured and distributed 20 out of the 31 tractors and distributed to beneficiaries. Under the Enabling Rural Infrastructure component, the Project has selected 10 value chain clusters and has constructed about 127 Km of feeder and farm track roads in the Greater Accra, Central, Brong Ahafo, Volta and Ashanti regions. All construction has been completed and handed over to the project and MoFA.

Anecdotal evidence have shown that the beneficiaries have experienced over 50% increase in yield due to good quality and timely access to the inputs followed by regular technical guidance by the VCDs and government extension staff during the season. The SM also reports that GASIP-I has achieved 59% financial progress almost entirely in a single year (2019) indicating the high level of responsiveness and demand for GASIP-I services by FBOs through private sector VCDs.

Under the ASAP grant, a total of 53ha Conservation Agriculture demonstration/Learner plots and 486ha farmer fields have been established reaching 1,320 smallholder farmers directly. These SHFs has so far received training on various Climate Smart Agriculture technologies and weather information services. The programme has also successfully installed ten (10) automatic weather stations across the programme beneficiary Districts mainly in the northern zone. The installation of the automatic weather stations provided smallholder farmers with real-time weather information services.