How Financial Institutions Can Catalyze Sustainable Food Systems
By Samuel OKANG-BOYE
Sustainable agriculture is fundamentally about ensuring that future generations can meet their needs while addressing the pressing food and nutritional demands of today.
In Ghana, where the population is \xa0projected to rise from 33 million to over 50 million in the next two decades, the need for action is urgent. Stakeholders must move beyond rhetoric and take bold, decisive steps to secure the nation’s food future – without sacrificing the health of our soils, 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 agriculture, this translates into practices that restore soil health, conserve water, and minimize environmental harm.
Sustainable agriculture is thus more than just an ecological objective; it is a crucial economic and social necessity, intricately linked to the future wealth and robustness of our country.
Why Financial Institutions Should Lead the Way in Promoting Sustainable Food Systems
The role of financial institutions in Ghana’s agricultural transformation cannot be overstated. Banks and financial services occupy a crucial spot in enabling businesses to grow, innovate, and survive.
In the context of agriculture, particularly food production, this role is even more significant because food is a primary human need. If Ghana cannot meet its growing food and nutrition demands sustainably, we face not just economic setbacks but threats to national security and public health.
Therefore, financial institutions bear responsibilities that extend beyond merely generating profits. At Stanbic Bank, we are committed to making a positive impact and ensuring that we leave our community in a better state than when we first encountered it.
Putting money into sustainable farming isn't just good for business; it also plays a crucial role in securing food supplies for future generations.
International organizations like the Food and Agriculture Organization (FAO) estimate that food production should increase by at least 70% within the coming ten years to address worldwide demands. On a local level, considering our swiftly growing populace, we have to boost agricultural output—but in methods that won’t exhaust our limited natural assets.
By allocating resources to sustainable food projects, financial institutions are strongly engaging in the wider discourse around environmental stewardship at both national and international levels. This approach helps them meet ESG criteria while also fortifying the durability of their investment portfolios over time.
Reducing Risks in Agriculture to Unleash Investments
A major hurdle in agricultural finance continues to be the perceived substantial risk associated with this industry. Historically, farming has been viewed as a gamble, significantly influenced by unpredictable climatic conditions.
Over the past few years, extended periods of drought have severely damaged crop yields, particularly affecting essential foods like 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 lead to substantial improvements.
Nevertheless, establishing sustainable irrigation necessitates patient investment along with privately led initiatives to guarantee ownership, upkeep, and enduring feasibility.
Apart from enhancing irrigation systems, reducing risks should also include establishing solid crop and livestock insurance programs along with novel 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 high-risk 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 understand that conventional financial services do not adequately address the specific requirements of the agricultural industry.
This is precisely why we've developed specialized sectors within the bank by bringing aboard agricultural experts who comprehend the intricacies and rhythms of farming enterprises.
Our approach goes beyond offering plain vanilla products; instead, we provide tailored financial solutions that respond directly to the realities on the ground.
Through initiatives like our Africa-China banking proposition, we connect agricultural businesses with partners and suppliers in China, facilitating access to essential technologies such as farm machinery and processing equipment.
We have also forged partnerships with development finance institutions like the World Bank, IFC, AfDB, and the Mastercard Foundation, enabling us to offer concessional lending and de-risk the agricultural sector.
Moreover, recognizing the shift towards digitalization, Stanbic Bank has invested heavily in digital platforms, ensuring that farmers and agribusinesses can access financial services conveniently without wasting productive time in banking halls.
These initiatives indicate a carefully planned, all-encompassing approach aimed at bolstering and expanding Ghana’s sustainable food systems.
Policy, Education, and Enhancing 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 reconsideration of the way we educate and cultivate talent within the realm of agricultural financing.
To bridge the knowledge gap that hinders innovation in agricultural financing, more targeted education and skill enhancement programs are necessary.
In terms of policy, we should focus on developing specialized financial instruments for various sectors. Comprehensive crop insurance, intricate trade financing options for stock management, and customized lending programs for agricultural businesses are essential rather than optional. Additionally, farmers ought to be equipped with resources for adapting to and mitigating climate impacts.
They require access to enhanced seed types that have quicker maturation periods and can endure extreme weather conditions, along with information regarding regenerative techniques such as cover cropping, intercropping, 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 crucial position, acting beyond mere financiers to become genuine collaborators in establishing a robust, equitable, and environmentally-friendly agricultural sector.
In this way, we are not just securing our business’s growth but also protecting the long-term wealth of our country.
Samuel is the head of Agribusiness, Business, and Commercial Banking at Stanbic Bank Ghana.
Provided by Syndigate Media Inc. ( Syndigate.info ).
