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Guest Post: Creating sustainable companies: Lessons learned from Ghana’s Agribusiness Centers (Damiana Astudillo, MCC)
by Damiana Astudillo, Associate Director of Agriculture and Rural Development, Millennium Challenge Corporation (MCC)
The Millennium Challenge Corporation (MCC) made critical investments in the agriculture sector in Ghana as part of a five-year Compact that was completed in February 2012. One key area of focus was investments in post-harvest. In Ghana, the average post-harvest losses for rice and corn, two of the main staple crops, range from 30 to 50 percent which can offset any gains in productivity resulting from other interventions and contribute to food insecurity particularly among smallholder farmers. The MCC invested Agribusiness Centers which are centers aimed at reducing post-harvest losses by offering processing, drying, storage and marketing services for staple crops. The challenge for the MCC as a donor was to create the right conditions and structures to promote the financial sustainability of the centers. The centerpiece of the post-harvest model was the creation of new agribusiness companies with shareholder representatives from the private sector and smallholder farmers. With a clear and formal benefit-sharing system and a legally established company, the Ghanaian farmers and private sector businesses were in a better position to profit from the technical assistance along with increased access to credit, roads and irrigation infrastructure that were provided as part of the MCC-funded compact. A number of lessons have been learned in the process of establishing the agribusiness centers, including:
- The process is complex and transparency is crucial: It takes time and significant and continuous engagement and dialogue between the potential partners –private sector investors and farmers but this process pays off in trust and respect among parties and a genuine partnership in the end.
- Open and transparent competition revealed new players: It really helped to attract a range of investors and farmer based organizations (FBOs) which brought an array of experience, capacities, and motivations that allowed MCC and its local partner MiDA to select the type of investors and FBOs that had important characteristics and qualities needed to be a viable partner.
- To set up such structures the team facilitating the formation of new companies requires a diverse mix of skills social scientists, legal and business experts and experience working with cooperatives. This integrated approach was crucial to address different business, legal and social cross cutting issues.
For more detailed information on the Agribusiness Centers visit www.mcc.gov/documents/pub-2013001132901-kin-volume-two-number-one.pdf#page=51.