The government has released significant resources to the National Food Buffer Stock Company to purchase surplus maize and rice from farmers, marking the first major financial intervention since NAFCO’s establishment in 2010. The Ministry of Food and Agriculture announced the funding approval to address a potential market glut following projections of bumper harvests in 2025 alongside more than 100,000 metric tonnes of unsold grains from last year.
Majority Leader Mahama Ayariga confirmed Cabinet’s decision during parliamentary proceedings, stating that funds have been approved to empower NAFCO to mop up excess produce and strengthen national food reserves. The timing responds directly to concerns raised by the Chamber of Agribusiness Ghana in September, which warned the grain sector was edging toward crisis as farmers faced debt and many were forced to sell below production cost.
NAFCO Chief Executive Officer George Abradu-Otoo confirmed that licensed aggregators are currently collecting excess produce from farmers and transporting it to storage facilities across the country. Speaking in late October, he assured that funding is already sitting in NAFCO accounts ready for immediate disbursement upon delivery.
A pricing committee comprising representatives from the Ministry of Agriculture, Peasant Farmers Association and other stakeholders has established fair prices for farmers’ produce. The committee assessed all relevant parameters to ensure farmers receive appropriate compensation while maintaining market stability.
The intervention carries both economic and social implications. By purchasing surplus grains, the government aims to prevent sharp price drops that typically follow bumper harvests in rural trading centres, thereby protecting farm incomes and stabilizing rural economies. The stored grains will serve multiple purposes, including supplying the Free Senior High School feeding programme, building emergency reserves, and managing price volatility during lean seasons.
Food products currently drive 13 of Ghana’s top 15 inflation items, making grain market stabilization critical to broader inflation management efforts. The Chamber of Agribusiness Ghana had warned that without intervention, the oversupply could collapse entire subsectors of the maize and rice industry, threatening livelihoods and undermining national food security.
The crisis stems partly from smuggled rice and maize evading duties and quality checks, which flood Ghanaian markets at artificially low prices. CAG alleged collusion between smuggling syndicates and corrupt border officials, emphasizing that illicit trade deprives the government of critical tax revenue while destabilizing farmer incomes.
Parliament member Nureedin Mohammed of Nalerigu-Gambaga had called for an urgent briefing from the Minister of Food and Agriculture on steps being taken to prevent market glut and mitigate widespread post-harvest losses. The Cabinet approval directly addresses those concerns.
NAFCO’s mandate includes guaranteeing minimum prices and ready markets for farmers, mopping up excess produce to reduce post-harvest losses from poor storage, and maintaining buffer stocks to ensure stability in supply and demand. The company purchases, stores and distributes grains to state institutions including the military, schools, hospitals and prisons.
The 2025 budget had made allocations to support NAFCO operations, as announced when Food and Agriculture Minister Eric Opoku inaugurated the company’s reconstituted nine member board in June. Board Chairman Dr. Eric Osei-Owusu, a former NAFCO CEO, pledged to align the company’s operations with the government’s Feed Ghana Initiative.
Licensed buying companies work on NAFCO’s behalf to reach farmers at remote farm gates, with margins added to cover transportation, sacks, drying, bagging, sewing and handling costs. This decentralized procurement system ensures farmers in distant locations can access ready markets without traveling to urban centers.
Economists view the intervention as a market stabilization strategy that could ease pressure on food prices while helping manage headline inflation. The injection of liquidity into rural economies provides immediate cash flow to farmers and aggregators who typically struggle to find buyers during peak harvest periods.
Agribusiness players have lauded the measure as a lifeline for the post-harvest value chain and a step toward more structured grain market management. Farmer cooperatives and advocacy groups say the intervention will help sustain momentum of Ghana’s agricultural transformation under the Planting for Food and Jobs initiative.
Beyond immediate relief, consistent funding for NAFCO could encourage private sector participation in warehousing, logistics and agro-processing, deepening linkages across Ghana’s agribusiness value chain. NAFCO’s storage capacity currently stands at 100,000 metric tonnes following rehabilitation efforts and the One District-One Warehouse initiative.
The Ministry of Food and Agriculture has urged farmers to remain calm and confident as NAFCO prepares to absorb their produce, ensuring a ready market and mitigating adverse effects of excess grains on farm gate prices.
Source: newsghana.com.gh
