Rural service centres improving oil palm productivity in Ghana

Solidaridad partner Achmea Foundation supports rural service centres in Ghana to deliver effective farm management services that will improve productivity in the oil palm sector.

The Achmea Foundation delegation met with Nat-K Company farmers to understand the work they are doing at the resource service centers.

The rural service centres are established by small and medium enterprises with support from Solidaridad.

Marjolein Verstappen, Director of Achmea Foundation, said she was impressed with the role the centres are playing in improving the productivity of oil palm farmers by teaching them best management practices and providing them with effective labor services and high-quality inputs.

“The determination of the centres to scale up their businesses to meet demands from the farmers is admirable and quite entrepreneurial. I am impressed with this success backed by strong managerial qualities of the centres,” she said.

Marjolein made these remarks after a visit to two rural service centres set up in Kade in the Eastern region of Ghana under the “Improving Smallholder Productivity Through Provision of BMP Services By Independent Service Providers In Ghana” project. The project is implemented by Solidaridad with funding from the Achmea Foundation.

The Achmea Foundation delegation meets with Nat-K CEO during the visit.

She was in the company of Achmea Foundation Senior Programme Manager Agnes van Daal and Jan Willem Kuenen, a board member. The delegation was in Ghana to attend some field engagements with beneficiaries and to acquaint themselves with the progress made under the project.

In 2017, the Achmea Foundation and Henkel provided 502,296 euros in grant funding as start-up capital to private sector entrepreneurs for the establishment of four rural service centres along the oil palm value chain. The centres provide professional services to enable smallholders to improve their productivity through the adoption of best management practices. 

This was to help overcome the yield gap, made worse by farmers’ limited knowledge of best management practices, aging farmer population, unavailability of labor, and limited access to required inputs.

Providing SMEs with concessional funding to scale up

Following an evaluation of the project in 2019, the Foundation provided an additional 1.5 million euros, made up of 500,000 in grants and 1 million concessional financing to scale up the operations of the centres.

After evaluating the first phase of the project, we decided to give loans to the entrepreneurs because we were really interested in this innovative way of increasing production and giving farmers a better life, which is what Achmea stands for.

Marjolein Verstappen, Director of Achmea Foundation

Godfred Obeng Amoako, Chief Executive Officer of Agro Quorum, said so far the company has accessed 39,584.20 euros from Achmea Foundation to scale up its services. This, he said, has been the single largest credit facility they have received as a company. 

“With this, we have been able to establish four more centres and currently provide services to 923 farmers. We have also been able to employ 10 permanent workers, as well as 110 casual workers who provide farm management services across our operational areas,” Godfred said.

For his part, Hammond Mensah, Head of Access to Finance at Solidaridad West Africa, said it is important to scale up the operations of the rural service centres to address the agriculture sector transformation in the country. He said Solidaridad believes that service provision is one of the surest ways to achieve that. 

“We are happy with the results that we are getting with this innovative financing of sustainable service provision. Using grant funding to set up and build the initial structures of the business and deploying concessional financing to consolidate and scale up the gains gives the founders adequate fiscal space to create green jobs and to improve farm-level productivity sustainably.”

So far, the four rural service centres (Nat-K Company Limited, Agro Quorum Limited, Greenage Group Limited and JOPOCOS Limited) supported under the project have set up a total of nine service centres in the Ashanti, Eastern and Central regions of Ghana.