Business News of 2014-02-11

National Food Buffer Stock Company not for sale - Minister

The Minister of Food and Agriculture, Clement Kofi Humado, has debunked reports in sections of the media suggesting that the National Food Buffer Stock Company (NAFCO) is up for sale.

Some reports had claimed that government was looking at privatizing the Buffer Stock Company for lack of funds to run the vital State asset. However, the Minister of Food and Agriculture, Clement Kofi Humado, responding to the report for the first time in an interview with Ultimate Radio in Kumasi, stated that the report is false.

The report which quoted the minister, was met with condemnations from some NGOs and civil society groups who warned against eminent hikes in local food prices if the company was left in private hands.

Although Mr. Humado admits the company is not in a sound financial position, he said government is rather seeking private partnership in some specific areas of the company’s operations.

Responding to these concerns however, Mr. Kofi Humado categorically told the Ultimate Morning Show Host, Kofi Owusu that “government does not intend to privatize the National Food Buffer Stock Company”.

He explained that the company had a twofold social and commercial mandate, adding that the social aspect, which involved holding of adequate stocks as security for unforeseen natural disasters and mopping up of excess produce to protect farmers from unfair pricing, was not going to be left to any private entity.

“The company has to hold adequate stocks to intervene in times of disasters like floods, droughts and bush fires. We also have to intervene in the markets when farm gate prices are falling below a certain level which will make the farmers lose revenue, to stabilize the prices. That function is very social and government has to take full responsibility for it,” the Minister stated strongly.

He further noted that the part where government seeks legal backing is to allow for private partnership for the mode of marketing and distribution of any excess farm produce.

“When stocks are held beyond buffer stock levels, it has to be distributed to end users like the feed mills, agro processing companies and even exporters if possible. This facet is commercial in nature and because it requires enough money to do so, I said we were looking for private sector participation and unfortunately the reporter misquoted it as privatization. The two are different” he emphasized.

He said the partnerships being requested was not only in monetary terms but also for private sector players who could build more warehouses and provide trucks to cart farm produce from the hinterlands to the company for purchase and storage.

He assured for instance that anyone who had articulated trucks could be allowed under a Public Private Partnership arrangement to enter into a memorandum of understanding with NAFCO for the purchase of produce it carts on the company’s behalf.

Mr. Humado further refuted claims suggesting that “the 15 million Ghana cedis seed capital for the project announced during the inauguration is yet to be fully redeemed by government.”

The Minister said since its inauguration in 2010, government had capitalized the company with 15million cedis” but admitted that the amount has not been adequate to support operations of the company.

Mr. Humado said his outfit was constrained in seeking any financial support from government considering government’s current unhealthy financial position. He, however, assured that his ministry was still thinking outside the box to package itself to attract funds from both internal sources and donor agencies to keep NAFCO running.