Effective Commodity Exchange roll-out would ensure food security-Minister

Ms Hanna Tetteh, Minister of Trade and Industry on Monday expressed optimism that effective implementation of a Ghana Commodities Exchange (GCX) concept would increase agricultural productivity and ensure food security.

She said the move would encourage multinationals like the Nestle Ghana Limited and Guinness Ghana Breweries Limited to source their raw products from local farmers.

Ms Tetteh was speaking at the opening session of a two-week GCX Stakeholders Training jointly organised by the Ministry of Trade and Industry and the United Nations Development Programme in Accra.

She said GCX would provide Ghanaian smallholder farmers the opportunity to operate within a larger domestic industry with an incentive to increase their production capacity at a better quality and price.

The purpose of the GCX is to create orderly, transparent and efficient marketing system for Ghana’s key agricultural commodities, to promote agricultural investment, enhance productivity, encourage market access and fair returns for smallholder farmers and to facilitate the formalisation of informal agricultural trading.

The workshop, which is currently underway, is to assist the participants, from financial services providers, transporters, regulators, policy makers and farmers, to deliberate on effective ways of implementing the concept and to learn from success stories, especially from the Ethiopian Commodity Exchange (ECX) system.

The ECX, which began trading operations in April 2008, is said to have revolutionized Ethiopia’s tradition-bound agriculture through the creation of a new marketplace that served all market actors, from farmers, traders, processors through exporters to consumers.

It is said to have created trust and transparency through aggressive market data dissemination to all market actors, through clearly defined rules of trading, warehousing, payments and delivery and business conduct, and through an internal dispute settlement mechanism.

Before ECX was established, agricultural markets in Ethiopia were said to have been characterized by high costs and high risks of transacting, forcing much of Ethiopia into global isolation.**