Generating a Stronger Market for Maize Farmers

Ghana holds the potential to become a breadbasket for west Africa in the 21^st century, but post-harvest losses for the country’s small-scale maize farmers currently run as high as 30 percent of total yield. This situation diverts essential income out of farmers’ pockets and limits their ability to invest in land improvements, send their children to school and save for retirement. A lack of dependable buyers is the primary cause for the high spoilage rate.

With support from ADF, General Mills Company, Limited (GMC), near Kumasi is brewing up more sales for maize producers by supplying the country’s major beer producers – Accra Breweries, Limited (a subsidiary of South African Breweries) and Ghana Breweries, Limited (a subsidiary of Heineken) – with processed maize grits as a domestic replacement for imported malt.

GMC’s contract with Ghana’s two largest beer makers builds on import-substitution incentives adopted by the Government of Ghana (GOG) in 2002 that have encouraged the breweries and other internationally owned subsidiaries to buy locally produced grains and other primary products for their food processing operations.

By adopting a 50 percent replacement of malt with maize grits, the breweries are expected to more than double their purchase of milled maize powder from GMC, from 5,200 metric tons per year to 11,200 metric tons. GMC will also scale up operations to supply Accra Breweries Limited with maize meal for beer production at its plants in Cote D’Ivoire and Togo and meet a regional demand for maize replacement in beer across west Africa’s ECOWAS nations that is estimated at 90,000 metric tons per year.

GMC is also increasing its production of secondary products for Ghana’s domestic market, including maize flakes for breakfast cereals and processed maize bran that will be sold to poultry farmers as chicken feed.

The ADF project will allow GMC to purchase new maize dryers, a shelling machine, and a forklift for its plant operations and computerize its business operations and accounting system. ADF funds will also provide a working fund to establish a revolving loan program for the company’s small-scale farmers and capital to ensure up-front purchase of grain sold to GMC by its suppliers. The revolving loan fund will allow farmers to hire plowing services, acquire better seed and fertilizer, and purchase new farm implements. These inputs will significantly enhance the production potential of maize farmers around Kumasi.

The grant will also support training in financial management, quality control and marketing for GMC staff that will be conducted by ADF’s Ghana partner organization, INPRODEC.

In addition, GMC will establish a provident fund for its employees that will match salary contributions up to the level of 10 percent, and the company has committed to contributing four percent of its annual profits to the revolving loan fund and three percent of its annual profits to a local community development fund that will be established by the Bosumtwi Kwanwoma District Assembly. The community development fund will help finance the health and educational needs of surrounding villages that are home to its factory workers and its primary maize suppliers.

It is expected that these inputs will produce a five-fold increase in GMC’s output of maize grits, from two metric tons per hour to 10 metric tons, a 15-fold increase in net income, and a quadrupling of GMC’s sales across domestic and regional markets.

GMC’s growth will also allow the company to increase annual salaries for its workers from US $295 to US $644 (compared to the national average income of US $ 304) and expand the number of its full-time employees from a current baseline of 22 to more than 40. GMC’s revolving loan program is expected to expand its outreach to nearly 500 local farmers by the end of the five-year project.

Graphics/Captions: 

General Mills Company of Kumasi is expanding its production operations and providing hundreds of small maize growers with access to a consistent and dependable buyer, higher incomes and a revolving credit system that is financing key agricultural inputs.

Photos by Christine Fowles and Samuel Opoku.