Thoughts from an agricultural development gal in Ghana

I’d like to open a savings account, please.

Crack – crack – crack

Cracking groundnuts

My fingers are tingling and my thumbs are covered in small punctures. I pick up another groundnut (peanut) from my lap, crack open the shell and drop the nuts into a bucket beside me. I drop the shells on the ground, then scoop another handful of groundnuts from the huge bowl in front of me and start again. Around me, under the shade of a huge mango tree, the men and women talk and laugh while they do this work. They have been at this all day, shelling bowl after bowl of groundnuts. In fact, they have been at it all week, processing the groundnuts and selling them at the market.

But why do this work now? These groundnuts were harvested last October and stored in big sacks for the last 6 months. Why weren’t they cracked and sold after harvest, instead of waiting until now? I posed this question to Salifo, my host in the village of Zuo. He responded that he needed the money from the groundnuts to buy inputs for his farm this year, such as seeds, fertilizer and rent for a tractor to plough the land. He said that he knew if he sold them last year, he would have spent the money by this time and he wouldn’t have any money to buy those inputs. So instead, he saved the groundnuts.

This is an important form of savings for Ghanaian farmers. Since Salifo doesn’t have his own savings account at a bank – most people don’t – he has no way to protect his money when he earns some. And in Ghana, when you have any amount of cash, friends and relatives start dropping by to borrow it until, little by little, it’s all gone. Storing crops, or any other liquid asset, is a better way to save that money until you want to spend it.

Salifo and his savings

The other added bonus to selling groundnuts now is the increase in price. After harvest, when the market is flooded with fresh goods, the prices are at their lowest. At that time, a bowl of groundnuts will earn you 1.5 GhC (about $1.20 CAD). But now, at the beginning of the farming season, the market has cooled down and the price has risen to 2.5 GhC ($2.00 CAD). This is another reason to store your crops and sell at a later date. But while this seems like a good strategy, often the more urgent need for cash is what will determine whether a farmer saves or sells his crops.

Of course, not everyone has the option of saving. Often families reach the end of the farming season with nothing left in their stores to eat (and sometimes they run out even earlier). The market is not flooded with crops after harvest because people are stupid and they don’t want to earn the higher price by selling later. It floods because people are desperate for money to buy food and feed their families. This is what it is like to live hand-to-mouth in a country like Ghana. Only those who start with something – a good business plan, proper farming inputs, or a bit of luck – can afford the luxury of waiting to sell their goods after harvest.

My work here is about increasing the number of people who wait to sell their groundnuts. It’s about changing the decision from one of necessity to one of strategic business planning. Overall, it’s about reducing the number of people who don’t even have a choice.

Advertisements

5 responses

  1. Scott K.

    Hey Erin,
    Some really interesting perspective that you offered here.
    I find it altogether interesting that the intention of the market economy is to allow people to prosper, although it often works counter productive to that very nature. This is a great example of that. By selling early, the market pays less while those are the people who need the extra.
    You lose some perspective of the liquidity of assets here in North America and this post really makes that point well.
    Thanks!
    Hope you are enjoying yourself.
    Laura and I think of you and are proud to be friends often!
    Cheers,
    Scott

    April 22, 2010 at 2:56 am

  2. This is a great post Erin! Not only did it take me back to my time peeling cassava and shelling groundnuts under the shade of a date tree in Damongo, but it also reminded me of my host family, who was saving up to build a new room on the compound for their growing family. Their savings account was a small pile of bricks that slowly grew and grew throughout my time with them.

    I also saw other risks associated with harvest storage as well, such as rotting, or improper storage. Cassava stocks that would rot before ever leaving the field. How did Salifo store the groundnuts all this time? Does he have a space designated for harvest storage?

    Thanks for the great post, and blog!

    April 22, 2010 at 6:40 pm

    • Hey Kyle,
      Thanks for the comment! I did ask about storage, but I was told (both by Salifo and by the Agric. officer) that storing groundnuts is not too complicated. They have a storeroom in my compound where they store these big sacks. There are more problems with storing cassava, as you mentioned, or maize, yams, etc. because these are more susceptible to rot and critters (I’m not sure why). But yes, storage is another big problem – I was going to mention it in this blog, but figured I’d keep it short. But since you brought it up, it’s another big challenge these farmers are facing! It’s a good reminder that your savings can depreciate in value if you don’t keep them properly.
      Anyway, thanks for reading! Hope things are going well at the office, say hi for me!
      Erin

      April 23, 2010 at 5:05 pm

  3. Olivia

    Thanks for the post, Erin! It was helpful to hear why many farmers don’t have the option of saving, and then inspiring to hear that Salifo is at the point where he has that choice.
    Cheers,
    liv

    April 27, 2010 at 3:16 am

  4. Hey Erin,
    Loved the post – I could almost hear the groundnuts cracking. Thought this was really interesting – its something I hadnt thought about and sat here staring at my screen for a while thinking about it more after reading your thoughts. Keep up the great work and insightful posts.
    A

    April 29, 2010 at 2:11 pm

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s