Accra, Nov. 20, GNA - The Peasant Farmers' Association of Ghana (PFAG), on Tuesday lauded government's proposal in the 2008 budget to set up Agricultural Development Fund and Farmer Credit Corporation, saying it was a step in the right direction.

Finance Minister Kwadwo Baah-Wiredu, in the 2008 Budget Statement announced the intention of government to establish a self-sustaining Agriculture Investment Fund that would entirely focus on funding agriculture and introduce tax incentives in the banking sector to encourage banks to lend at favourable rates to the sector. Currently, only about six per cent of total bank credit goes to agriculture.

The group, while welcoming the initiative, said efforts must be made to ensure that the benefits did not only go to the minority commercial farmers at the expense of the small-scale holder farmers, mainly food crop, grain producers and livestock and poultry farmers. Mr Mohammed Adam Nashiru, President of PFAG, said the Association's concern stemmed from the budget in which the Finance Minister stated that: "The fund would be to ensure that viable projects are fully funded".

"Our fear here is that small holders who are mainly food crop, grain producers, small scale livestock and poultry farmers may be left out or may find it difficult to benefit from this fund as has happened in earlier cases," he said.

The PFAG had been calling on government to enact a law that would enhance access of farmers to credit and also protect the market of producers of import sensitive agricultural products from unfair competition.

Mr Nashiru said the Association would soon present a draft bill it was preparing to be known as the Agricultural Credit and Competitiveness Bill to the Ministry of Agriculture for consideration. The Bill seeks the establishment of an Agricultural Credit Fund with seed money to be provided by government and the Bank of Ghana to provide financial resources to farmers and producers of agricultural products.

It also seeks to put in place mechanisms to safeguard farmers from unfair foreign competition.

"We are hoping that some of the suggestions, especially, the nature, the scope and the structure of the fund, made in the Bill would be incorporated in government's policy of agricultural financing. Mr Nashiru said without finance and limited access to marketing opportunities being addressed, business activities of the farmers would not be sustained, a trend which is inimical to economic growth. He said he was unhappy that the budget made no mention of how the markets would be protected against importation and dumping of foreign products such as rice and poultry, which threatened local industry. Mr Nashiru called on government to re-open the Nasia Rice Mills, the Bolgatanga Meat Factory, the Anum Valley and the Aveyime Rice projects.