Liberia: LACF Boosts Access to Finance
Two of the several farm equipment procured for beneficiaries under the LACF grant.
Farmers and agripreneurs in Liberia’s agricultural sector continue to suffer many challenges due to the lack of or limited access to financial assistance. But with the introduction of the Liberia Agriculture Commercialization Fund (LACF), of the Ministry of Agriculture, many farmers and agribusinesses can now access finance to become potential and viable farmers or enterprises in the sector.
The US$22 million, 5-year grant aims to increase agricultural productivity and commercialization of smallholder farmers and agribusinesses for selected value chains of rice, vegetables and oil palm. However, other value chains that demonstrate commercial viability and integrate smallholder farmers in the intervention areas are also inclusive.
The LACF further seeks to achieve its objective of increasing agricultural productivity and promoting smallholder commercialization by facilitating private sector investment in selected value- chains and by fostering productive linkages between smallholder farmers and selected agribusiness firms to promote access to markets.
An oil palm storage procured under the LACF grant for beneficiaries.
The Fund addresses financing and technical assistance challenges faced by agribusinesses, farmer cooperatives and financial Institutions that have plans to work with smallholder farmers in out-grower schemes.
It was launched by President George M. Weah during the 2020 annual agricultural fair. The program is a component of the World Bank and the International Fund for Agricultural Development (IFAD) projects under the Ministry of Agriculture, managed by Deloitte, a Ghanaian financial firm.
The matching grants have currently assisted 23 farmers and agribusinesses to expand production following through a vigorous vetting and approval processes.
According to the Ministry of Agriculture, approximately 38,000 target smallholder farmers and agribusinesses are expected to benefit within the next five years.
One of the several rice projects in the sector that benefitted the grants
The first batch of grants, valued at US$2 million, has been disbursed to the targeted value chains.
The beneficiaries used the grant to purchase vehicles to transport produce, construct warehouses, upgrade the capacities of processing equipment, and improve irrigation structures to produce rice in two cropping seasons, among others.
“This is the first of its kind for the government to assist members of the agricultural sector in such a manner. We believe with this kind of intervention people in the sector will reduce poverty in their lives and supply the market. We are very much grateful to the Government for this initiative,” said Michael George, a private sector participant.
Liberia’s agricultural sector still remains largely donor-driven, with no or limited public support as a direct benefit to the sector.
Agriculture Minister Jeanine Cooper has described the grant program as a great milestone for her administration.
“Working with the private sector is our greatest milestone. The government can’t do it alone to solve the problem of food insecurity. It will require a collective effort on the part of all Liberians,” the minister once stated.
However, it is true that the LACF grant is making some progress into the sector. But some businesses within the sector have expressed the need for additional support to adequately address the challenges facing them. Two such businesses are the Agriculture Infrastructure Investment Company (AIIC) and the Selma Agriculture Development Corporation (SADC) in Lofa County. Some stakeholders in the rice sector have perceived that the two industrial rice processing mills will probably need US$1 million each to get completed to become fully functional so as to supply the market.
If fully supported by the government, the facilities in the county stand to create livelihood opportunities for many smallholder rice farmers in terms of income generation through the sale of paddy. But the funding provided to the facilities is said to be limited.
For instance, the AIIC facility received US$124,000 as grant from the LACF after having applied for approximately US$375,000.00 under the grant program to work on the facility and work on paddy purchase from farmers. The LACF benchmark calls for US$50,000 to US$200,000 for assistance based on a co-investment criteria.
Stakeholders of the rice sector have said that while they highly appreciate the assistance from the government, but given the current global circumstances for rice, there is an urgent need for the government to address the challenges facing the facilities.
“There is a need for the government to ensure that those facilities become functional as soon as possible. It will require funding from the government or from the donor's projects,” said Amstrong Jagbah, CEO of Agriculture Liberia.
The government has drafted the fiscal 2023 national budget, allotting 1 percent of the total budget for agriculture, which is far below the Malabo framework for food and nutrition security, which calls for a 10 percent budgetary allotment for agriculture from every African government. There is absolutely no money to support domestic rice production, except for money coming from external sources.