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The speakers highlighted the areas where donor focus should lie:
Dr Asante-Traders with the right qualities to sustain grain marketing initiatives should be targeted for credit support; donor expertise is needed to help establish rules and regulations for inventory credit, but these rules should not be too intrusive or limiting; market intermediaries and associated institutions, such as the banking sector, will need skills training.
Mr Cutler-The private and public sectors must be encouraged to talk to each other and overcome problems arising from mutual distrust; assistance will have to be targeted initially at medium- to large-scale organizations; it will be difficult to target support to small-scale private enterprise; the phasing out of public sector support should be provided for. Likewise, governments should be encouraged to liberalize completely (i.e. not half-hearted attempts as has often happened).
Mr Sikpa-The private sector has been shown to be quite capable of pre-financing grain trading, but the impact is reduced by government indifference or even interference-governments should be encouraged to be more pro-active.
Mr Watson-Quality control will only be achieved by thorough understanding of customer requirements and awareness of procedures used to maintain quality; technical training should be directed at the customer as well as the private contractor.
POLICY IMPLICATIONS
The need to persuade governments not to impose restrictions on private enterprise is important. The government role is to provide a facilitating environment and to monitor, for example, national stocks, prices and food quality, within that environment. The private sector needs to be able to rely on consistency over time in government policy and practice. Clearly governments cannot be pushed too hard, but some conditionality in this direction might be appropriate. It will be important to bring together public and private interests, to encourage awareness of each other's problems and to discuss the way forward.
The importance of creating sustainability was emphasized. Donor-funded support projects are often over-prescriptive in terms of targeting particular socio-economic groups, but this sometimes perpetuated the need for outside assistance.
The call from the speakers for appropriate legislation to support food quality is not easily reconciled with market liberalization initiatives involving reduction in the size of the public sector, since legislation implies public sector monitoring. However, there may be considerable scope (in Ghana, at least) for redirection of effort in government activities. Furthermore, reduction in the size of the public sector may lead to better incentives for, and higher productivity from, those remaining in service. An alternative solution suggested was to allow the private sector to monitor itself on the basis that it needs to satisfy the customer. Commodity owners and managers will need certain skills to be able to judge the value of a particular quality control operation.
OPERATIONAL CONSTRAINTS
The principal limitations of private enterprise development in the grain post-harvest sector include access to storage facilities and credit.
Governments of many countries in sub-Saharan Africa control substantial storage facilities, many of which are standing idle following reductions in government funding for grain procurement. Leasing is an option and a means of increasing income for the residual parastatals. Medium- to large-scale traders (who may also be producers) could use such facilities to phase their marketing through the year. This increases local incomes by encouraging ancillary services (processing, pest control, construction).
Much discussion was focused on the introduction of inventory credit schemes into countries like Ghana. The initial inventory is financed by the trader who obtains loans on the unsold inventory. A crucial issue in managing inventory credit is good warehouse management of the inventory and availability of suitable storage capacity through, for example, leasing arrangements. Traders will need to be educated in making presentations to the banking sector and banks should be prepared to support and guide entrepreneurs. Prefinancing of production by traders, where the trader will supply advice and inputs on credit, was also discussed. Successful operation relies on strong links between the trader and the producer. Opportunities for default can be reduced in Ghana by: operating in the central corn belt, where grain is a cash crop, rather than by dissipating efforts in provinces where grain is kept for home consumption; discouraging sale to other traders; providing a reliable market; using locally respected people as representatives and extension workers, motivated by incentives; and by selecting farmers for loans.
It is important that traders are seen, by banks, government and donors, to want support and that the support is correctly identified. A forum is needed to encourage communication, for example, by inviting traders to government-sponsored seminars and workshops.
TECHNICAL SUPPORT
Quality control could become an issue, particularly if grain is sold by volume rather than weight and assessment by eye is used as a means of maintaining standards.
Legislation for freedom from certain quarantine pests will be required, with the responsibility placed on the manager of the stocks and not the pest control company. Managers may elect to charge a storage fee to cover pest control services with a guaranteed output. For example, managers might demand a record of CT products achieved as a measure of the success of the treatment and could be trained in their interpretation.
Maintaining standards will become important when large numbers of pest control companies emerge to exploit a potentially profitable market. Setting up a professional association will give a certain amount of protection against poorly equipped operators, but proper control will only be achieved by training both customer and contractor and by setting up appropriate contracts.
Opportunities should be identified to make efficient use of redundant infrastructure and trained staff from the public sector, by leasing grain storage and handling facilities and by encouraging staff transfer to the private sector. It may be the role of donors to monitor the policy reform process and to build up confidence in the private sector.
Finally, there is a need for information on the quantity of grain in the system as early warning of shortages or surpluses. Traders could be required to reveal their stock levels on a regular basis.