AfricaLive: Please tell readers a bit about the DNA of Federated Commodities, and your inspiration for operating in the agricultural sector?
Hajia Maria Adamu: Federated Commodities was incorporated in March 1996 just four years after the government decided to privatise the industry. We used to have Jet PVC as the sole buyer before the government privatised things to encourage competition in the marketing of cocoa.
Global Haulage is our mother company and we are part of the Licenced Buying Companies (LBCs) within the group. Federated Commodities is the pioneering LBC in the group and we are the largest. The four buying companies in the group used to control about 20 percent of the market share. Things have changed over the years with the entry of more firms into the cocoa buying space. Despite the challenges in the industry and the fact that there is increased competition, we remain the top cocoa buying company in the country. Our vision is to be the indigenous LBC of choice for farmers and investors.
The wellbeing of the farmer is of high priority to us. We strive to have a relationship beyond just transactions with our fifty thousand plus farmers who make up our supply base. We were amongst the first indigenous privately owned firms to go into sustainability when it was opened to local firms back in 2012. Sustainability helps us when it comes to traceability and direct certification of the cocoa beans. The company has achieved several milestones since then. We have a larger fleet of vehicles, as well as a subsidiary that does not only cocoa haulage but also other endeavours related to the industry.
Moreover, we have diversified into the cashew market which gives us a great alternative during the lean period of the cocoa season. Part of our community engagement drive is getting into farm service agreements with individual farmers. Deals like that will see us take care of their yield in exchange for the commodity after harvest. Processing is part of our long term plan as well.
AfricaLive: Cocoa has such a rich history in Ghana is almost a national symbol, what is your vision for the African cocoa sector and what role will Ghana play going forward?
Hajia Maria Adamu: Indeed cocoa has been an important commodity for our country. Cocoa is not just a cash crop for us; it has also become part of our politics. The cocoa sector feeds about 800,000 people in the country and issues that affect the industry can be quite emotive. Unfortunately, our industry has suffered a dip in production in recent times. The dip in production has been occasioned by climatic changes as well as factors such as disease. The government has put in place measures whose impact will start being felt in a few years with the expected rise in volumes of production.
The government is putting a focus on increasing production while also encouraging diversification in the overall agriculture sector. Adding value to our cocoa is also part of our national strategy. Value addition will help increase the value of our product, boost our standing in the global cocoa industry, and lead to job creation. Diversification will also see us improve the agricultural sector and boost our national revenue.
Cocoa and cashew processing will help add value and put even more people to work. It will also help more companies like us benefit from the industrialisation drive of the Ghanaian economy. Other than cocoa, the government is focusing on other commodities like coconut and rice production. Diversification of commodities will help ease pressure on the cocoa industry and give Cocobod room to strategise better and add value to the crop. The government is, therefore, looking at other commodities to ensure the agricultural industry reduces its reliance on cocoa.
We are big on helping farmers by helping add value to them. Farmers are improved when we facilitate access to inputs and credit facilities so that they effectively carry out their pre- and post-harvest work. We intend to also help them improve their living income by helping them get important certifications that will see them get paid more. Diversification also helps farmers earn more because they are not banking their livelihoods on just one crop.
Going forward cocoa will not be the dominant crop in Ghana if our diversification plans come into fruition. Cocoa will still be an important and relevant crop but it won’t be as prominent as it is now.
AfricaLive: The launch of the African Continental Free Trade Area will be going ahead in early 2021, hopefully acting as a catalyst for driving Intra-African trade. What are your ambitions, both in the short term and long term, when it comes to trading internationally and contributing to the global market?
Hajia Maria Adamu: Ghana stands to gain greatly with the effective implementation of the AfCFTA agreement. We are well endowed with natural resources and qualified hardworking personnel. Our country must improve its skill base though. The relevant bodies are doing their best and we are coming up but we are still not as sophisticated as we need to be for the international market.
A focus on perfecting what we do is a must because we shouldn’t just look at producing for Ghana. A lack of focus on perfecting our products opens the door for a lot of importations. The majority of items we import can be produced locally, it’s just that we lack the finesse required to make our products more attractive.
The other obstacle in the way of our production capacity is funding. The cost of funding here is so high compared to other places. If the interest rates eat so much into your margins, then you can barely run a profitable venture. If we work on the rate and make funds more accessible, we will create room for more innovation and production in our country.
In Africa, we are looking at maybe getting partners in Cote D’Ivoire as well as South Africa because these are two strong cocoa markets. Kenya is also interesting and then we can look overseas into Europe. We possess the knowledge as far as cocoa is concerned and an ideal partner would be someone who has the technical expertise to process in large scale.
Ghana can be the hub when it comes to business in all spheres if we just do something about our tariffs. This way we will favourably compete with Togo and Cote D’Ivoire. Maybe we also need to diversify our languages and get proficient in French. Ghana is surrounded by francophone countries and that should push us to learn their language if we want to properly do business with them.
AfricaLive: How do you wish to engage with academia to help you create a vision for Ghanaian farming and production?
Hajia Maria Adamu: We have put in place a couple of programmes to help improve the quality of life of our farmers. For instance, we have worked with academics to build schools that will help tool up the youth who can then come into the industry with relevant skills. So far we have constructed seven schools and we keep adding.
Training programmes for farmers are also part of our agenda so that they can learn how to diversify crops and make use of crop by-products. We are also teaching them financial literacy so that they can be empowered. Village savings and loan schemes have now emerged and farmers are able to save for their futures and fund their ventures. We have had interactions with the Kumasi Technical School about the possibility of their students making tools that can help farmers break the cocoa. Discussions are also ongoing on how we can mechanise more processes.
AfricaLive: If you were to bring together Ghana’s leaders from government, higher education, and business to a roundtable meeting held at your HQ – what main issue would you want them to get behind for the good of the economy & country?
Hajia Maria Adamu: I would emphasise the need for skill development. We must cultivate a culture of perfectionism so that we develop the right disciplines and products that serve our people and beyond. If we have the right skills, we will have the right mindsets and ultimately the right products. Of course, we have to tackle issues of cost and infrastructure but I believe skills should be our priority.
AfricaLive: What is your outlook for Federated Commodities in a decade, and what message of confidence do you have for the international community?
Hajia Maria Adamu: We need good partnerships to help our farmers so that we can keep them motivated. We are looking at skill development, education sponsorships, loans and savings programmes and host of other programmes. Our consistency has made us very trustworthy and reliable in a very competitive environment. In a decade, I foresee a company full of diversified professionals that can thrive in many fields and make this company a huge name not only in Ghana but beyond.