Reviving Ghana’s poultry sector: Smallholder Giants – Unleashing resilience through VSLAs

Ghana's ambitious quest to revitalise its poultry sector confronts a fundamental reality: its smallholder base profoundly shapes the agricultural landscape. Over 80 per cent of Ghanaian farms are typically less than two hectares (MoFA, 2022). 

Yet, a multitude of formidable challenges consistently impedes their growth and competitiveness.

While the undeniable efficiency of large-scale operations holds significant allure, the most sustainable path forward for Ghana's agricultural industry in the medium term critically depends on empowering these numerous smallholder farmers, transforming them into efficient, resilient contributors. 

In this context, the Village Savings and Loan Association (VSLA) model has proven particularly effective. Its broad applicability spans various agricultural commodities, extending well before and beyond just poultry.

The VSLA revolution: A grassroots powerhouse

VSLAs are not just microfinance schemes; they are community-based engines of empowerment. Imagine a collective where individuals, often in rural and underserved areas, pool their meagre savings, building a shared fund from which members can borrow at low-interest rates. 

This transparent, self-managed system, governed by elected officers and with clear bylaws, rebuilds trust where formal banks often fail. Women dominate these groups and are led by women. 

Crucially for smallholder farmers (SHFs), these groups offer immediate, collateral-free loans for critical needs.  

Beyond credit, VSLAs enable collective procurement of inputs. By aggregating demand, groups can negotiate substantial bulk discounts on inputs, significantly driving down costs for each farmer and streamlining the supply chain. This collective muscle transforms individual struggles into shared strength.

A 2019 report by Ghana’s Ministry of Finance, referencing the Savings Groups Information Exchange, revealed that VSLAs in Ghana had mobilised $56 million in savings among more than 850,000 members, primarily women in rural and peri-urban areas. 

Globally, CARE—pioneer of the model—estimates that VSLAs now control over $1 billion in savings annually, underscoring their transformative potential.

Beyond finance: Knowledge, tech and resilience

The impact of VSLAs extends far beyond financial transactions. Their weekly gatherings naturally evolve into informal farmer field schools, where members organically share invaluable agronomic tips and demonstrate new techniques. 

This peer-to-peer learning creates a robust, localised extension service. Furthermore, VSLAs are proving to be powerful gateways for ICT4Ag services. Digital tools, such as mobile-based savings ledgers, SMS alerts for market prices, or even weather advisories, become highly cost-effective when deployed to an existing, cohesive group. 

These groups foster digital literacy, turning early adopters into trainers who rapidly multiply technological know-how across the community.

The impact is tangible: lenders across the spectrum, from commercial banks, through rural banks to input credit providers, all attest to the high repayment behaviour of the VSLAs.

Also, numerous studies show that VSLA members were twice as likely to purchase improved seeds and agrochemicals. In northern Ghana, VSLA-affiliated SHFs reported a 30 per cent increase in off-season vegetable production, spurred by micro-credit for irrigation. 

Fortifying the future: Social protection and embedded insurance

To truly make these VSLAs resilient and propel the agricultural sector forward, we must integrate crucial layers of protection. Smallholder farmers, particularly in rural areas, face disproportionate risks from climate change (floods, droughts) and personal vulnerabilities (illness, accidents, ageing). 

Here, VSLAs can evolve to become platforms for comprehensive social protection products. By leveraging their social funds, VSLAs can offer microinsurance cover for life, death, on-farm accidents, hospitalisation and contribute to informal pensions. 

This layered protection safeguards livelihoods and prevents minor shocks from becoming catastrophic setbacks. For poultry farmers, this could mean specific coverage for disease outbreaks, unexpected flock mortality or losses due to extreme weather, ensuring they can rebuild without spiralling into debt.

Furthermore, fostering resilience and mitigation demands innovative financial tools. Embedded insurance models that bundle crucial crop and livestock insurance with VSLA financial products can be deployed.

Imagine an agric-loan or input credit that automatically includes climate-risk insurance, protecting the farmer's investment against unforeseen weather patterns.

This approach de-risks the entire value chain, encouraging greater investment and more sustainable practices.

By promoting widespread awareness and adoption of climate-smart agricultural practices and ICT4Ag tools—providing critical support for informed decisions on optimal planting date, input selection and enhanced productivity— farmers are empowered to navigate a changing climate. 

Market access and value addition

Even with enhanced production, the smallholder poultry and crop farmers often struggle to access lucrative markets. VSLAs offer a powerful solution. 

By pooling their produce, members can collectively meet larger market demands, negotiate better prices with buyers and reduce individual transportation costs. 

This aggregated volume makes them more attractive to larger off-takers, including hotels, restaurants and even formal processing plants that might otherwise overlook individual smallholders.

VSLAs can facilitate direct linkages to these markets, bypassing exploitative middlemen and ensuring farmers receive a fairer share of the value chain. 

Moreover, groups can collectively invest in basic value addition, such as improved cleaning, packaging or even small-scale processing equipment, which can significantly enhance the marketability and profitability of their poultry products. This shift from scattered sellers to organised suppliers is a game-changer.

Policy pathways

For VSLAs to truly revolutionise Ghana’s agricultural sector, supportive policy is paramount.

Government and development partners must recognise VSLAs as key agents of change, moving beyond short-term projects to integrate them into national agricultural development strategies. This includes:

•    Formal recognition and capacity building: Providing legal recognition and tailored training for VSLA leadership in governance, financial management and cooperative principles.

•    Support to form Apex VSLA (or VSLA Federation/Network): A secondary-level organisation formed by multiple, mature, individual VSLAs that come together to collectively pool larger capital, provide bigger loans and access more sophisticated financial services and market opportunities beyond what a single group can achieve.

•    Linking VSLAs to formal finance: Creating pathways for successful VSLAs to transition into or partner with formal financial institutions, allowing them to access larger credit lines and expand their operations. This could involve guarantees or blended finance mechanisms.

Conclusion

The journey to revive Ghana’s poultry sector is complex, but the path of empowering smallholder farmers through resilient VSLA models offers a powerful, proven solution. 

By championing their access to flexible finance, fostering collective action in input procurement, leveraging peer-to-peer knowledge transfer, embracing digital innovation, streamlining market access, facilitating value addition and crucially integrating robust social protection and embedded insurance, we can transform the landscape. 

These tools are not mere additions; they are the bedrock upon which our smallholder farmers can build unshakeable resilience, driving the agricultural sector—and, indeed, Ghana’s economic renewal—confidently forward.