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Farming in Ghana and the economics of trust and community wellbeing

I had the good fortune to work on a project in Ghana that aims to improve farmers’ agricultural practices by adopting Information and Communication Technologies (ICT), giving them a more productive, stable and secure farm. Our research in the topic made me rephrase this and turn the question back from the ‘developing’ nation to our own ‘developed’ society – why are our industries growth-oriented while we struggle to put in place systems to meaningfully measure social impact? What can we learn from Ghana and other developing nations about ethics in our financial systems?

There were a number of things I found surprising, and challenged my notion of a healthy business.

If it’s not written down, it didn’t happen. Or did it?

A big difference I initially observed between smallholder farming businesses in Ghana and other Western businesses was the amount of written records. I’m familiar with systems that measure growth and profit by the dollar, requiring accurate bookkeeping as a cornerstone of financial success. Contrary to this, the farmers I met didn’t seem interested in having a bigger, more profitable farm. Their practices were certainly complex, involving multiple arrangements of debts, credits, bartering and contracts, but with very few written records. In all of our research, I only saw one quite high-level aggregation business with a single written ledger, and that only recorded less than half of the business’ transactions. Most people simply kept track of the current balance in their heads, without paying much attention to the bigger numbers and financials of the business over time – how much we sold or made, whether we would make a loss or profit.

There is an interesting and surprising reason for this: many farmers’ motivation for running the farm is not to generate profit, but for the wellbeing of their family or community. Although our Western businesses are accurate to the last cent, we don’t have a record for transactions of trust, community standing and satisfaction inspired by the work that we do. In Ghana, however, many farmers only run their farm for these things – money is a means to keep the family and community safe and comfortable, or to be able to afford school fees for the children, not for profit as an end goal itself. The idea of the pursuit of profit seems very unnatural to many farmers in Ghana; in fact, one farmer described it to me as ‘wicked.’ Realising this crucial difference made me question our initial goal for the project: how do we give people financial security in an industry that seems to self-limit its growth?


No written records, no bank loans, but personal money lending with social benefits

As a feedback effect of not keeping written accounts, farmers find applying for bank loans difficult. Moreover, very few of them have bank accounts, for a couple of reasons. One is the lack of trust of institutions outside of the local trust network, and another is because profits are almost always absorbed back into assets and general expenses immediately. Instead, Ghanaian farmers tend to negotiate money on a more personal basis. For example, small individual loans are passed around in the community, made with trust and obligation implications for the people involved. A buyer may loan to a farmer with the implication that come harvest time, the farmer will have an obligation to sell to the buyer exclusively, sharing the return on the success generated by the initial investment – basically a future contract or option, with a personal relationship attached.

The benefit of the human record of transactions is that each transaction is associated with a person, moving beyond a business exchange into a relationship. These relationships can be good or bad, involve camaraderie or implied debt, but are always more than a matter of money. The approval of the community and chief is important and affects varied aspects of life, such as community standing or personal reputation. Any transaction, therefore, adds a layer of social accountability. As a result, the system can quickly adapt to risk and gives non-monetary benefits of the farming ecosystem, such as drawing a community closer together. Ethics and wellbeing have become inseparable from profit and loss in a way that is completely alien to many Western accounting practices.

The system doesn’t support everyone

Of course, this system has its faults. One of the most obvious is its self-limiting nature: a farmer can only keep transactions with a few dozen people in his head at any given time, preventing businesses from growing beyond a certain size. With this factor, many people continue living below the poverty line.

Another limiting factor is the size of local markets. A crop that yields double may be futile if there aren’t twice as many buyers for the goods; a crop that fails affects the entire community. For many farmers, especially women, this makes for a difficult, wildly fluctuating day-by-day existence. A great deal of charity is required to keep people going, which again contributes to continuing poverty.

To increase the reach and sell to new markets, however, requires people to extend their immediate networks. Given the culture of trust and personal relationships, such a move is seen as highly risky to the people involved. Farmers resist the idea unless they know they can trust the buyer or moneylender they are dealing with, and that the transaction is ethically acceptable to their community and other trusted partners. The difficulty of building these relationships outside a small community contributes to Ghanaians’ distrust of the ICT program I was attempting to implement.


In Ghana’s farming there are lessons for the future model of ethical business

With a better understanding of the context, new questions began to arise. Even if literacy levels were lifted and training in business accounting became widespread, would Ghana’s current agricultural difficulties suddenly improve? Or would we find that people still stay within their local trust networks and don’t sell to anyone they don’t know, even if they can see a buyer in another region? If that’s the case, then simply increasing access to ICT won’t change the situation. People are unwilling to adopt different business practices, not because they’re uneducated, but because of their cultural beliefs and values.

Our project developed to not only focus on improving smallholder plights by broadening markets, but to also preserve the personal trust networks and ethics their businesses rely on. We have made some progress by introducing social media, which holds companies to account and makes transactions more transparent. However, there’s still a long way to go, because it’s a fickle system and doesn’t always match up with a Ghanaian farmer considerations for family first, overseen by a chief interested in community welfare.

However, in the process of introducing Western business values to Ghana, I’ve seen many ways in which education can flow the other way. We should learn to value social connections as equally important in our businesses as share price and profit, not just as a communications and media management exercise. From these farmers, I’ve learnt that GDP growth sometimes deserves less prioritisation than equality and social wellbeing.

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