DRAFT
Ghana Brochure 1
Review of Ongoing Agricultural Development Efforts
Introduction
Ghana’s recent development process is characterized by balanced growth at the aggregate economic level and the continued importance of agriculture as the backbone of the economy. In recent years agricultural growth has been more rapid than growth in the non-agricultural sectors, expanding by an average annual rate of 5.5 percent, compared to 5.2 percent for the economy as a whole. In terms of subsectors, crop production between 1995 and 2006 has expanded steadily. With the exception of sorghum, millet and cassava, in the period 2000-2006, output of most crops has increased at a faster rate than population growth. In terms of industrial crops, the production of tobacco has all but ceased and that of cotton and coffee has declined very significantly over the years while the production of sheanuts continues to increase. The cocoa sub-sector has experienced strong growth between 2003 and 2005 while the oil palm sub-sector has also been growing steadily. Growth rates for livestock have generally been low and in particular very poor in the case of cattle, . Poultry production in urban and peri-urban areas has grown significantly partly as a result of the growing demand by a rapidly increasing urban population. Fish production, , did not change significantly between 2000 and 2006.
Past agricultural growth has primarily been driven by external forces, weather conditions and land expansion, rather than increases in productivity. Agricultural production and productivity in Ghana is heavily reliant on rain-fed agriculture; there is a lack of good water management and soils are coarse with low water holding capacity and crop water stress during the growing season. The low level of agricultural productivity in Ghana is attributed to low soil fertility which is partly due to limited use of fertilizers. Improved seed use is also limited as is the application of agro-chemicals such as insecticides. On-farm production intensity is constrained by reliance on family labor in the absence of mechanized equipment or services. Poor access to inputs and financial services are root causes of the low adoption of modern inputs. Access problems are in turn linked to poor quality of rural road infrastructure. Inadequate storage infrastructure also limits market access and the incentive to adopt productivity enhancing technologies. Specific constraints in the livestock sub-sector are low performing breeds, poor feeding, high cost of feed for poultry; poor housing and husbandry management, competition from imports and poor post-production management. In the fisheries sub-sector major constraints are over-fishing of natural waters, an undeveloped value chain (e.g. inadequate supply systems for fingerlings and feed) and lack of skills in aquaculture. Agriculture growth is associated with rising income inequality and the concentration of poverty in lagging northern Ghana, where most of the poor depend on staples rather than export agriculture for their incomes. Sustaining and accelerating Ghana’s agricultural growth thus poses several challenges.
With a per capita income of US$454 in 2005, Ghana is bound to become the first African country to reach the Millennium Development Goal (MDG1) of halving poverty and hunger before the target year of 2015. There are, however, also indications of growing inequality between social groups, occupational groups and geographical areas in the country. In 2006, 28.5 percent of the population was considered poor. Poverty rates are much higher in the north, 62.7 percent compared to 19.7 percent in the rest of Ghana. Ghanaians consume substantial quantities of roots and tubers particularly cassava and cassava products as well as plantain. In the case of cereals, maize dominates, followed by sorghum and rice. The consumption of fish is almost four times that of meat and has been increasing steadily over the years. In 2003, about 30 percent of Ghanaian children were stunted, 7.1 percent wasted and 22 percent underweight. In the same year, as many as 83 percent of Ghanaian rural households and 56 percent of urban households did not consume adequate iodine and over 80 percent of children and about 48 percent of women were anemic. The three northern regions and Central Region continue to be areas of high malnutrition. Stunting and underweight values in particular are very high in these regions compared to the rest of the country.
Long-term economic development & agricultural development frameworks
Agriculture in the Vision 2020
In the Vision 2020, a major policy for agricultural production is the application of science and technology to increase productivity without damaging the environment. Export diversification through price competitiveness is also to be pursued. The common theme that runs through the policy guidelines of Vision 2020 is sustainable natural resource management, including land and forest resources, and fish stocks. An important aspect of the strategy for agricultural growth is the dependence of the sector on a program for rural development to achieve the higher growth rates. Rural development itself is to be stimulated through enhanced delivery of social and economic services and soft infrastructure such as public transport systems.
The Accelerated Agricultural Growth and Development Strategy (AAGDS)
The AAGDS launched in 2001 was designed as a framework for policies and programs in the agricultural sector to support Vision 2020. The goal of the AAGDS is to increase agricultural growth from 4 percent to 6 percent over the period, 2001-2010, in support of the broader goals of Vision 2020. The two areas of focus of the AAGDS are a) the promotion of agricultural intensification in high potential areas using small-scale irrigation and modern inputs. Intensification is to be informed by appropriate policy, research and dissemination of technologies to enhance adoption of improved methods of production and b) trade led policies and export diversification. Based on these general directions, the strategic areas of the AAGDS are: (i) promotion of selected products through improved access to markets, (ii) development and improved access to technology for sustainable natural resource management, (iii) improved access to agricultural financial services, (iv) improved rural infrastructure, and (v) enhanced human resource and institutional capacity.
The Ghana Poverty Reduction Strategy (2003-2005) and Growth and Poverty Reduction strategy (2006 – 2009)
The agriculture sector has been recognized in both PRS documents as key to rural development and poverty reduction. According to Ghana’s first PRSP prepared between 2002 and 2005, the agricultural growth rate was to increase from 4.1 percent in 2002 to 4.8 percent 2004. The medium term priority for the agriculture sector was to modernize the sector as an integral part of rural development. This implied creating the necessary environment to develop rural agribusiness enterprises (farming and value addition). In addition to actions to enhance research, extension, credit, market access and production infrastructure (such as irrigation and roads), agro-processing enterprises were to be established to enhance value addition. Farmer organizations were to be developed and supported to enhance their capacity to access and deliver services to members. The preparation of GPRSII (2006-2009) was guided by practical lessons and experiences drawn from the preparation and implementation of GPRSI. The second GPRS places emphasis on growth-inducing policies and programs for wealth creation and poverty reduction. The agriculture sector goals as specified in the GPRSII are an agricultural growth rate of 6-8 percent per annum over the next 4 years; crops and livestock leading the growth at an average annual growth rate of 6 percent; forestry and logging, and fisheries, growing at 5 percent per year and cocoa sub-sector remains robust in support of other sectors.
In the short-term, the strategy for agriculture-led growth is to promote export-led growth by diversifying the country’s agriculture from the traditional cocoa and timber to especially cereals and other cash crops, including mangoes, papaya, pineapples, cashew nuts and vegetables, and reverse the decline in Ghana’s fisheries. Intervention areas for modernizing agriculture as specified in the GPRSII are: reform of land acquisition and property rights, accelerating provision of irrigation infrastructure, enhancing access to credit and inputs for agriculture, promoting selective crop development, improving access to mechanized agriculture, increasing access to extension services, provision of infrastructure for aquaculture, restoration of degraded environment
The Food and Agriculture Sector Development Policy (FASDEP)
FASDEP was developed as the framework for the modernization of agriculture, a strategic objective of the first GPRS. The strategic thrusts under FASDEP were the same as those of AAGDS. The specific strategies under each of the five strategic areas mentioned above had common objectives of improving access to technology, inputs, finance, irrigation, and markets. FASDEPII has been revised to respond to shortcomings in FASDEPI and its strategies are aligned to the requirements of agriculture in GPRSII. The value chain approach to commodity development in the policy should ensure that constraints are addressed comprehensively. FASDEPII aims to achieve: (i) food security and emergency preparedness; (ii) improved growth in incomes and reduce income variability (iii) increased competitiveness and enhanced integration into domestic and international markets; (iv) sustainable management of land and environment; (v) science and technology applied to food and agriculture development; and (vi) enhanced institutional coordination
Investment programs under FASDEP/GPRS
Key underlying strategies of FASDEP are productivity improvements, value addition, adoption of good agricultural practices along commodity value chains to enhance profitability and competitiveness, mainstreaming sustainable land management practices, and promotion of demand-led research. The specific strategies under each of the five strategic areas in both the AAGDS and FASDEP l are given below:
Promotion of selected products through improved access to markets
Product development, market information, pilot processing plants, improved packaging and labeling, specialized hauling systems, licensed warehouse operators, national buffer stock, standardization, quality control, weights and measures, trade and investment promotion and commodity specialists.
Development and improved access to technology for sustainable natural resource management
Crops: (i) development of new varieties; multiplication of seed and planting material; (ii) post-harvest handling, improved storage facilities; (iii) improved fertilizer delivery; (iv) competitive grant scheme; (v) land preparation technology; (vi) crop protection, planting and irrigation water harvesting technologies
Livestock: (i) production of improved breeds; control of feed quality; (ii) control of animal diseases; dairy development
Fisheries: (i) production of fingerlings; (ii) improved storage and marketing
Improved access to agricultural financial services
Capital leasing, micro financing, inventory credit, export financing, establishment of agricultural development fund, strengthening of rural financial institutions
Improved rural infrastructure
Provision of irrigation facilities, establishment of land banks, provision of storage facilities, provision of fish landing sites, provision of hatcheries, rehabilitation of research laboratories, provision of access tracks and roads, supply and manufacture of equipment and machinery, rehabilitation of quarantine stations, water supply for processing, energy supply, water supply for livestock
Enhanced human resource and institutional capacity
Development of producer associations, development of agro-processing, development of trade associations, training community workers in issues of gender, health and the physically challenged, strengthening of frontline extension workers, strengthening capacity of MOFA, strengthening of research staff, strengthening of agricultural education institutions
Agricultural funding and technical institutions
The Medium Term Expenditure Framework guides all public sector budgeting and planning in Ghana. It is a framework which allows a three year rolling budget based on activities for implementing a sector’s strategic plan. One of the principles in the Maputo Declaration that Ghana is committed to achieving is the allocation of at least 10 percent of government expenditure to the agriculture sector. Several other interventions that support agriculture do occur outside the government departments directly responsible for the sector. Government expenditure on agriculture dropped from 12.2 percent in 1980 to 4.1 percent in 1990 when subsidies on agricultural inputs were completely phased out. Since the late 1990s, the share of government expenditure going through the Ministry of Food and Agriculture (MoFA) has been less than 2 percent; inclusion of expenditure on the cocoa sub-sector however raises this share considerably. The distribution of MoFA’s expenditure has historically been biased towards recurrent expenditure. However the share of development expenditure is growing, increasing from 30-35 percent in the period 1998-2000, to 46 percent in 2005-2006. The areas affected by low investment expenditure are irrigation infrastructure, land development, rural roads, and post-harvest infrastructure, the latter in partnership with the private sector.
Private agricultural sector funding
The Agricultural Development Bank (ADB)was established in 1965 and is the lead bank for agricultural financing. The share of ADB’s agricultural loans in its loans and advances portfolio as of 2000 was 65 percent, reaching 70 percent in 2005. The areas of financing are agricultural production, export financing, agro-processing and marketing and cocoa financing with more focus on production and marketing and very little on agro-processing. The ADB provided only about 28 percent of the total demand for credit in the agricultural sector up to the year 2006, suggesting an excess demand for credit in the sector, a situation that does not favor investment and growth of the sector.
Rural micro-finance institutions. TheRural Financial Services Project (RFSP) has resulted in the growth of rural banking in Ghana, especially in the south. Rural banking has been quite widespread and successful in the south. It is also gradually growing in the north. Many rural people save at and obtain loans from rural banks; many are also shareholders.
Parastatals and other public-sector institutions
The Ghana Cocoa Board (COCOBOD)is the oldest and biggest government parastatal in the country. It has been charged with the development of the cocoa, coffee, kola and sheanut industries. However because of the dominant importance of cocoa to the Ghanaian economy, its activities with respect to the other crops are limited.
Grains and Legumes Development Board (GLDB) exists to support research to come out with new improved crop varieties as well as the improvement of existing varieties through production and distribution of seed and planting materials to farmers.
Ghana Irrigation Development Authority (GIDA)is an institution under MoFA, responsible for irrigation development in the country.
Millennium Development Authority (MiDA)focuses on increasing the production and productivity of high value cash and staple food crops in three selected regions of Ghana. Interventions are aimed at the marketability and competitiveness of Ghana’s agricultural products in domestic, regional and international markets. The program has three projects: (i) development of agricultural productivity, (ii) transportation infrastructure development, and (iii) rural services development.
National Agricultural Research System (NARS) is comprised of the nine research institutes under the Council for Scientific and Industrial Research (CSIR), the Cocoa Research Institute, and the faculties and schools of agriculture, as well as the departments of botany, zoology and food sciences of the country’s universities. There are 29 agencies involved in agricultural research in Ghana, 15 of which are for higher-education. Most of the research is conducted at Ghana’s five main universities. CSIR undertakes several collaborative research projects with various centers of the Consultative Group on International Agricultural Research (CGIAR). In 2001, public spending on research as a proportion of agriculture GDP was 0.44 percent having increased from 0.21 percent in 1981. Despite this improvement, the 2001 ratio was only half the average of 0.85 percent for Sub-Saharan Africa. The Agricultural Services Sub-Sector Investment Program (AgSSIP), launched in June 2000 was to facilitate and support the achievement of this shift toward commercialization. A key component of AgSSIP is sustainable financing of research by restructuring and strengthening agricultural research and extension and improving farmer and other stakeholder participation in the governance and financing of agricultural research.
Producer organizations
Farmers’ associations:Promotion of farmer organizations has been a key strategy of government to facilitate access of farmers, especially smallholders, to services and inputs. A Farmer Based Organisation (FBO) Development Fund was created under AgSSIP to support this strategy and a pilot FBO development project was implemented in a number of districts. The goal is to establish a network of commodity or activity based FBOs from the community level to district, regional and national apex bodies. Various types of farmer associations, which aim at furthering their various collective interests, exist. Most of them are single crop and single animal associations. There are, however, a few that are more general: the Peasant Farmers’ Association of Ghana, National Farmers and Fishermen Award Winners’ Association of Ghana (AFFAWAG), Ghana National Association of Farmers and Fishermen (GNAFF) and others.
Produce Buying Agencies (PBAs) are typical marketing intermediaries that bulk produce from villages for sale to bigger marketing companies such as the Ghana Cocoa Board or for export. PBAs also sometimes provide inputs required by farmers. They also function at times as quality assurance agents and are important in the grading of produce. PBAs are widespread in the cocoa industry, some are owned by farmer associations.
Agricultural Marketing Companies:Private companies for agricultural produce marketing, some of which are being promoted by non-governmental organizations, are beginning to emerge. A good example is the Savannah Farmers’ Marketing Company Limited (SFMC) which markets sorghum, groundnuts, soybeans and sheanuts. SFMC works on the basis of a supply chain from farmers, who are scattered all over the three northern regions, to companies such as Guinness Ghana Breweries Ghana Ltd and others in and outside Ghana.
Relationship between international and national agriculture development frameworks (VISION 2020, GRPSII, FASDEPII AND CAADP)
The goal of the Comprehensive Africa Agricultural Development Programme (CAADP) and the Common ECOWAS Agricultural Policy (ECOWAP) is to serve as a framework for intervention in agricultural policies and development strategies in Africa and in West Africa, respectively. These frameworks are also intended to be integral parts of national efforts to promote agriculture sector growth and overall economic development in the countries. The overriding goal of ECOWAP/CAADP is to help African countries increase their economic growth through agriculture-based development. This goal is in close harmony with Ghana’s FASDEP and the GPRS. An important aspect of the GPRSII is that it seeks to make operational various international covenants, under which CAADP and the MDGs, of relevance to the poverty reduction objectives of the strategy and of which Ghana is signatory. The agricultural sector has been recognized in both GPRSI and GPRSII as key to rural development and to poverty reduction. FASDEPI was developed to support the implementation of GPRSI; its revision into FASDEPII responds to the ‘growth focus for poverty reduction’ paradigm of GPRSII. The Agriculture Sector Plan is the operational framework for FASDEPII. The interrelationships between all of the above frameworks are schematically presented in Figure 1.
Figure 1. Inter-Relationships between International and National Development Frameworks
 
 
Definitions and Descriptions
MDGs …………………………………..
CAADP (Comprehensive Africa Agriculture Development Programme):A long-term agricultural sector-specific framework, imbedded in but reaching beyond the two PRSPs
ECOWAP ……………………………………….
Vision 2020: A long-term, national-level strategic framework that is indicative in nature
GPRS (Ghana Poverty Reduction Strategy and Growth and Poverty Reduction Strategy): A medium-term, multisector, comprehensive framework, guided by the Vision 2020, with a current time horizon to 2009
FASDEP (The Food and Agriculture Sector Development Policy): A framework for modernizing the agriculture sector and a catalyst for rural transformation, in line with the goals set for the sector in the PRS
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