Missing Opportunity for Economic Take-off

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....with Agriculture as Backbone

Discussions in this article lead to the conclusion that policies executed by the New Patriotic Party (NPP) government of Ghana had not helped modernizing the agriculture sector in harmony with development of rural areas of the country during the first two years of President John Agyekum Kufuor?s administration.

Agriculture and other forest products, whether for consumption or as commodities for exchange, have predominated productive capacity of Ghana?s political-economy since its formation. In the economic sphere, agriculture employs over 60% of the workforce and generates 0ver 60% of national revenue. Yet, the evidence has been that Ghanaian farmers have been among the most deprived citizens, relegated to a life of want and penury in rural areas of the country.

Given the centrality of agriculture to conditions of Ghana?s political-economy, leaders of successive governments had tended to base projection of their vision for the country on food crops and cocoa production. What separated the Kufuor administration?s idea for agriculture development in Ghana from that of previous ones had been its stated intention to link ?modernization? of the farming industry to development of rural areas of the country.

Linking modernization of the farming industry to rural development was just what poor rural dwellers in Ghana had been waiting for given the desolate conditions in which some of them live and work.

In view of the uniqueness of NPP government?s stated intention for agriculture in Ghana, this article examines briefly the extent to which public policy actions contributed towards making the linkage between modernized agriculture and rural development a reality in a ?free enterprise? liberal democracy where the private sector had been designated the engine for national development.

In the NPP 2000 Manifesto (2.2.12.4), the party stated three ?policy objectives in this sector? as following: (1). ?Transformation of agriculture into high productive ventures using high-yielding planting materials and other inputs; and disease-resistant and high-yielding stocks for breeding. (2). ?Making agriculture profitable to sustain rural economic activity as a instrument against poverty alleviation, and (3). ?Retention of the youth in a more economically vibrant rural setting to stem rural-urban depopulation.?

The Manifesto lists a number of ambitious actions the NPP intended to execute towards fulfilling the stated policy objectives for the agriculture sector of Ghana. One of the exciting and forward-looking actions NPP promised was ?revamping the highly neglected feeder road network through decentralizing the feeder roads development program.? (Italics for emphasis).

To emphasize the relative importance of feeder roads for agricultural production in Ghana, the Manifesto states the following: ?The establishment of constituency-based small-scale private companies dedicated to the rehabilitation, maintenance and construction of feeder roads will be encouraged. Loans from the Business Assistance Program of NPP government will be forthcoming for the purchase of their basic equipment. And tax incentives will also be offered to attract qualified persons to the rural areas to undertake the contract works.?

The relevant question here is about whether policies executed by the Kufuor administration during its first two years in office facilitated modernizing agricultural production with positive developmental effects on life in rural Ghana. One gets the impression that had NPP?s stated policy objectives for agriculture materialized it would have had the promise of economic and social development take-off in Ghana.

The NPP recognized that ?the agriculture sector constitutes the hob around which the economy of Ghana revolves.? The NPP Manifesto states, that ?it [agriculture] contributes 40% of the [Gross Domestic Product] GDP, employs about 65% of the labor force, furnishes 40% of our foreign exchange earnings and provides generously towards our food security. Its five sub-sectors, (i.e. viz. Crops, Livestock, Fisheries, Cocoa and Forestry) contribute 63%, 5%, 5%, 16% and 11% of the agricultural GDP respectively.?

In spite of the significant contribution of agricultural production to the economy of Ghana, the NPP 2000 Manifesto (2.2.12.2) notes, ?sadly, Ghana cannot feed itself. It is a net importer of food, with imports of 1.0 trillion Cedis in 1997, 1.3 trillion in 1998 and 1.5 trillion in 1999.?

The Manifesto pointed out that Ghana has been spending about 7.3% of its total GDP on importing food. It stated, ?for example, Ghana imports rice and sugar in large quantities, these are food commodities which Ghana used to produce and can still grow, if our farmers are given the support and encouragement.? (Italics for emphasis).

The Manifesto recognized that ?the rate of population growth in Ghana of 3.1 to 3.2% per annum exceeds the rate of growth of food production.?

NPP Minister of Food and Agriculture, Mr. Courage Quashigah, early in his tenure reinforced a World Bank view about Ghana that ?the agriculture sector bears the singular responsibility of bringing respite to the economy and the populace.? He observed also that there were ?established missing links between production and distribution in Ghana?s agriculture sector? that needed to be connected and strengthened as the antidote to food insecurity and high cost of living in the country. Certainly, those were encouraging sentiments, especially at a period when Ghana could takeoff boldly into the global economy with agriculture as the backbone.

Six months into the Kufuor administration, sections of the Ghanaian press started to write about rising food prices, an indicator of the health of the economy for most Ghanaians. The ministry of food and agriculture denied the food shortage stories in the Ghanaian press. The ministry?s spokesperson ?explained that the apparent shortage of food on the market and its resultant high prices is the result of the stockpile in the northern part of the country?.?

While the press and Ministry of Agriculture (MoFA) officials debated whether there was crisis of food shortage, the Ghanaian press was full of persistent news of stockpiling of food at points of production without local market access.

For several months in 2001, the Ghanaian press was full of disturbing stories of complaints by producers of such items as tomato, coffee, groundnuts and banana, with respect to inability to market their products. Some of the farmers feared that the glut of food at points of production was not only discouraging to new and potential farmers but also bred poverty.

While farmers stockpiled the foodstuffs they had produced, problems associated with Ghana?s food security and the attendant rise in prices in the market raged on, as usual. Therefore, there has been no wonder that ?Ghanaians spend about 51 per cent of their income on food.? As the price of food kept rising, ?similarly, the prices of agricultural inputs escalated, with that of a hoe going up by 71.5 per cent and cutlass by 133.8 per cent.? Consistent with its subsistence nature, the hoe and cutlass have been the primary tools for food production in Ghana thereby making the agricultural process labor-intensive.

Thus far, it is defensible to deduce that inadequate road network in major food production areas, compounded with lack of sufficient working food storage facilities, absence of food processing plants and preservation methods, accounted for periodic food glut and insecurity in Ghana. As a result, ?about 20 per cent of Ghana?s 20 million metric tons of food produced is lost through poor preservation practices, distribution and marketing practices. ?In the Afram Plains area, where about one million metric tons of food is produced the road network is extremely bad. Therefore, about 40 per cent of the food is lost through spoilage,? a news story indicated in July 2001.

Ghana has been importing about $100 million of rice annually, as agriculturally well endowed as it is. Therefore it made a lot of sense when one month into the Kufuor administration, the chief director of the ministry of food and agriculture told Ghanaians about the desire to reduce rice importation by 50 percent by the end of 2001.

Rice imported to Ghana supplemented local production of about 135,000 metric tons average per year. However, the Ghanaian palate prefers imported rice to that produced locally. According to the chief director of MoFA, the preference for imported rice has been because of the low quality of locally produced variety ?due to poor quality seeds and inadequate water management expertise for rice production,? according to a news story (?Ministry to Reduce Rice Import by 50%?; ghanaweb.com, General News of Wednesday 07, February 2001).

To augment rice production in Ghana, the chief director said also, ?recent attention is being focused on the development of more than one million hectares of inland valleys found scattered across the country compared to current 130,000 hectares currently under cultivation.?

To encourage local rice production, the Kufuor administration sweetened its promise to Ghanaians and rice farmers, four months after assuming office. Advisor to the new Minister of Food and Agriculture announced a government program for guaranteed price and purchase of all locally produced rice. In addition, government was to sponsor the private sector to provide small machines for rice milling around the country.

However, eight months after the government?s announcement of an ?all-inclusive marketing strategy? for locally produced rice, a news story reported large quantity of rice stockpiled at the Okyereko Irrigation Project in Ghana?s Eastern Region. In the same news story, a farmer complained about ?high interest rates and the mode of payment of loans? that were scaring people from growing crops that took relatively long to mature.

On the positive side, a press report in April 2002 indicated, ?the Ministry of Food and Agriculture has introduced a new variety of rice onto the Ghanaian market, which it says will end or at least drastically reduce the country?s dependence on imported rice. The rice known as ?Afife? is being produced by a consortium of Ghanaian enterprises including farming co-operatives, licensed warehouse operators and marketers.? However, the good news remained so, only until the new variety of rice ?comparable to other imported rice? appeared at the market place, as opposed to stockpiled at production locations.

Sometime in the early 1970s, research at the defunct Prices and Incomes Board of Ghana found that doubling food production in Ghana could reduce the country?s rate of inflation by half. Over 30 years later, NPP Minister of Finance, Yaw Osafo-Maafo, bolstered the near accuracy of the Prices and Incomes Board finding. Osafo-Maafo reportedly, told parliament in February 2002, ?the relative stability of the Cedi [the local currency] and the good harvests of food crops contributed immensely to the fall in inflation from 41.9 per cent at the end of March to 21.3 per cent at the end of last year [2001].? (Italics for emphasis). Osafo-Maafo disclosed the indicators above during presentation of 2002 Ghana government financial statement.

Given the fact that doubling food production could halve the rate of inflation, responsible governments of Ghana ought to have been sufficiently encouraged to commit maximum resources into making the agricultural sector work more efficiently. Yet, in over two years of Kufuor?s administration, troubling news of food stockpile at points of production continued to persist in Ghana.

In spite of the cycle of rural road disrepair and poverty of millions of laboring farmers and farm hands, senior officials of the Kufuor administration had been persistent with making announcements of the government?s idealistic intent to modernize agriculture in tandem with development of rural areas of Ghana. When 20% of food produced by Ghanaian farmers go wasted, resulting in poverty and life of want, it leaves expectations and aspirations for upward social mobility of the rural-dwelling youth in limbo. Accordingly, it is fair to conclude that the NPP government could not have executed successfully the three objectives it set for enhancing Ghana?s agriculture in tandem with rural development when farm products did not reach markets.