Provide advice to the Minister of Agriculture of Ghana on what should be priority investments in his presentation of the five-year agricultural plan to the Parliament?
(Note: This policy paper was written in the fourth quarter of 2017 as part of a sustainable development course)
TO: Owusu Afriyie Akoto. Ministry of Food and Agriculture, Ghana
FROM: Dorcas Omowole, Master of Global Affairs, University of Notre Dame
DATE: November 6, 2018
RE: Priority investments for Ghana’s five-year Agricultural plan
Problem definition
The Ministry of Food and Agriculture (MOFA) Ghana has invested in numerous programmes and policy interventions as the Ministry gears its efforts towards Ghana’s goal of becoming a developed country between 2020 and 2029 and a newly industrialized country between 2030 and 2039 by integrating science and technology into governmental programmes. The government of Ghana and the Ministry of Food and Agriculture (MOFA) plans and activities in this regard have been commendable — for example, extreme poverty reduced by 50% between 1991 and 2006. (FAO, 2015)
Agriculture is a key sector of Ghana’s economy, accounting for 23 percent of the national GDP in 2012. Although the sector is growing significantly and has benefitted from high international prices for its main exports. Agriculture in Ghana remains largely rain-fed and subsistence-based, with rudimentary technology used to produce 80 percent of total output. For a sector that employs almost 50% of the national labor force, there is room for the sector to be more productive and by extension, reduce the numbers of Ghanaian’s population that live below the poverty line of US$ 1.25/day. (FAO, 2015)
Background analysis to data collection
The greatest challenges confronting Ghana’s agricultural productivity are related to land rights, insurance and knowledge transfer.
· Land rights: Secure land rights are enjoyed by individuals with powerful positions in the local political hierarchy. This “ownership right” empowers these individuals to invest more in land fertility, resulting into higher outputs. However, most farmers do not have these rights, farm lands can be taken away from them during fallow periods. Therefore, there is little motivation to invest in the fertility of the farmland — or any other productivity investments. (Goldstein and Udry, 2008)
· Credit market and Risk mitigation: Access to credit and availability of insurance, especially related to rainfall shocks, would motivate farmers to invest in activities with high expected profits or increase the scale of their farming activities. Credit facilities would be utilized in obtaining fertilizers and other farm inputs. Mitigating risks from rainfall lead to higher yields. (Karlan et al, 2012)
· Training and knowledge transfer: Effective means of communicating information and methods that increase productivity with farmers through extension workers and farmer ambassadors should be explored. For certain farm produce, especially pineapples — which is a leading export product for Ghana, farmers adjust their inputs to align with those of other farmers who had higher outputs in previous farming periods. (Conley and Udry, 2010)
The United Nations Food and Agriculture Organization’s (FAO) Monitoring and Analysing Food and Agricultural Policies (MAFAP) programme in Ghana for the period 2006–2012 revealed that while expenditures on fertilizer subsidies increased substantially, expenditure allocated to agricultural research and knowledge-transfer activities (such as training, technical assistance and extension) decreased sharply. (FAO, 2015)
Summary findings
Ghana’s programmatic and policy interventions would benefit from management of structural issues related to land ownership and a focus on complementary factors that impact productivity of farm inputs, such as risk mitigation and access to training.
Presentation of policy options
Treat symptoms: Investing in additional inputs such as fertilizers or trying to force them on farmers would only have positive impact in the short term, if any, as farmers reverse to their prior practices. This is because non-usage of additional inputs stem from other problems that needs to be addressed first.
Treat root causes: For any programmatic and/or policy intervention to yield highest dividends for the farmers and the Ghanaian people, challenges related to land rights, access to insurance and knowledge transfer for farmers must be given priority.
Recommendations
Land security: Give farmers, especially smallholder farmers, legal and longer-term access to land by instituting needed land rights amendments that makes this possible
Agricultural insurance schemes: In addition to access to credit, agricultural insurance schemes especially against vagaries of weather should be provided to farmers. This insurance can be provided through already existing microcredit networks.
Access to agricultural inputs: Fertilizer, fertilizer subsidies, improved seedlings and other agricultural inputs provided by the government or other NGO’s should be distributed directly to small scale farmers.
Agricultural productivity: Increased investment in capacity training for farmers either via extension workers or co-farmers. These trainings will focus on optimal use of inputs for increased farm outputs, health of farmers and the environment.
References
Conley G. T. and Udry R. C. Learning about a New Technology: Pineapple in Ghana. American Economic Review, 2010.
Food and Agriculture Organization (FAO) of the United Nations. Socio-economic context and role of agriculture: Country fact sheet on food and agriculture policy trends FAPDA — Food and Agriculture Policy Decision Analysis. March 2015
Goldstein M. and Udry C. The Profits of Power: Land Rights and Agricultural Investment in Ghana. University of Chicago Press. December, 2008.
Karlan D., Osei D. R., Osei-Akoto I. Udry C. Agricultural Decisions after relaxing credit and risk constraints. National Bureau of Economic Research Working paper series. October 2012.