Agriculture in Ghana
Encyclopedia
Agriculture is Ghana
's most important economic sector, employing more than half the population on a formal and informal basis and accounting for almost half of GDP and export earnings. The country produces a variety of crops in various climatic zones which range from dry savanna to wet forest and which run in eastwest bands across the country. Agricultural crops, including yams, grains, cocoa, oil palms, kola nuts, and timber, form the base of Ghana's economy
.
attempted to use agricultural wealth as a springboard for the country's overall economic development
, Ghanaian agricultural output has consistently fallen since the 1960s. Beginning with the drop in commodity
prices in the late 1960s, farmers have been faced with fewer incentives to produce as well as with a general deterioration of necessary infrastructure and services. Farmers have also had to deal with increasingly expensive inputs, such as fertilizer, because of overvaluation of the cedi. Food production has fallen as well, with a decline in the food self-sufficiency ratio from 83 percent in 1961-66 to 71 percent in 1978-80, coupled with a fourfold increase in food imports in the decade prior to 1982. By 1983, when drought hit the region, food shortages were widespread, and export crop production reached an all-time low.
When the Rawlings
government initiated the first phase of the Economic Recovery Program (ERP) in 1984, agriculture was identified as the economic sector that could rescue Ghana from financial ruin. Accordingly, since that time, the government has invested significant funds in the rehabilitation of agriculture. Primarily through the use of loans and grants, the government has directed capital toward repairing and improving the transportation and distribution infrastructure serving export crops. In addition, specific projects aimed at increasing cocoa yields and at developing the timber industry have been initiated. Except for specific development programs, however, the government has tried to allow the free market
to promote higher producer prices and to increase efficiency.
Although the government was criticized for focusing on exports rather than on food crops under the ERP, by the early 1990s the Provisional National Defence Council
had begun to address the need to increase local production of food. In early 1991, the government announced that one goal of the Medium Term Agricultural Development Program 1991-2000 was to attain food self-sufficiency and security by the year 2000. To this end, the government sought to improve extension services for farmers and to improve crop-disease research. Despite the statements concerning the importance of food crops, however, the plan was still heavily oriented toward market production, improvement of Ghana's balance-of-payments position, and provision of materials for local industrial production. Furthermore, following World Bank
guidelines, the government planned to rely more heavily on the private sector for needed services and to reduce the role of the public sector, a clear disadvantage for subsistence producers. In particular, industrial tree crops such as cocoa, coffee
, and oil palm
seedlings were singled out for assistance. Clearly, agricultural sectors that could not produce foreign exchange earnings were assigned a lower priority under the ERP.
The government attempted to reduce its role in marketing and assistance to farmers in several ways. In particular, the Cocoa Marketing Board steadily relinquished its powers over pricing and marketing. The government, furthermore, established a new farmers' organization, the Ghana National Association of Farmers and Fishermen, in early 1991 to replace the Ghana Federation of Agricultural Cooperatives. The new organization was to be funded by the farmers themselves to operate as a cooperative venture at the district, regional, and national levels. Although the government argued that it did not want to be accused of manipulating farmers, the lack of government financial support again put subsistence producers at a disadvantage.
, Brong-Ahafo Region
, Central Region
, Eastern Region
, Western Region
, and Volta Region
--where rainfall is 1,000-1,500 millimeters per year. The crop year begins in October, when purchases of the main crop begin, while the smaller mid-crop cycle starts in July. All cocoa, except that which is smuggled out of the country, is sold at fixed prices to the Cocoa Marketing Board. Although most cocoa production is carried out by peasant farmers on plots of less than 3 hectares, a small number of farmers appear to dominate the trade. Indeed, some studies show that about one-fourth of all cocoa farmers receive just over half of total cocoa income.
In 1979 the government initiated reform of the cocoa sector, focusing on the government's role in controlling the industry through the Cocoa Marketing Board. The board was dissolved and reconstituted as the Ghana Cocoa Board
(Cocobod). In 1984 it underwent further institutional reform aimed at subjecting the cocoa sector to market forces
. Cocobod's role was reduced, and 40 percent of its staff, or at least 35,000 employees, were dismissed. Furthermore, the government shifted responsibility for crop transport to the private sector. Subsidies for production inputs (fertilizers, insecticides, fungicides, and equipment) were removed, and there was a measure of privatization
of the processing sector through at least one joint venture. In addition, a new payment system known as the Akuafo Check System was introduced in 1982 at the point of purchase of dried beans. Formerly, produce buying clerks had often held back cash payments, abused funds, and paid farmer with false checks. Under the Akuafo system, a farmer was given a check signed by the produce clerk and the treasurer that he could cash at a bank of his choice. Plantation divestiture proceeded slowly, however, with only seven of fifty-two plantations sold by the end of 1990. Although Ghana was the world's largest cocoa producer in the early 1960s, by the early 1980s Ghanaian production had dwindled almost to the point of insignificance. The drop from an average of more than 450,000 tons per year to a low of 159,000 tons in 1983-84 has been attributed to aging trees, widespread disease, bad weather, and low producer prices. In addition, bush fires in 1983 destroyed some 60,000 hectares of cocoa farms, so that the 1983-84 crop was barely 28 percent of the 557,000 tons recorded in 1964-65. Output then recovered to 228,000 tons in 1986-87. Revised figures show that production amounted to 301,000 tons in 1988-89, 293,000 tons in 1990-91, and 305,000 tons in 1992-93. After declining to 255,000 tons in 1993-94, the crop was projected to return to the 300,000 ton range in 1994-95.
In the early 1990s, Cocobod continued to liberalize and to privatize cocoa marketing. The board raised prices to producers and introduced a new system providing greater incentives for private traders. In particular, Cocobod agreed to pay traders a minimum producer price as well as an additional fee to cover the buyers' operating and transportation costs and to provide some profit. Cocobod still handled overseas shipment and export of cocoa to ensure quality control.
In addition to instituting marketing reforms, the government also attempted to restructure cocoa production. In 1983 farmers were provided with seedlings to replace trees lost in the drought and trees more than thirty years old (about one-fourth of the total number of trees in 1984). Until the early 1990s, an estimated 40 hectares continued to be added to the total area of 800,000 hectares under cocoa production each year. In addition, a major program to upgrade existing roads and to construct 3,000 kilometers of new feeder roads was launched to ease the transportation and sale of cocoa from some of the more neglected but very fertile growing areas on the border with Côte d'Ivoire
. Furthermore, the government tried to increase Ghana's productivity from 300 kilograms per hectare to compete with Southeast Asian productivity of almost 1,000 kilograms per hectare. New emphasis was placed on extension services, drought and disease research, and the use of fertilizers and insecticides. The results of these measures were to be seem in rising cocoa production in the early 1990s.
, and new hybrid varieties need over five years to come into production, and a further 10 to 15 years for the tree to reach its full bearing potential. Yet the reasons for this huge production increase are varied and in fact Ghana's cocoa yields per hectare are still low by international standards. Researchers at the Overseas Development Institute
identify the following as particularly important:
Yet this studied suggests that the most important factors in the increased production are:
This study suggests that Ghana's cocoa farmers are not making the best use technological innovations in their production and instead their increased production is not sustainable. Bringing new land under cultivation is risky, as much of the land was previously forest and after a short period and without adequate attention this land may be exhausted. Intensive use of labour has led to high increases in the cost of labour and may impact profitability and high rainfall is only periodic.
's experimentation with privatisation has created a hybrid system whereby despite all exports being controlled by the state, there are now around 25 private companies buying the crop in all the areas of the country where it is grown. After 14 years, the successes and failures of this hybrid system has been the subject of a study by researchers at the Overseas Development Institute
. Competition
was clearly found to have increased production levels throughout the country, yet access to credit remained one of the most important factor determining the level of competition and farmers rarely made the most of all the available options to sell their crop (often they only made use of one). Their choice was based on the ability of a company to pay promptly in cash and thus there are only 5 major players on the market: PBC (formerly state owned), Kuapa Kokoo
(a hugely successful farmers’ based cooperative working on Fair Trade
principle), Adwumapa (a Ghanaian buying company), Olam and Armajaro
(both foreign-owned companies, from Singapore and the UK respectively). Another key determining factor is the distance of the plantation from the main market, as the more remote farms more often find it easier to sell to the formally state owned PBC.
This hybrid scheme benefits a variety of players:
Researchers at the ODI
therefore suggest that liberalisation has been good for producers by:
Yet the question remains for policy-makers as to the benefits of the state controlling an export monopoly and its strong presence of the public sector in the internal market and whether there should be even more liberalisation and whether it is providing the right incentives for producers to develop better (and sustainable) farming practices.
, rubber
, sugar cane, tobacco
, and kenaf
, the latter used in the production of fiber bags. None is of strategic economic importance, and all, apart from oil palms, have suffered as a result of the country's economic difficulties. Despite claims that such crops could assist local industrialization efforts, the government has not focused the same attention on this sector as on export crops. For example, sugar cane output has diminished with the closure of the country's two sugar mills, which produced 237,000 tons per year in 1974-76, but only 110,000 tons in 1989.
The government has actually encouraged the export rather than the local processing of rubber, rehabilitating more than 3,000 hectares of plantations specifically for export production rather than revitalizing the local Bonsa Tire Company, which could produce only 400 tires per day in 1988 despite its installed capacity for 1,500 per day.
By the 1990s, the tobacco sector was expanding and moving toward higher export production. Ghana's dark-fired leaf probably grows too fast and requires too rich a soil to compete effectively with rival crops, but the potential for flue-cured and Burley varieties is good. Pricing difficulties had reduced tobacco production from 3,400 tons in the early 1970s to an estimated 1,433 tons in 1989. Output began to improve in 1990, reaching 2,080 tons. In 2006-2007 BAT (British America Tobacco) shut down their Torikawa plant amid a social movement against tobacco smoking which resulted from high taxes caused by heavy tobacco smuggling.
The Leaf Development Company was established in 1988 to produce tobacco leaf for the local market and to lay the basis for a future export industry. In 1991, the company's first commercial crop amounted to 300 tons of flue-cured, 50 tons of Burley, and 50 tons of dark-fired tobacco (all green leaf weights), of which 250 tons were exported, earning US$380,000. In 1991 Rothmans, the British tobacco company, acquired a 49.5 percent stake in the company and took over management of the Meridian Tobacco Company in partnership with the state-owned Social Security and National Insurance Trust. Another firm, the Pioneer Tobacco Company, announced a 92 percent increase in post-tax profits of more than ¢1 billion for 1991. The company declared dividends worth ¢360 million, double the amount paid out in 1990.
Cotton production expanded rapidly in the early and mid-1970s, reaching 24,000 tons in 1977, but it fell back to one-third of this figure in 1989. Since the reorganization of the Ghana Cotton Development Board into the Ghana Cotton Company, cotton production has steadily increased from 4 percent of the country's national requirement to 50 percent in 1990. Between 1986 and 1989, Ghana saved US$6 million through local lint cotton production. The company expected that between 1991 and 1995, about 20,000 hectares of land would be put under cotton cultivation, enabling Ghana to produce 95 percent of the national requirement.
Those were various reasons for this poor performance, including growing urbanization and a shift in consumer preference from starchy home-grown staples to rice and corn. However, farmers also suffered from shortages of production inputs, difficulties in transporting produce to market, and competition from imported foods that were underpriced because of the vastly overvalued cedi. Weather also played a major part, particularly in 1983, when drought cut cereal production from 518,000 tons in 1982 to only 450,000 tons at a time when an extra million people had to be fed after the expulsion of Ghanaians from Nigeria. Food imports in 1982-83 amounted to 115,000 tons (40 percent as food aid), with the 1983-84 shortfall estimated at 370,000 tons (of which food aid commitments covered 91,000 tons).
There was a spectacular improvement beginning in 1984, mainly because of recovery from the prior year's drought. By 1988 the agricultural sector had vastly expanded, with food crops responsible for the bulk of the increase. Drought conditions returned in 1990, bringing massive falls in the production of all food crops apart from rice, but better weather and improved production brought prices down in 1991.
In August 1990, the government moved to liberalize the agricultural sector, announcing the end of minimum crop prices. The measure's impact was difficult to gauge because higher production meant more food was available at better prices anyway. The government's medium-term plan, outlined in 1990, sought to raise average crop yields and to increase food security, with special attention to improved producer incentives and storage facilities.
Livestock production is severely limited by the incidence of tsetse fly in Ghana's forested regions and by poor grazing vegetation elsewhere. It is of major importance only in the relatively arid north and has not been earmarked for special treatment in Ghana's recovery program. In 1989 there were an estimated 1.2 million cattle, 2.2 million sheep, 2 million goats, 550,000 pigs, and 8 million chickens in Ghana.
currently the contribution of agriculture to gdp is 37.3%
Ghana
Ghana , officially the Republic of Ghana, is a country located in West Africa. It is bordered by Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the Gulf of Guinea to the south...
's most important economic sector, employing more than half the population on a formal and informal basis and accounting for almost half of GDP and export earnings. The country produces a variety of crops in various climatic zones which range from dry savanna to wet forest and which run in eastwest bands across the country. Agricultural crops, including yams, grains, cocoa, oil palms, kola nuts, and timber, form the base of Ghana's economy
Economy of Ghana
The economy of Ghana, West Africa, has a diverse and rich resource base, and as such, has one of the highest GDP per capita in Africa. Ghana remains somewhat dependent on international financial and technical assistance as well as the activities of the extensive Ghanaian diaspora. Gold, timber,...
.
History
The first president of Ghana, Kwame NkrumahKwame Nkrumah
Kwame Nkrumah was the leader of Ghana and its predecessor state, the Gold Coast, from 1952 to 1966. Overseeing the nation's independence from British colonial rule in 1957, Nkrumah was the first President of Ghana and the first Prime Minister of Ghana...
attempted to use agricultural wealth as a springboard for the country's overall economic development
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...
, Ghanaian agricultural output has consistently fallen since the 1960s. Beginning with the drop in commodity
Commodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....
prices in the late 1960s, farmers have been faced with fewer incentives to produce as well as with a general deterioration of necessary infrastructure and services. Farmers have also had to deal with increasingly expensive inputs, such as fertilizer, because of overvaluation of the cedi. Food production has fallen as well, with a decline in the food self-sufficiency ratio from 83 percent in 1961-66 to 71 percent in 1978-80, coupled with a fourfold increase in food imports in the decade prior to 1982. By 1983, when drought hit the region, food shortages were widespread, and export crop production reached an all-time low.
When the Rawlings
Jerry Rawlings
Jerry John Rawlings is a former leader of the Republic of Ghana and now the African Union envoy to Somalia. Rawlings ruled Ghana as a military dictator in 1979 and from 1981 to 1992 and then as the first elected president of the Fourth Republic from 1993 to 2001...
government initiated the first phase of the Economic Recovery Program (ERP) in 1984, agriculture was identified as the economic sector that could rescue Ghana from financial ruin. Accordingly, since that time, the government has invested significant funds in the rehabilitation of agriculture. Primarily through the use of loans and grants, the government has directed capital toward repairing and improving the transportation and distribution infrastructure serving export crops. In addition, specific projects aimed at increasing cocoa yields and at developing the timber industry have been initiated. Except for specific development programs, however, the government has tried to allow the free market
Free market
A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...
to promote higher producer prices and to increase efficiency.
Although the government was criticized for focusing on exports rather than on food crops under the ERP, by the early 1990s the Provisional National Defence Council
Provisional National Defence Council
The Provisional National Defence Council was the name of the Ghanaian government after the People's National Party's elected government was overthrown by Jerry Rawlings, the former head of the Armed Forces Revolutionary Council. This was on December 31, 1981. It remained in power until January 7,...
had begun to address the need to increase local production of food. In early 1991, the government announced that one goal of the Medium Term Agricultural Development Program 1991-2000 was to attain food self-sufficiency and security by the year 2000. To this end, the government sought to improve extension services for farmers and to improve crop-disease research. Despite the statements concerning the importance of food crops, however, the plan was still heavily oriented toward market production, improvement of Ghana's balance-of-payments position, and provision of materials for local industrial production. Furthermore, following World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
guidelines, the government planned to rely more heavily on the private sector for needed services and to reduce the role of the public sector, a clear disadvantage for subsistence producers. In particular, industrial tree crops such as cocoa, coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
, and oil palm
Oil palm
The oil palms comprise two species of the Arecaceae, or palm family. They are used in commercial agriculture in the production of palm oil. The African Oil Palm Elaeis guineensis is native to West Africa, occurring between Angola and Gambia, while the American Oil Palm Elaeis oleifera is native to...
seedlings were singled out for assistance. Clearly, agricultural sectors that could not produce foreign exchange earnings were assigned a lower priority under the ERP.
The government attempted to reduce its role in marketing and assistance to farmers in several ways. In particular, the Cocoa Marketing Board steadily relinquished its powers over pricing and marketing. The government, furthermore, established a new farmers' organization, the Ghana National Association of Farmers and Fishermen, in early 1991 to replace the Ghana Federation of Agricultural Cooperatives. The new organization was to be funded by the farmers themselves to operate as a cooperative venture at the district, regional, and national levels. Although the government argued that it did not want to be accused of manipulating farmers, the lack of government financial support again put subsistence producers at a disadvantage.
Cocoa
Cocoa production occurs in the forested areas of the country-- Ashanti RegionAshanti Region
The Ashanti Region is the third largest of 10 administrative regions in Ghana, occupying a total land surface of 24389 square kilometers or 10.2 per cent of the total land area of Ghana. In terms of population, however, it is the most populated region with a population of 3,612,950 in 2000,...
, Brong-Ahafo Region
Brong-Ahafo Region
The Brong-Ahafo Region is located in mid-western Ghana, between the Ashanti Region and the Northern Region. Its capital is Sunyani.This region was created in 1958. It contains many cultural and wildlife attractions, but it is less known to tourists than the Ashanti, Northern, Central, or Greater...
, Central Region
Central Region (Ghana)
The Central Region is one of Ghana's ten administrative regions. It is bordered by the Ashanti and Eastern regions to the north, Western region to the west, Greater Accra region to the east, and to the south by the Atlantic Ocean.-Districts:...
, Eastern Region
Eastern Region (Ghana)
The Eastern Region is one of Ghana's ten administrative regions. It covers an area of 19,323 square kilometres, which is about 8.1% of Ghana's total land area. The region is divided into administrative districts. The total number of districts were increased from 17 districts to 21...
, Western Region
Western Region (Ghana)
The Western Region of Ghana, reaching from the Côte d'Ivoire border in the west to the Central Region in the east, includes the large twin city of Sekondi-Takoradi on the coast, coastal Axim, and a hilly inland area including Elubo. It includes Ghana's southernmost location, Cape Three Points,...
, and Volta Region
Volta Region
Volta Region is one of Ghana's ten administrative regions. It is to the east of Lake Volta. Its capital is Ho.-List of districts:The region has 18 districts consisting of 3 municipal and 15 ordinary districts:-Background:...
--where rainfall is 1,000-1,500 millimeters per year. The crop year begins in October, when purchases of the main crop begin, while the smaller mid-crop cycle starts in July. All cocoa, except that which is smuggled out of the country, is sold at fixed prices to the Cocoa Marketing Board. Although most cocoa production is carried out by peasant farmers on plots of less than 3 hectares, a small number of farmers appear to dominate the trade. Indeed, some studies show that about one-fourth of all cocoa farmers receive just over half of total cocoa income.
In 1979 the government initiated reform of the cocoa sector, focusing on the government's role in controlling the industry through the Cocoa Marketing Board. The board was dissolved and reconstituted as the Ghana Cocoa Board
Ghana Cocoa Board
The Ghana Cocoa Board is a Ghanaian government-controlled institution that fixes the buying price for cocoa in Ghana, the world's second largest producer of the commodity. The price-fixing is seen as an attempt to protect farmers from the volatile prices on the world market...
(Cocobod). In 1984 it underwent further institutional reform aimed at subjecting the cocoa sector to market forces
Market Forces
Market Forces is a science fiction novel by Richard Morgan, first published in 2004.Set in 2049 in the wake of a global economic downturn called the Domino Recessions, it follows up-and-coming executive Chris as he plunges into the profitable field of Conflict Investment...
. Cocobod's role was reduced, and 40 percent of its staff, or at least 35,000 employees, were dismissed. Furthermore, the government shifted responsibility for crop transport to the private sector. Subsidies for production inputs (fertilizers, insecticides, fungicides, and equipment) were removed, and there was a measure of privatization
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
of the processing sector through at least one joint venture. In addition, a new payment system known as the Akuafo Check System was introduced in 1982 at the point of purchase of dried beans. Formerly, produce buying clerks had often held back cash payments, abused funds, and paid farmer with false checks. Under the Akuafo system, a farmer was given a check signed by the produce clerk and the treasurer that he could cash at a bank of his choice. Plantation divestiture proceeded slowly, however, with only seven of fifty-two plantations sold by the end of 1990. Although Ghana was the world's largest cocoa producer in the early 1960s, by the early 1980s Ghanaian production had dwindled almost to the point of insignificance. The drop from an average of more than 450,000 tons per year to a low of 159,000 tons in 1983-84 has been attributed to aging trees, widespread disease, bad weather, and low producer prices. In addition, bush fires in 1983 destroyed some 60,000 hectares of cocoa farms, so that the 1983-84 crop was barely 28 percent of the 557,000 tons recorded in 1964-65. Output then recovered to 228,000 tons in 1986-87. Revised figures show that production amounted to 301,000 tons in 1988-89, 293,000 tons in 1990-91, and 305,000 tons in 1992-93. After declining to 255,000 tons in 1993-94, the crop was projected to return to the 300,000 ton range in 1994-95.
In the early 1990s, Cocobod continued to liberalize and to privatize cocoa marketing. The board raised prices to producers and introduced a new system providing greater incentives for private traders. In particular, Cocobod agreed to pay traders a minimum producer price as well as an additional fee to cover the buyers' operating and transportation costs and to provide some profit. Cocobod still handled overseas shipment and export of cocoa to ensure quality control.
In addition to instituting marketing reforms, the government also attempted to restructure cocoa production. In 1983 farmers were provided with seedlings to replace trees lost in the drought and trees more than thirty years old (about one-fourth of the total number of trees in 1984). Until the early 1990s, an estimated 40 hectares continued to be added to the total area of 800,000 hectares under cocoa production each year. In addition, a major program to upgrade existing roads and to construct 3,000 kilometers of new feeder roads was launched to ease the transportation and sale of cocoa from some of the more neglected but very fertile growing areas on the border with Côte d'Ivoire
Côte d'Ivoire
The Republic of Côte d'Ivoire or Ivory Coast is a country in West Africa. It has an area of , and borders the countries Liberia, Guinea, Mali, Burkina Faso and Ghana; its southern boundary is along the Gulf of Guinea. The country's population was 15,366,672 in 1998 and was estimated to be...
. Furthermore, the government tried to increase Ghana's productivity from 300 kilograms per hectare to compete with Southeast Asian productivity of almost 1,000 kilograms per hectare. New emphasis was placed on extension services, drought and disease research, and the use of fertilizers and insecticides. The results of these measures were to be seem in rising cocoa production in the early 1990s.
Recent Growth
Ghana's cocoa production enjoyed a period of on average 16% in the period 2000–03. Cocoa has a long production cycle, far longer than many other tropical cropsTropical agriculture
Worldwide more human beings gain their livelihood from agriculture than any other endeavor; the majority are self-employed subsistence farmers living in the tropics...
, and new hybrid varieties need over five years to come into production, and a further 10 to 15 years for the tree to reach its full bearing potential. Yet the reasons for this huge production increase are varied and in fact Ghana's cocoa yields per hectare are still low by international standards. Researchers at the Overseas Development Institute
Overseas Development Institute
The Overseas Development Institute is one of the leading independent think tanks on international development and humanitarian issues. Based in London, its mission is "to inspire and inform policy and practice which lead to the reduction of poverty, the alleviation of suffering and the achievement...
identify the following as particularly important:
- Land
- Labour
- Fertiliser
- Insecticide
- Agricultural equipment
- Western Sefwi (suggesting smuggling from Côte d'IvoireCôte d'IvoireThe Republic of Côte d'Ivoire or Ivory Coast is a country in West Africa. It has an area of , and borders the countries Liberia, Guinea, Mali, Burkina Faso and Ghana; its southern boundary is along the Gulf of Guinea. The country's population was 15,366,672 in 1998 and was estimated to be...
) - Rainfall
- Male cocoa farmer
- Use of spraying machine
Yet this studied suggests that the most important factors in the increased production are:
- New land brought under cultivation
- More intensive use of household labour
- A good rainfall pattern
- Effectiveness of farm spraying and increased fertiliser use
This study suggests that Ghana's cocoa farmers are not making the best use technological innovations in their production and instead their increased production is not sustainable. Bringing new land under cultivation is risky, as much of the land was previously forest and after a short period and without adequate attention this land may be exhausted. Intensive use of labour has led to high increases in the cost of labour and may impact profitability and high rainfall is only periodic.
Hybrid System of Liberalisation
Ghana Cocoa BoardGhana Cocoa Board
The Ghana Cocoa Board is a Ghanaian government-controlled institution that fixes the buying price for cocoa in Ghana, the world's second largest producer of the commodity. The price-fixing is seen as an attempt to protect farmers from the volatile prices on the world market...
's experimentation with privatisation has created a hybrid system whereby despite all exports being controlled by the state, there are now around 25 private companies buying the crop in all the areas of the country where it is grown. After 14 years, the successes and failures of this hybrid system has been the subject of a study by researchers at the Overseas Development Institute
Overseas Development Institute
The Overseas Development Institute is one of the leading independent think tanks on international development and humanitarian issues. Based in London, its mission is "to inspire and inform policy and practice which lead to the reduction of poverty, the alleviation of suffering and the achievement...
. Competition
Competition
Competition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...
was clearly found to have increased production levels throughout the country, yet access to credit remained one of the most important factor determining the level of competition and farmers rarely made the most of all the available options to sell their crop (often they only made use of one). Their choice was based on the ability of a company to pay promptly in cash and thus there are only 5 major players on the market: PBC (formerly state owned), Kuapa Kokoo
Kuapa Kokoo
Kuapa Kokoo is a cocoa farmers' cooperative organisation, established in Ghana in 1993. It was formed following the Ghanaian government's liberalisation of internal cocoa marketing in 1992, which, farmers feared, would lead to the entry of private companies into the market with whom they would be...
(a hugely successful farmers’ based cooperative working on Fair Trade
Fair trade
Fair trade is an organized social movement and market-based approach that aims to help producers in developing countries make better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as higher social and environmental standards...
principle), Adwumapa (a Ghanaian buying company), Olam and Armajaro
Armajaro
Armajaro is an investment firm based in London. The company specialises within the cocoa and coffee markets, managing investments in soft commodity and equity hedge funds...
(both foreign-owned companies, from Singapore and the UK respectively). Another key determining factor is the distance of the plantation from the main market, as the more remote farms more often find it easier to sell to the formally state owned PBC.
This hybrid scheme benefits a variety of players:
- The state, which maintains a monopolyMonopolyA monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
on all exports and makes a substantially higher return from taxation than other cocoa regions; - The traders, who compete for the purchase of higher volumes of the export crop on non-price terms throughout the cocoa belt areas; and
- The farmers, who are guaranteed a minimum floor price regardless of their geographical location.
Researchers at the ODI
Overseas Development Institute
The Overseas Development Institute is one of the leading independent think tanks on international development and humanitarian issues. Based in London, its mission is "to inspire and inform policy and practice which lead to the reduction of poverty, the alleviation of suffering and the achievement...
therefore suggest that liberalisation has been good for producers by:
- providing farmers with more choice of buyers;
- delivering cash payments promptly; and
- maintaining stability in producer prices through-out the season.
Yet the question remains for policy-makers as to the benefits of the state controlling an export monopoly and its strong presence of the public sector in the internal market and whether there should be even more liberalisation and whether it is providing the right incentives for producers to develop better (and sustainable) farming practices.
Other commercial crops
The main industrial crops are palm oil, cottonCotton
Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....
, rubber
Rubber
Natural rubber, also called India rubber or caoutchouc, is an elastomer that was originally derived from latex, a milky colloid produced by some plants. The plants would be ‘tapped’, that is, an incision made into the bark of the tree and the sticky, milk colored latex sap collected and refined...
, sugar cane, tobacco
Tobacco
Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...
, and kenaf
Kenaf
Kenaf [Etymology: Persian], Hibiscus cannabinus, is a plant in the Malvaceae family. Hibiscus cannabinus is in the genus Hibiscus and is probably native to southern Asia, though its exact natural origin is unknown. The name also applies to the fibre obtained from this plant...
, the latter used in the production of fiber bags. None is of strategic economic importance, and all, apart from oil palms, have suffered as a result of the country's economic difficulties. Despite claims that such crops could assist local industrialization efforts, the government has not focused the same attention on this sector as on export crops. For example, sugar cane output has diminished with the closure of the country's two sugar mills, which produced 237,000 tons per year in 1974-76, but only 110,000 tons in 1989.
The government has actually encouraged the export rather than the local processing of rubber, rehabilitating more than 3,000 hectares of plantations specifically for export production rather than revitalizing the local Bonsa Tire Company, which could produce only 400 tires per day in 1988 despite its installed capacity for 1,500 per day.
By the 1990s, the tobacco sector was expanding and moving toward higher export production. Ghana's dark-fired leaf probably grows too fast and requires too rich a soil to compete effectively with rival crops, but the potential for flue-cured and Burley varieties is good. Pricing difficulties had reduced tobacco production from 3,400 tons in the early 1970s to an estimated 1,433 tons in 1989. Output began to improve in 1990, reaching 2,080 tons. In 2006-2007 BAT (British America Tobacco) shut down their Torikawa plant amid a social movement against tobacco smoking which resulted from high taxes caused by heavy tobacco smuggling.
The Leaf Development Company was established in 1988 to produce tobacco leaf for the local market and to lay the basis for a future export industry. In 1991, the company's first commercial crop amounted to 300 tons of flue-cured, 50 tons of Burley, and 50 tons of dark-fired tobacco (all green leaf weights), of which 250 tons were exported, earning US$380,000. In 1991 Rothmans, the British tobacco company, acquired a 49.5 percent stake in the company and took over management of the Meridian Tobacco Company in partnership with the state-owned Social Security and National Insurance Trust. Another firm, the Pioneer Tobacco Company, announced a 92 percent increase in post-tax profits of more than ¢1 billion for 1991. The company declared dividends worth ¢360 million, double the amount paid out in 1990.
Cotton production expanded rapidly in the early and mid-1970s, reaching 24,000 tons in 1977, but it fell back to one-third of this figure in 1989. Since the reorganization of the Ghana Cotton Development Board into the Ghana Cotton Company, cotton production has steadily increased from 4 percent of the country's national requirement to 50 percent in 1990. Between 1986 and 1989, Ghana saved US$6 million through local lint cotton production. The company expected that between 1991 and 1995, about 20,000 hectares of land would be put under cotton cultivation, enabling Ghana to produce 95 percent of the national requirement.
Food crops and livestock
The main food crops are corn, yams, cassava, and other root crops. Despite government efforts to encourage farmers to switch to production of staples, total food production fell by an average of 2.7 percent per year between 1971-73 and 1981-83. By 1983 Ghana was self-sufficient in only one staple food crop—plantains. Food imports rose from 43,000 tons in 1973 to 152,000 tons in 1981.Those were various reasons for this poor performance, including growing urbanization and a shift in consumer preference from starchy home-grown staples to rice and corn. However, farmers also suffered from shortages of production inputs, difficulties in transporting produce to market, and competition from imported foods that were underpriced because of the vastly overvalued cedi. Weather also played a major part, particularly in 1983, when drought cut cereal production from 518,000 tons in 1982 to only 450,000 tons at a time when an extra million people had to be fed after the expulsion of Ghanaians from Nigeria. Food imports in 1982-83 amounted to 115,000 tons (40 percent as food aid), with the 1983-84 shortfall estimated at 370,000 tons (of which food aid commitments covered 91,000 tons).
There was a spectacular improvement beginning in 1984, mainly because of recovery from the prior year's drought. By 1988 the agricultural sector had vastly expanded, with food crops responsible for the bulk of the increase. Drought conditions returned in 1990, bringing massive falls in the production of all food crops apart from rice, but better weather and improved production brought prices down in 1991.
In August 1990, the government moved to liberalize the agricultural sector, announcing the end of minimum crop prices. The measure's impact was difficult to gauge because higher production meant more food was available at better prices anyway. The government's medium-term plan, outlined in 1990, sought to raise average crop yields and to increase food security, with special attention to improved producer incentives and storage facilities.
Livestock production is severely limited by the incidence of tsetse fly in Ghana's forested regions and by poor grazing vegetation elsewhere. It is of major importance only in the relatively arid north and has not been earmarked for special treatment in Ghana's recovery program. In 1989 there were an estimated 1.2 million cattle, 2.2 million sheep, 2 million goats, 550,000 pigs, and 8 million chickens in Ghana.
See also
- Fishing in GhanaFishing in GhanaFishing in Ghana increased considerably in the late 1960s, from 105,100 tons of marine fish caught in 1967 to 230,100 tons in 1971. In 1982 the yield was 234,100 tons, composed of 199,100 tons of marine varieties and 35,000 tons of freshwater fish from lake Volta...
- Forestry in GhanaForestry in GhanaForests cover about one-third of Ghana's total area, with commercial forestry concentrated in the southern parts of the country. This sector accounted for 4.2 percent of GDP in 1990; timber was the country's third largest foreign exchange earner...
- Economy of GhanaEconomy of GhanaThe economy of Ghana, West Africa, has a diverse and rich resource base, and as such, has one of the highest GDP per capita in Africa. Ghana remains somewhat dependent on international financial and technical assistance as well as the activities of the extensive Ghanaian diaspora. Gold, timber,...
currently the contribution of agriculture to gdp is 37.3%