Agriculture in Ghana
|This article is outdated. (March 2008)|
Agriculture in Ghana consist of a variety of agricultural products and is an established economic sector, and provides employment on a formal and informal basis. Ghana produces a variety of crops in various climatic zones which range from dry savanna to wet forest and which run in eastwest bands across Ghana. Agricultural crops, including yams, grains, cocoa, oil palms, kola nuts, and timber, form the base of agriculture in Ghana's economy.
The first president of Ghana, Kwame Nkrumah 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 were 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 a financial ruin. Accordingly, since that time, the government has invested significant funds in the rehabilitation of agriculture. The government had 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 had been initiated. Except for specific development programs, however, the government had 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, 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.
Cocoa production occurs in the forested areas of Ghana: Ashanti Region, Brong-Ahafo Region, Central Region, Eastern Region, Western Region, and Volta Region. The crop year begins in Octoberwhile the smaller mid-crop cycle starts in July. All cocoa, except that which is smuggled out of the country, is sold at fixed prices. Although most cocoa production is carried out by peasant farmers, a small number of farmers appear to dominate the trade. The government controls the industry through the Ghana Cocoa Board (Cocobod).
Other commercial crops
The main industrial crops are palm oil, cotton, 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. 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 grew too fast and required rich 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 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 the declined performance, including growing urbanization and a shift in consumer preference from starchy home-grown staples to rice and corn. However, farmers also had to deal with 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. Food imports in 1982-83 amounted to 115,000 tons, with the 1983-84 shortfall estimated at 370,000 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 was limited by the incidence of tsetse fly in Ghana's forested regions and by low grazing vegetation elsewhere and it was of major importance only in the relatively arid north and was not earmarked for special treatment. 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.
The economic contribution of agriculture to Ghana's GDP shrunk in 2012 to 22.7%.