Ghana country food and  agriculture delivery compact (2)
A well diversified crops sector can rake in more revenue from exports

Ghana country food and agriculture delivery compact (2)

Agriculture remains a priority for the government as it seeks to modernize and transform the sector for sustainable food security, job creation, agro-industrialization, and improved livelihoods. 

The government sees agricultural development as the backbone of its overall development strategy. For the last six years, it has intensified efforts to achieve these goals by designing several integrated and mutually reinforcing programmes which align with the 3rd Generation of the National Agricultural Investment Plan: Investing for Food and Jobs. 


This is an agenda for transforming Ghana’s agriculture (2018-21), developed to operationalise the vision of the government’s “modernized agriculture culminating in a structurally transformed economy and evident in food security, employment opportunities and reduced poverty” as indicated in the Medium-Term National Development Policy Framework.

These programmes also respond to international development frameworks such as the SDGs, the CAADP-Malabo declaration, and the ECOWAP. Several multilateral and bilateral development agencies have provided grants, loans, and technical assistance to complement investments aligned with these plans. 

Key among these are the AfDB, IFAD, KfW, World Bank, the Government of Canada, USAID, JiCA, FAO, and AGRA. Many of these agencies’ investments are supporting crop and livestock value chains prioritized by government for food security and income diversification. 

Others support capacity and policy development and implementation. The Canadian government supported the Modernizing Agriculture of Ghana programme over the last six years, with a CAD 125 million budget support, focusing on developing the capacity of extension services and overhauling agricultural training colleges to provide skilled manpower in the sector. 

The COVID-19 and the UN Food Systems Summit also provided an opportunity for government to re-prioritise its agriculture development agenda and reaffirm its commitment.

The Planting for Jobs Campaign, one of the major programmes of the IFJ, has made significant investments over the last six years in improving access to agricultural inputs, extension, storage, mechanization, and irrigation. 

As of 2020, about 1.7 million farmers across the country benefitted from subsidized fertilizers and seeds. The intervention helped to increase the adoption of improved seeds and fertilizers, reflected in an increase in the use certified seeds from 11 per cent to 43 per cent between 2011 and 2021.

The new Investing for Food and Jobs II: Agenda for Transforming Ghana’s Agricultural Sector (2022-25) is currently under implementation. It aims to better position Ghana to withstand current and future problems related to global supply chains and macroeconomic crisis, including currency volatility. 

Recognising that strategic interventions to scale up food production and build resilience given the recent global crisis are key to averting a food crisis, the government is promoting special strategic actions to address high costs and potential food shortages caused by the pandemic and especially the Russia-Ukraine conflict.

Given the critical role of private sector investments for the agricultural transformation agenda, the government implemented several policy measures to attract private sector investment: 

(i)    a Ghana Incentive-Based Risk Sharing Agricultural Lending scheme to de-risk agriculture lending; 

(ii)    the Ghana CARES programme for import substitution; 

(iii)    (iii) the One-District-One factory programme (as part of the IJF), and

(iv)    investment incentives such as tax holders and free zone schemes. 

The Ghana COVID-19 Alleviation and Revitalization of Enterprises Support (Ghana CARES) programme is the government’s response to the impact of the pandemic, with a specific focus on modernizing the agricultural sector by supporting commercial farming, developing, and promoting agro-processing and import-substitution food commodities such as rice, poultry, and soybeans.

The Ministry of Food and Agriculture (MoFA) in collaboration with the International Finance Corporation has been promoting agribusiness through investment facilitation. 

Strategic investment briefs and business models for rice, citrus, pineapple, mango, banana, and mango orchards were developed in 2021. In 2021, selected district departments of agriculture linked 312,230 value chain actors (including 133,599 females) to markets, resulting in a total volume of 269,711 tons of commodity traded. 

This achievement is expected to boost agribusinesses’ confidence in market-oriented agriculture and a long-term term business relationship. Further, WFP built a trade relationship between smallholder farmers, aggregators, and two industrial food processors  - Premium Foods Limited and Yedent.

GIRSAL implemented two special initiatives: The interest Rate Subsidy Initiative (IRS) and Fidelity Young Entrepreneurs Initiative (FYEI). The IRS granted a 50 per cent subsidy on financial institutions’ interest charges for loans advanced to qualified agribusinesses in selected value chains and activities. 

This is part of the agricultural component of Ghana CARES. The FYEI seeks to provide financial and non-financial resources to enable youth-related businesses to survive and thrive.

Despite its importance, agriculture has large financing gaps. Over the years, public spending on agricultural development in Ghana has been low by regional and international standards, despite the allocation of higher public expenditures to the sector in recent years. 

The percentage of total fiscal spending dedicated to agriculture grew from less than one per cent in 2015 to nearly 2.5 per cent in 2019 (FAO, 2022), yet this remains far below the government’s 10 per cent commitment under the Investing for Food and Job program.

Private sector investment in agriculture is a cornerstone for accelerating growth and expanding the sector’s contribution to the overall economy. Ghana has one of the most attractive investment and business environments in West Africa, and the performance of private sector investments in agriculture have been mixed over the past 20 years. 

The growth rate of private sector investments in agriculture has dropped over time, from an annual average of 17.2 per cent from 2001-10 to an annual average of 3.7 per cent in 2011-20, with some improvement in 2020 (annual growth rate of 6.7 per cent).

The positive news is that the relative interest of the private sector in agriculture as compared to other sectors has increased slightly over time.

Existing and emerging challenges 

Regardless of the progress made in the agri-food sector, many challenges must be addressed to accelerate agricultural growth through further productivity gains, area expansion, and value addition. 

These range from technical, business management, financing, and enabling environment issues that actors along the value chains face.

The government of Ghana must address the sector’s challenges for a transformative agricultural agenda.

• Seeds and fertilizers system: Poor maintenance and breeding of released varieties of maize, rice, and soybeans and inadequate production of preferred varieties are affecting the quality and quantity of early generation seeds. 

Limited technical and logistical capacity for seed production (hybridization), handling, inspection and certification is leading to poor seed quality. There is also limited availability of locally released certified vegetable seeds (tomato, pepper, onion) and market-preferred locally-developed vegetable varieties for farmers. 

Average global fertilizer prices have risen since 2018, which has affected fertilizer supply, leading to high domestic prices. A bag of 25 kg of subsidized fertilizer that sold for GH¢62 in 2021 cost GH¢160 in the first quarter of 2022. 

The conflict in Ukraine has affected international prices of crude oil and related commodities, including agricultural inputs.

Poultry development

Inadequate and poor-quality day-old chicks is a challenge created by inadequate and poor management of breeder stock and hatchery operations. 

There are identified challenges with poultry health due to poor storage and handling, inappropriate application of vaccines and drugs, poor implementation of biosecurity measures, inadequate technical staff and disease surveillance, and inadequate laboratory facilities. 

There is limited availability of quality feed for poultry although Ghana has been self-sufficient in maize production for decades, but maize is a staple and human and animal consumers compete. 

Processing birds is limited to manual dressing as commercial poultry processing facilities are grossly inadequate. A few commercial farms have processing facilities for dressing their own birds.

Advisory and extension services

Agricultural extension services are designed to assist farmers to adopt improved technologies in agricultural production, farm management, harvest, and post-harvest. 

Agricultural extension typically takes the form of farm and home visits, field demonstrations, and mass media to promote technology dissemination and adoption. 

However, some extension methods do not effectively meet their goals; too few extension agents and low budgetary allocations for extension activities have led to continuous modification and experimentation with existing methods, leaving farmers to rely on NGOs and other donor projects for training on improved technologies. 

The government tried to increase the extensionist-farmer ratio from 1:1908 in 2018 to 1:709 in 2022 but this is still insufficient, and funding for extensionist operations remains limited.

Poor extension has affected the capacity of farmers and especially smallholders, to move away from traditional practices for managing soil and water, disease and pest control, harvest, and post-harvest.

Agricultural research and development

Ghana has been overly reliant on foreign technologies to develop agricultural engineering/mechanization for equipment and its applications. Some foreign technologies have been generally inappropriate and expensive for lack of structured and sustained research and development programmes. 

Agricultural research in Ghana is informed by some strategic and policy frameworks. The Science, Technology, and Innovation Strategy for Africa), formulated in line with the African Union Agenda 2063 and the Comprehensive African Agricultural Development Programme represents the first of the 10-year incremental phasing strategies designed to enhance STI impact in critical sectors such as agriculture. 

Over the years, Ghana has implemented a National Science, Technology, and Innovation Policy whose principal thrust is to ensure that science and technology drive all sectors of the economy. 

Thus, agriculture must receive support to invest in sector-specific science and technology programmes, in addition to the current initiatives.

Land tenure

The land tenure system is a key agriculture and crop production challenge in Ghana. It is a constraint to crop production, especially for commercial investments, because of its general effects on access and security; it has deterred investments in land development to support agricultural production.

Land disputes have led to major investment losses in the agricultural sector. The current production area for rice, soybeans, maize, and vegetables is limited because their expansion on underdeveloped lands is limited. 

The high costs of land development have especially hindered any expansion of the area under production for the private sector to support youth and women.

Arable land under cultivation

Arable land as a share of the land area of Ghana went from 7.5 per cent in 1971 to 11 per cent in 2020, for an average annual rate of 0.86 per cent. Feeding the growing population with limited arable land and water resources has become a major challenge. 

Urbanization and changes in the human diet have increased the pressures on agro-ecosystems and contributed to food insecurity.

The growing demand for land, characterized by the purchase and long-term leases of vast lands, has increased pressure on cultivatable land in many rural, urban, and peri-urban settlements in Ghana. 

Urbanization is a major cause in the loss of agricultural lands in developing countries. Population growth and high demand for housing and certain social amenities in the urban areas also push and displaces farmers in the urban and peri-urban areas off of good agricultural lands.

Irrigation infrastructure development

A good number of irrigation schemes rely on electric pumps to lift water for crop production. However, the electrical power tariff system has made pump irrigation expensive and unattractive because the maximum demand levy is charged arbitrarily on pump equipment in addition to the actual power consumed: arbitrary charges can be three or four times the cost of actual power consumed. 

Typically, small-scale pump-operated irrigation schemes are not economically viable because they are small and energy is expensive; smallholder farmers have abandoned them. 

Irrigation infrastructure development is capital intensive and more often relies on government or donor funding. Nevertheless, government allocations to fill the gap are inadequate and often slow, making it difficult to progressively add to the irrigated land stock and to carry out regular operations and maintenance of the existing irrigation infrastructure. 

This leads to deteriorating facilities, which affects productivity.

Mechanization development

Agriculture in Ghana is over-dependent on rainfall and on basic agricultural tools and inputs with the resultant tedium, drudgery, and low productivity. 

The short cropping calendar and erratic rainfall make for fewer than 60 days of effective land preparation for the major and minor cropping seasons in the south and for mono cropping season in the Savannah.

Successful farmers must have timely access to farm equipment to prepare their fields for effective cropping. However, the low farmer to equipment ratio makes this practically unachievable (1:1500). 

There is limited provision of well-organized, commercially viable mechanized services because of the high cost of agricultural machinery and equipment. 

Furthermore, the high cost of credit to procure these high-value capital goods creates barriers for many farmers and the local supply market to invest single-handedly in agricultural mechanization. 

To address the market imbalances, the government of Ghana through the MoFA introduced the privately-managed Agricultural Mechanization Services Enterprise Centres (AMSEC) strategy to offer mechanized services to smallholder farmers nationwide.

A study of AMSECs commissioned in 2015 by JICA showed that of the 89 AMSECs established between 2008-11, 37 per cent had ceased operations because of premature breakdowns of equipment resulting from poor management and from the operators’ limited technical skills. 

The lack of vocational and technical training centres for agricultural mechanization and management has also contributed to undeveloped human resource capacity in the public and private sectors.

Post-harvest management

Small-scale farmers experience post-harvest losses as high as 30 per cent. High post-harvest losses occur especially during bumper harvests because of limited handling, processing, and storage facilities. 

Limited drying platforms/patios for maize, rice, soybeans, and vegetables also affects produce quality. Due in part to the lack of appropriate and adequate storage structures, there are large price differentials between harvest time and the beginning of the planting period for many food commodities. 

Efficient storage facilities insure the producer against income instability because they prevent excessive price fluctuations. The obsolete and inadequate levels of post-harvest facilities in Ghana are a major bottleneck to accelerating agricultural growth.

Small-scale farmers are invariably forced to dispose of their produce immediately after harvest to meet their urgent needs for cash, which results in low prices.

Rice processing plants, for example, often lack de-stoners and colour sorting equipment. Marketing farm produce typically lacks grading, processing, good handling, presentation, and packaging. Processing and packaging costs are high and there is little knowledge about quality control measures in the value chain.

Climate change threats to agriculture performance

Several studies have revealed a gradual rise in temperature and inter-annual variability in the country’s agro-ecological zones. Rising temperatures, variable rainfall, extreme weather events, and rising sea levels have an impact on many economic sectors and areas, including agriculture, forestry, health, water, and energy. 

The impact of climate change is growing across the country and is expected to worsen. This will threaten development unless efforts are made to improve resilience and manage the associated risk. 

The Ghanaian government has developed and is implementing some national policies, strategies, and regulatory frameworks to protect the natural resource base from climate impacts and to strengthen the country’s resilience. 

The National Climate Change Policy (NCCP) is the foundation for all sectoral policies and implementation strategies. The National Adaptation Plan and corresponding National Climate Change Adaptation Strategy are the foundation for adaptation-related interventions in accordance with the NCCP’s broad policy directions. 

Despite these policies and plans, there have been only limited interventions to support and improve resilience and these have been slow to implement.

Intra-regional trade and Ghana’s current limited participation

There are weak linkages among value chain actors due to unstructured markets, which is compounded by the seasonality of production and availability of commodities year-round. 

Limited operation of buffer stocks affects commodity prices on the market during the lean and peak seasons, which poses a major challenge to consumers. 

Weak marketing infrastructure, poor distribution networks, and poor product standardization affects commodity marketing. In addition, COVID-19 disrupted the supply chain and reduced public agricultural spending. 

Unreliable and unstable markets, unfair competition from imported commodities such as poultry meat, lack of appropriate cold storage facilities, inadequate processing plants and frequent electricity outrages all negatively influence Ghana’s regional trade integration.

Gender and youth

Youth seeking employment migrate in high numbers from rural areas to urban centres, where high unemployment persists making them vulnerable to poverty and deviant behaviour. 

Alternately, youth may engage in rural crop production, poultry production and gardening. Gender inequality characterises Ghanaian agriculture, starting with land ownership that is largely male dominated for cultural and traditional reasons. 

Often, women can lease land, typically 0.5-3 hectares, to cultivate annual crops, putting them (and youth) in a weak position to access extension, finance, and input and output markets.

Agricultural finance

There is a lack of affordable credit, there are delays in accessing credit, a lack of medium- and long-term credit, high interest rates on credit, short loan repayment periods and inadequate insurance facilities.

Financing structures to extend credit to smallholder irrigation farmers and those along the agricultural value chains are limited. 

Investors in the irrigation subsector have often borrowed at high commercial rates, stalling the much-needed investment in the sector.

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