Inadequate opportunities for farmers

Agriculture accounts for about 20 per cent of Ghana's GDP and employs 44.7 per cent of the working population. Ghana has five agro-economic regions.

The dominant agricultural sector is cocoa, of which Ghana is the second largest producer in the world after Cote d’Iviore (together they account for 70 per cent of the world market share). Cocoa is cultivated in the centre of the country, from the Ashanti plateau to the Volta basin.

Ghana can produce up to 850 000 tonnes of beans during good harvests.

However, despite the massive contributions the sector is making to the development of the country, enough opportunities have not been created for stakeholders, particularly farmers.

Statistics

Statistics indicate that by 2050, the world population will reach 9.3 billion, with 1.8 billion coming from Africa and about 53 million from Ghana, up from the current 30 million.

The increasing population and poverty reduction enjoins policy makers, donors, research scientists and extension agents to partner and work assiduously towards food security, closing the yield gap which is currently estimated at more than 50 per cent of yield potentials of a number of crops through productivity enhancement.

We need to be prudent and efficient in the use of resources at our disposal.

Director Crop Research

The Director of the Crop Research Institute of the CSIR, Dr Moses Mochia, has indicated that to ensure population increase does not have a negative impact on the country, opportunities have to be made available for stakeholders.

There are some areas we need to target, which include land, education, financing, market, available infrastructure, institutions, gender, extension service, research development, producer organisations, output and input market.

Land

Land markets have played a fundamental role in facilitating agricultural revolutions.

China's economic reform began with making possible private land use and just recently, new land reforms have institutionalised including longer term leases to allow for larger land holdings and migration.

Complex and uncertain land tenure system is a major challenge that hampers private investments in Ghanaian agriculture.
Some recent estimates suggest that as much as 80 per cent of Ghana's arable land is uncultivated, in part due to insecure property rights.

There is much change occurring in land tenure systems currently, under the impetus of new interests and market pressures, and the government’s new land policy and a land administration project that seeks to address land issues comprehensively are some of the interventions that can address this challenge.

The general sense is that land is still a major constraint to agricultural investments, both for small-scale farmers and for commercial investments.

There is a need to speed up the pace of land reform here in a pro-agriculture policy approach. The 'land bank' proposal, broached by the government, which is being tried in some African countries, promises to unleash a more immediate response.

Basic education

Basic education is critical for small holder farmers who need to adopt new technologies, seeds and crops.

While Ghana has made major strides in recent years in expanding gross enrolments in primary education, there remains a major unfinished agenda here, relating to the quality of education, the need to focus on vocational training as an integral part of the education system and programmes of adult literacy that will help current farmers to absorb new methods of agriculture should not be under-estimated.

Agricultural Financing
Financial constraints originate from the lack of asset ownership to serve as collateral for capital.

Lack of credit, particularly for input purchases, is the most prevalent constraint to agricultural development in a 2007 MoFA survey.

Reports indicate that agriculture is not receiving the expected support from the formal banking system, with only a minute percentage of their credit going to the sector.

The reliance on rural finance and micro finance credit means an average loan size of under $300.

The micro finance revolution, providing credit without formal collateral, has made inroads into benefiting many poor farmers, including women, yet it remains limited in its scale and scope, especially in the background of recent banking crisis.

Finance is increasingly being provided through the contract farming approach by interlinked agents in the form of government support through programmes such as the Planting for food and jobs campaign (PFJ). It is reported that information technology is making loans less costly.

Markets

Making markets work better for smallholder farmers will require a major shift in the scope, efficiency and effectiveness of government programs.

Three key challenges relate to: rural infrastructure, input and output markets.

There is now a consensus in Ghana on the need for increased investments in infrastructure for development.

Again, the experiences of some Asian countries such as Indonesia and China demonstrate the power of rural infrastructure such as roads, irrigation and electricity, to improve growth and reduce poverty.

The impact on agricultural productivity and on the growth of the non-farm rural economy can be profound.

For example, it has been reported in some countries in Asia that living in a rural community with roads increased the probability of escaping poverty by about 70 per cent compared to being in a non-road community.

In China, an increase in irrigation resulted in a 1.2 per cent poverty reduction impact in the average community, through higher agricultural productivity.

Irrigation investments are very low in African countries; only about four per cent of land is irrigated, compared to 40 per cent in South Asia.

In Ghana, the reliance on rain-fed agriculture is overwhelming.

Agric productivity

Raising agricultural productivity will require the adoption of new seeds and the use of fertiliser. Access, knowledge and risks hinder the adoption of new technologies. Governments, using markets, have a role to play to streamline input markets.

There is growing interest, despite past failures, in experimenting with subsidies on seeds and fertilisers, through the “PFJ” approach.

These must be used carefully because of the risk of political capture and of irreversibility.

It is proposed that subsidies must be part of a broad productivity growth strategy and must have agreed exit benchmarks.

The participation of smallholder farmers in high value markets, both domestic and global, including the supermarket revolution, offers a new opportunity.

These are the fastest growing agricultural markets.

According to the World Bank, fresh and processed fruits and vegetables, fish and fish products, meat, nuts, spices and floriculture accounted for about 45 per cent of agrofood exports from developing countries, worth about $140 billion in 2004.

State institutions

One of the casualties of fiscal adjustment programmes in the 80s was the indiscriminate dismantling of state institutions in developing countries, including in Ghana, under the advice of the IMF and the World Bank, among others.

It has been established that developing countries such as Ghana need three important institutions that are particularly important for a pro-agriculture policy approach: producer organisations, Research & Development, and extension services.

Producer Organisations

For smallholder farmers, producer organisations are essential to achieve competitiveness.

They have expanded partly to fill the gap left by the closure of marketing boards and in response to democratisation.

The growth of these organisations in the country has the potential to transform agriculture in Ghana as is currently happening in some neighbouring countries.

Contract farming or out-grower systems are another manifestation of this.

Cautiously promoting such organisations is now considered essential to support small farmers.

Research & Development

Agricultural productivity growth is essentially driven by the adoption of new technologies tailored to local conditions.

R & D in SSA has grown substantially in the last 20 years, but it has tripled in countries such as India and China.

Brazil, with its research organisation EMBRAPA, has grown to become a world class producer and exporter of agricultural products such as soybean, oranges, sugarcane-based ethanol and poultry.

Ghana and other African countries have had national and regional R & D organisations for decades, but they are poorly staffed and resourced. Not surprisingly, crop yields have been well below world standards, and the yield gap has been increasing.

For example, the CSIR-CRI maize variety (CRI-Okomasa) has been used to brew STAR beer and CSIR-CRI cassava variety (CRI-Afisiafi) adopted under the President’s Special Initiative for starch production.

New varieties

Experimentation with new varieties, including Genetically Modified crops (GM), has to be encouraged as part of the new policy.

It is anticipated that going forward funding for agricultural research institutions should shift from over reliance of donor support to government funding of research activities.

The government should commit one per cent of GDP as promised, which should be aimed at supporting research and development (R&D).

In addition to that, it is expected that the private companies should contribute and support (R&D).

Extension Services

A pro-agriculture stance will need to rest on a strong extension service capability, as part of the capable state sanitary and phytosanitary standards for the export of high value agricultural products require the provision of extension support to smallholder farmers either through the private or public sectors.

The conditions of work of public extension officers and the management of their efforts pose tremendous challenges relating to the broader question of public service reforms, which have been very slow.

The issue of gender disparities within Ghana’s agriculture is quite pervasive. Women are typically confined to food production, while men dominate cash crop production.

Agricultural development, including efforts to diversify into marketable crop production and higher value crops, will imply changes in the relative roles of women and men.

Access to all inputs, credit and land tend to be biased in favour of men. Gender issues in agriculture should be central to any effort to raise agricultural productivity, and in addition, will advance gender equality for improved household security.