Overview of the Agricultural Sector in Ghana

Agriculture is one of the most significant economic sectors in many African countries. Agriculture contributes for 14% of overall GDP in Sub-Saharan Africa, and it employs the vast majority of the continent's people. Agricultural export products such as coffee, tobacco, oranges, citrus, and cotton are significant sources of foreign money for all countries on the continent. While Africa's population is expected to more than quadruple by 2050, agriculture is more important than ever for the continent and the world.

Agriculture is a significant economic sector in Ghana, employing a large section of citizens on both a formal and informal basis and accounting for a large share of GDP and export revenue. Agriculture contributes significantly to the Ghanaian economy and is a major source of employment, employing more than 40% of the country's population. The share of agriculture in GDP increased to 19.9% in 2020-21 from 17.8% in 2019-20. Agriculture also contributes an estimated 19.9% of Ghana’s current GDP, and also accounts for over 30% of export earnings (Ministry of Finance, 2021). The sector also serves as a major source of inputs to the production sector for the processing of foods and medicine, cosmetics, etc.

Ghana has a total land area of 238,539 km², of which 57%, (136,000 km²), qualifies as arable “agricultural land area”, with 58,000 km² (24.4%) currently under cultivation and 11,000 hectares under irrigation (Chapoto, Mabiso & Bonsu, 2013). The country grows a wide range of crops in diverse climatic zones that vary from dry savanna to moist forest and run from east-west across the country (Enu, 2014)..  Ghana's agriculture industry is mainly informal, creating a challenge of access to data and statistics available. However, the sector is dominated by smallholder farmers/ subsistence farming, traditional farming methods, and rainwater harvesting.

The sector is divided into four subsectors, which are crops (including cocoa), livestock, fishing, forestry and logging. Ghana's agricultural crops include cocoa (beans), cereals, yams, oil palms, timber, kola nuts, cassava, plantain, maize, groundnuts, cocoyam, tomatoes, pepper, oranges, onions, sorghum and pineapples (Krausova & Banful, 2010). Some livestock reared in Ghana includes goats, sheep and cattle, rabbit, pigs and poultry. The fishing sector is noted for harvesting fishes like tuna, salmon, mackerel, herring, redfish, catfish, horse mackerel, tilapia, sea bream, etc. Most of these are reared commercially. Ghana's timber export has a history of nearly 100 years, and the forest coverage rate once accounted for 34% of the land area. Ghana's main timber forest is in the southwest, covering an area of 82000 square kilometers, with 360 kinds of trees and more than 40 kinds of trees that can be exported.

Figure 1: Ghana Cocoa Farm

Source: Getty Images

Figure 2: Cabbage Farming in Ghana

Source: Google

Figure 3: Pineapple Farming in Ghana

Source: Google

Figure 4: Fish Farming In Ghana

Source: DW Network  

Figure 5: Fishing in Ghana

Source: BBC

Figure 6: Livestock Production in Ghana

Source: Google

Challenges facing the Agricultural Sector

Despite the importance of the sector to Ghana’s development and growth, a number of challenges continue to confront the sector.

(1) Low yields

First, the use of improved seeds is still low in Ghana, mostly due to their high cost and lack of information among smallholder farmers, causing low yields.  This challenge is also furthered by low fertilizer use among smallholder farmers. There is also the issue of water scarcity and climate change. All of this contribute to low yields in the sector. Another major challenge is the slow mechanization of agriculture in Ghana, culminating in limited fertilizer use. Again, this also contributes to low crop yield.

(2) Unstable connectivity between farms and markets

In the case of good crop yield, there is a challenge of connectivity between farms and markets. There is the issue of poor transportation and storage facilities due to an underdeveloped transport and logistics network. Road, transportation, and storage facilities are insufficient for the transit and storage of agricultural goods and inputs. As a result, the sector's potential is limited, and the country does not reap its full benefits. It causes a lot of post-harvest losses and makes it difficult for the industrial industry to employ agro-products as inputs.

(3) Output problems

Agricultural output is curtailed from reaching markets and in some cases, loses are incurred in the process of transport.   Also, agricultural producers also face storage challenges with the absent of warehouses to handle excess supply.  Furthermore, factories producing secondary agricultural products are facing a lack of sustainable, good-quality inputs.The country’s exports are also generally constrained by low production volumes, and farmers face the challenge of meeting EU and international standards on their produce. The fishing sector is also constrained by illegal, unregulated and unreported fishing.

(4) Poor financial support

Agricultural sector workers face poor financial support.  Access to financing is critical for the expansion of Ghana's agriculture industry, particularly for working capital such as obtaining inputs (seedlings, farm fertilizer), hiring workers, and acquiring fixed capital such as machinery. The lack of finance restricts the average acreage of cultivated farmlands, stifling agricultural expansion and having ramifications for the macroeconomy as a whole. Banks, rural banks, savings and loans companies, and microfinance organizations are among the financial sector firms active in agricultural financing in Ghana. Because there are uncertainties in the agricultural sector, such as fluctuating climate conditions, unstructured marketplaces, and unreliable supply chains, these players view agriculture as high risk and lend money to agriculture players at high interest rates, making farming expensive for farmers.

(5) The lack of reliable information

In Ghana, there is no centralized organized data that is available to everybody. Because data in the industry is fragmented and difficult to obtain, many people in the sector make mistakes that might have been avoided. This has an impact on private sector investment in the sector as well. The lack of reliable information has also had an impact on the sector's market structure. Farmers and other stakeholders are not paid fairly for their products.

(6) Farmers' inability to adapt modern technology

Farmers in Ghana are generally hesitant to accept new technology because they have not been exposed to them or do not trust how well they would influence their produce. Farmers took a long to accept new technology such as resilient seeds and other mechanized farming equipment, but once they saw the benefits, they stayed with it. Farmers' inability to adapt modern technology has resulted in circumstances such as over-reliance on rain to sustain plant development and failure to cultivate large hectares since they still farm using hoes and cutlasses.

The sector is also constrained by poor extension and education services. This means most farmers are not updated with current trends of farming and do not get the timely intervention if there is a pest or disease attack on their farms. This situation leads to low production since the farmers would use their crude ways of farming which in turn affects the fertility and longevity of the soil.

(7) Unreasonable land tenure structure

In terms of farming, Ghana's land tenure structure does not encourage commercial farming. This is due to the fact that the land tenure system is not governed by the government, but by chiefs, families, and other communal institutions, which makes acquiring land difficult. This discourages individuals who want to conduct large-scale farming, therefore we're stuck with smallholder agricultural methods.

Agricultural Sector Development

With growth and development, the country is progressively transitioning away from agriculture and toward industry and services, but agriculture remains an important part of the economy and a crucial vehicle for decreasing poverty and food insecurity. Increasing agricultural production is a key policy aim for the government, and it may be accomplished through three major mechanisms: expanding the area under cultivation, boosting yield, and minimizing post-harvest losses, all of which have space for improvement. Only approximately 64% of Ghana's total agricultural land area is farmed, 30% of agricultural land is mechanized, and the usage of improved seeds and fertilizer is minimal. Subsidies for improved seeds for maize production could boost their usage by and have a substantial effect on yield.

(1) Storage facilities and practical technologies

Recognizing the storage problem, the government launched the One District, One Warehouse program to boost capacity. However, some districts, particularly in major industrial regions, require more capacity than a single warehouse can offer. There is also a demand for new grain silos, which will help to decrease post-harvest losses caused by insects and disease. Furthermore, better washing, drying, grading, and bagging technology will aid in the proper processing and storage of agricultural goods. This not only reduces waste but also ensures higher-quality products at a lower cost.

(2) Policy support

The Agriculture Modernization Program of the Government aims to improve production efficiency, achieve food security and profitability for farmers, and considerably increase agricultural productivity as the foundation for industrialisation, employment development, and export. The government has raised subsidies on retail prices of seeds, fertilizers, and other agrochemicals, and it is focused on irrigation projects, supporting the supply of community-owned and operated small-scale irrigation facilities throughout the nation, particularly in northern Ghana, through the “One Village, One Dam Policy”, and improving the extension officer to farmer ratio.

(3) Financial surpport

Through different schemes and funds as needed for economic and social growth and employment creation, the government also distributes periodic allocated funding for involvement in important areas of the economy such as large-scale agricultural processing and housing. Banks are anticipated to offer lower-cost, long-term financing for the growth and expansion of important agricultural and industrial enterprises.

(4） Enhance the industrialisation

The government is also tackling the issue of poor economic growth at the district level by launching a huge statewide industrialization push that equips and empowers communities to use their natural resources to manufacture items that are in great demand both locally and globally. This would allow the country to reap the well-known benefits of industrialization, such as increased efficiency in all aspects of our society, increased agricultural and manufacturing output, less dependency on imports, and increased production of consumer products and food availability.

Conclusion

Ghana’s agricultural sector has great potential for improvement through smart investments in the right policies and modernized technologies. Altogether, existing interventions if pushed effectively will provide policymakers interesting new inputs to help improve food security, reduce poverty and increase agricultural exports to boost the country’s economy. The performance of the non-traditional export sub-sector appears to be improving. However, the increasing quantity of processed and semi-processed products from the nation has largely contributed to this rising tendency. With the exception of processed and semi-processed items, the shares of the different components in the non-traditional export sub-sector have been falling.

Despite the fact that the agricultural component of the non-traditional sub-sector looks to be diminishing, there are substantial signs of the sector's significance in terms of institutions and policy.  To boost the non-traditional export sub-sector even further, institutions should join in, and policies like the ones described should be approved and implemented to make the horticulture component of the agricultural component a highly lively one. Restrictions to the sub-sector occur in a variety of forms, and it is past time for institutions and policies to be implemented to address these constraints.

References

[1]Chapoto, A., Mabiso, A., & Bonsu, A. (2013). Agricultural commercialization, land expansion, and homegrown large-scale farmers: Insights from Ghana (Vol. 1286). Intl Food Policy Res Inst.

[2]Enu, P. (2014). Analysis of the agricultural sector of Ghana and its economic impact on economic growth. Academic Research International, 5(4), 267-277.

[3]Krausova, M., & Banful, A. B. (2010). Overview of the agricultural input sector in Ghana (No. 1024). International Food Policy Research Institute (IFPRI).

（Doreen Wang，Assistant Researcher of CWAS，School of Public Affairs and Administration of UESTC）

Please refer to the Chinese Version published on Huanqiu.com, one of the top three rating news media in China. Huanqiu.com is a national rating on line media platform, approved by the publisher of People's Daily and the Central Internet Information Office of China. This column is to provide a platform for researchers and practitioners on West African issues.

Link：https://opinion.huanqiu.com/article/449J4Tv7KqK