Ghanas Agricultural Sector - Essay Example

Ghana’s Agricultural Sector Student’s Name Institution Date Ghana’s Agricultural Sector Introduction Ghana is located in West Africa and it exports gold, petroleum and agricultural produce. Its main agricultural exports include cocoa, pineapples, rubber, cassava, plantains and sorghum. Cocoa production is done in areas with high annual rainfall ranging from 1000 to 1500 mm. The country’s 2012 GDP was 7.1% and agricultural sector contributed more than 27%. The sector employs more than 50% of the country’s workforce and it is a key pillar of the country’s economy (Ghana Economic Outlook 2013). The country’s agricultural sector does not produce enough food to meet its local demand and it has to rely on exports to bridge the shortfall in food production. There are other commercial crops which are not given a lot of attention by the government compared to cocoa (Vigneri & Santos 2007, p. 67). These crops are palm oil, cotton, sugarcane, kenaf and tobacco. Many subsistence farmers are concentrated in the northern parts of the country and they mainly engage in food crop farming. The country has not been able to address the issue of low food production adequately. Figure showing map of Ghana. Key Facts About Ghana Population (2012): 25.5 Million People Urban residents (2012): 52.92% of the total population GDP (2012): 37.5 billion US dollars Per Capita Income (2012): 1,410 US dollars Main Currency: Cedi Inflation Rate (2012): 9 % Human Development Index: 135 out of 187 Growth in Agricultural Sector (2010): 4. 8% Major Industries: Mining. Petroleum, Farming, Services. Major Crops: Cocoa, Coco Yams, Maize, Rubber, Yams, Cassava, Plantains. Source: AFDB. Accessed from http://www.afdb.org/en/countries/west-africa/ghana/ Interest Rates Figure showing Ghana’s interest rates from 2011 to 2013. Source: http://www.tradingeconomics.com/charts/ghana-interest-rate.png?s=ghanaintrate GDP per Capita Figure showing Ghana’s GDP per capita annual growth from 2004 to 2012. Accessed from http://www.tradingeconomics.com/ghana/gdp-per-capita-ppp Inflation Rate Chart showing Ghana’s inflation rates from 2012 to 2013. Source: http://www.tradingeconomics.com/charts/ghana-inflation-cpi.png?s=ghanair Agricultural Sector It is estimated that more than 57% of Ghana’s land area is suitable for crop farming. By the year 2000, an estimated 43% of the total land area in the country was being cultivated. The total land acreage on which cocoa is grown is an estimated 1.2 million hectares; palm oil is an estimated 285,000 hectares; cotton an estimated 62, 000 hectares while tobacco is grown on an estimated 1, 600 hectares (Chamberlin 2007, p. 31). The agricultural sector in the country relies on traditional forms of farming that involves farmers using hoes, cutlasses and other rudimentary tools. The demand for major food crops in the country such as maize, coco yams, cassava, plantains and rice outstrips the current production capacity. The country’s livestock production sector is not well established due to tsetse fly infestations in some areas which discourage farmers from rearing cattle, sheep and goats. Rapid urbanization in southern Ghana has had a negative impact on food production in the country. The country’s climate is warm and tropical towards the south east regions, hot and humid in the southwest and hot and dry in the north (Vigneri 2007, p. 87). The topography ranges from plateaus and low plains in different regions of the country. Ghana has a population of more than 24 million people and this high growth in population is attributed to a decrease in mortality rates and an increase in fertility rates being experienced. A majority of people in the country are aged 15 to 35 and it is estimated that in the next 5 years, there will be more than 10 million young people seeking employment opportunities. The demand for food crops in the country is expected to rise due to rapid growth in population rates. Ghana has also been experiencing high rates of inflation because it imports a significant amount of food products from other countries (Wolter 2008, p. 76). Crop Production Figures in Ghana 2012 Food Crop Production Estimates for 2012 Crop Production Output in Tons Maize 1,772,300 Rice 485,500 Millet 191,200 Sorghum 285,000 Cassava 14,592,900 Yam 6,313,100 Cocoyam 1,342,800 Plantain 3,683,500 Groundnut 477,200 Cowpea 244,900 Soya beans 164,700 Source: Ministry of Food and Agriculture, Republic of Ghana. Accessed from http://mofa.gov.gh/site/?page_id=11180 From the table, cassava is the most produced food crop in the country, followed by yam, plantain, maize and coco yam. The quantities of food produced in the country have been declining due to poor farming methods which have affected crop yields harvested in the country. The agricultural sector in Ghana still relies on outdated farming practices. However there is a shift towards organized farming practices initiated by the government to make the country self sufficient. Many Ghanaian farmers lack knowledge on how they can use technological innovations in agriculture to help them increase their crop yields. However, more research is being done by various governmental and non-governmental agencies to improve the quantity of food produced in the country. Ghana’s agricultural sector has faced a lot of challenges which have made it difficult for farmers to earn reliable incomes from farming activities. The government has initiated several strategies which are intended to improve the competitiveness of the country’s agricultural sector (Chamberlin 2008, p. 56). Agricultural Production Cocoa has been one of the country’s major exports, a vast amount of which is exported to China. The country is the second largest exporter of cocoa in the world after her neighbor, Ivory Coast. Most of the country’s food is produced in the northern parts of the country where rice, millet, yams, sorghums are grown. The northern region of the country also produces substantial amounts of livestock such as cattle, sheep and goats. The country has a lot of potential for different types of farming (Aryeetey, Harrigan, & Nissanke 2004). Coastal areas in the south mainly produce rice, maize, cassava, sugarcane, palm oil, soya beans and livestock. The southern region also has some areas where aquaculture and fish farming can offer viable returns to investors. The area near the River Volta delta has abundant water resources which can be used for fisheries industries (Pearson, Pilgrim & Pretty 2010, p. 65). Heavily forested areas which receive high amounts of rainfall are suitable for cocoa, coffee, oil palm, cashew, plantain and rubber cultivation. The government has introduced policies intended to encourage investors to take advantage of various agri-business opportunities in the country. A large section of the country is arable and this allows both crop cultivation and livestock rearing to be done on a large scale. The country also has opportunities for agricultural related industries in the country. Local farmers need a lot of seed varieties for planting during planting seasons because some of them cannot access high quality seeds. Some crops are also affected by pests and weeds and as such, they need pesticides, herbicides and other agrochemicals. The country has a lot of opportunities for firms that seek to produce agrochemicals and other important farming inputs (Boahen 2007, p. 89). The country’s agricultural sector requires high quality machinery such as tractors, harvesters and milling equipment to enable it process cereals and starch food crops after harvest. It also needs juice and palm oil processing plants which are able to serve the needs of local farmers based in various parts of the country. Other industrial crops such as rubber, sugarcane, cotton, cocoa and coffee need large processing plants to ensure they are delivered to different markets appropriately. Livestock products such as milk and meat need to be processed quickly because they are perishable and need to be sold to different consumers promptly. Fisheries sector has a large potential in the country and requires substantial investments to allow farmers to harvest fish from different aquariums before they are sold in the market (Codjoe 2007, p. 5). The country’s climatic and environmental conditions allow such a wide variety of agricultural activities to be done. The local food production industries are operating below their optimum capacity at an estimated 30 percent. This shows that any increase in crop production in the country will outstrip the ability of these processing plants to produce enough goods needed to satisfy the country’s high demand. Inefficient harvesting and storage methods have led to a reduction in food production in the country, a situation that needs to be reversed. A lot of food produced in the country’s main agricultural zones gets wasted before it is sold in the market. However, the government has introduced a stimulus package which is intended to stimulate the agricultural sector to make it more competitive (Fasdep 2013). Firms that have the ability to process more products are given tax holidays and this has brought about gradual improvements in the sector. However, poor infrastructure in some areas makes it difficult for farmers to transport their produce to different zones quickly. Horticulture production is an emerging agricultural segment that has positive prospects for growth. Ghana is the fourth largest exporter of pineapples to the EU, a factor which has helped to reduce over reliance on cocoa exports. It is estimated that pineapple exports accounted for close to 40 percent of foreign exchange earnings obtained from the horticultural sector in 2006 amounting to about 19 million US dollars (Pineapple Market Intelligence Report 2008). However, the slow reaction by the sector to various trends in the global market has affected its global competitiveness. The country needs to adapt new pineapple varieties which are preferred by many consumers in the global market. Bananas, mangoes and cabbages are also grown in the country and they need to be made more competitive in the international market. Major Issues in Agricultural Sector Ghana’s agricultural sector needs to be improved to reduce large sums of money spent on food imports. More attention needs to be directed towards improving the quality of crops produced to ensure Ghana’s agricultural sector has a competitive advantage over other countries. The country needs to improve its processing capacity to add value to its agricultural products before they are exported. The government needs to set up manufacturing zones for various products to increase job opportunities for the unemployed in the country. The rates of inflation in the country are very high and they have affected the exchange of the local currency, the Cedi compared to other international currencies. The country needs to look for ways to reduce its trade deficit to ensure it gets more foreign currency inflows to stabilize its local currency (Breisinger 2008, p. 98). Ghana also needs to put into place sustainable development practices that take note of the environment. The country’s agricultural sector needs to be institute policies that encourage farmers to adopt more innovative farming methods which do not put pressure on land and water resources. Farmers should also be encouraged to form cooperatives to enable them market their crop produce in the market more effectively. This will help them pool resources to improve harvesting, storage and transportation of various crops to their respective markets. The country also needs to make credit more available to farmers and other agri-business enterprises to enable them improve the quality of their work processes (Boon & Ahenkan 2004, p. 87). This will enable farmers to move from traditional forms of farming to modern farming methods which are aided by technology. PEST Analysis Political: Ghana is politically stable compared to other countries in West Africa. It is ranked 5th and 64th in Africa and the world respectively on the Transparency International least corruption index. It is divided into ten main administrative regions which are further sub-divided into 216 districts, which have district assemblies that run their affairs. Economic: Its economy is classified as a lower middle income economy and it is also categorized among Africa’s emerging economies. It is the 9th largest economy in Africa and the 2nd largest economy in West Africa. It was ranked as the fastest growing economy in the world in 2011 (Country Profile: Ghana 2012). Agriculture employs more than 50% of the population though it contributed 27% of the GDP in 2012. Less developed industrial sector which makes the country to exports mainly primary products. High inflation and interest rates have pushed up the cost of living. Major modes of transport are road and marine transport. Social: Social hierarchy is a large influence on the respect a person receives depending on wealth and cultural influence. Rapid population growth rate is one of the main factors contributing to high poverty and unemployment. Illiteracy rates estimated at about 30% of the total population. Total population estimated to be 25 million people according to 2012 estimates. Technology: Traditional forms of farming are still practiced which limit the growth of the agricultural sector. The country has one of the leading ICT sectors in Africa. References Aryeetey, E, Harrigan, J, Nissanke, M 2004, Economic reforms in Ghana: the miracle and the mirage, Sage, London. Boahen, P 2007, Conservation agriculture as practiced in Ghana, African Conservation Tillage Network, Accra. Boon, E & Ahenkan, A 2008, Enhancing food security and poverty reduction in Ghana, Grin Verlag, Berlin. Breisinger, C 2008, ‘Agriculture for development in Ghana: new opportunities and challenges’, IFPRI Discussion Paper 00784, Washington D.C. Chamberlin J 2008, It's small world after all: defining smallholder agriculture in Ghana, International Food Policy Research Institute, Michigan. Chamberlin J 2007, Defining smallholder agriculture in Ghana: who are smallholders, what do they do and how are they linked with markets?, International Food Policy Research Institute, Michigan. Codjoe, SNA 2007, ‘Supply and utilisation of food crops in Ghana, 1960-2000’, African Journal of Food, Agriculture, Nutrition and Development, vol. 7 no. 2, pp. 1-15. ‘Country profile: Ghana’ 2012, Economist Intelligence Unit, London. ‘Fasdep II’ 2013, Ministry of Food and Agriculture, Ghana, Accessed 24 November 2013, . ‘Ghana economic outlook’ 2013, AFDB, Accessed 24 November 2013, Accessed 24 November 2013, . Pearson, CJ, Pilgrim, S & Pretty, JN 2010, Urban agriculture: diverse activities and benefits for city society, Earthscan, London. ‘Pineapple market intelligence report: January – December 2007’ 2008, Federation of Associations of Ghanaian Exporters, Accra. Vigneri, M 2007, Drivers of cocoa production in Ghana, Overseas Development Institute, London. Vigneri, M & Santos, P 2007, Ghana and the cocoa marketing dilemma: what has liberalization without price competition achieved?, Overseas Development Institute, London. Wolter, D 2008, Ghana: where agriculture is becoming a business, OECD Development Centre, Paris. Read More