Agriculture Analysis On The 2017 Budget – Ilapi – Ghana

By:  Peter Bismark Kwofie

Agric Minister Dr. Akoto Osei


The solution of the NPP’s government to a seeming declining agricultural sector in the #Budget2017 is to modernize the sector and to improve productivity. Measures outlined, inter alia include: Provision of improved seeds; supply of fertilizers; provision of dedicated extension services; marketing and E-agriculture; and monitoring.

The measures indicated how much fertilizer will be supplied to achieve this objective, 180,000 metric tonnes for the year. It also indicated it will import improved seeds to augment the program. However,

1. One question here is why import improved seeds to augment? Improved and certified seeds could be obtained from MoFA, our universities and other research institutions like the CSIR.

2. No specifics were provided as to how much of these seeds will be supplied? How many Agricultural Extension Agents (AEAs) will be trained, recruited or deployed to various stations across the country for this program?

3. How are the goods in question going to be marketed, by which means, is it that government itself will deploy buyers at farm gate to buy these goods? Are the produce going to be sold processed or in raw form?

4. Any plans in place to arrest postharvest losses, which is one major challenge for farmers, especially those producing cereals? What of packaging?

5. In terms of monitoring, how is it going to be done/achieved? How is progress going to be measured and evaluated?

6. Most importantly, the budget did not indicate how much it will cost to achieve each of these objectives. No detail information and specifics were shared on this.

7. The budget also did not provide specific timelines to achieve each of these objectives.

Main Focus: The Planting for Food and Jobs Program.

This is to encourage all citizens (both urban and rural) to take up farming as a full or part-time activity. It is intended to structure it along the lines of the erstwhile “Operation Feed Yourself”(OFY) programme in the 1970s under Acheampong’s regime. The program is envisaged to provide jobs to about 750,000 people. This is laudable initiative.

This program will ensure all year food production, improves food security, curb food shortage, provide jobs, improve family income, improve livelihoods, ensures judicious use of land resources, etc. This program is similar to that used in urban agriculture. Countries such as Cuba, for example, successfully used urban agriculture as a means to evade food shortages (See Murphy, 2004), while many developing countries have long been farming within cities and towns for income and subsistence (See Nugent, 2001). Strong institutional efforts and technical assistance will be needed to achieve this.

1. Cost details were not provided.
2. How did they arrive at conclusion of 750,000 jobs?

3. The other projection of 30 percent from current production levels, rice by 49 %, soybean by 25 % and sorghum by 28 %.

4. How did these projections come about when there was no mentioning of the costs involved?

5. No investments plans made for the livestock sector?

6. No plans of irrigation facilities and investments to increase acreage of farmlands?

7. No allocation made for climate smart agriculture initiatives and investments to boost production for farmers especially in the face of climate change? This is another external shock facing the agricultural sector. Climate change, leading to delayed and erratic rain pattern in some parts of our agricultural industrial areas, and this natural phenomenon has affected agricultural output drastically.

8. Access to credits by farmers? This is a major issue facing farmers. The budget failed to elaborate on that but still seeking to subsidize farm inputs in the short term.

9. How much allocation made for research initiatives towards achieving these objectives?

10. Introduction of Genetically Modified Organisms (GMOs). The budget failed to tackle the GMO situation and its commercialization in the country. One major concern is that the importation of the said improved seeds would lead to introduction of GMOs into the country. Farmers and the general public are ignorant of these GMOs and would there be public education on this mystery seeds before it implementation?

The Ghana National Biosafety Authority has issued Guidelines on handling requests for the use of GMOs in Ghana. This is in accordance with Section 40(3) of the Biosafety Act, which mandates the Authority to issue guidelines on its operations. This was not captured in the budget as to how the regulation would be carried with cost and evaluation tendencies. The plant breeder bill has faced a lot of heckles in the years with civil societies asking for further amendments to avert certain uncertainties. The procedures that any individual or entity need to go through in requesting approval to undertake confined field trials, commercialise, import and export GMOs out of the country needs a better education to sensitize the populace. This obviously denotes that, no matter how the agitation to GMOs in the country, the government would still legalize it use.

The Council for Scientific and Industrial Research is currently undertaking field trials of GMO cotton, cowpea and rice as part of approval procedures before they could be released onto the market. However, information getting to the desk of the Institute for Liberty and Policy Innovation is alleged that there are cabalistic distributions of GMO seeds to farmers in some parts of the country even though commercialization has not begun.

Agriculture has been the principal sector for the development and growth of the economy in the past years. The contribution of agriculture to GDP in the other years is: 2010 – 29.8%, 2011 – 25.3%, 2012 – 22.9%, 2013 – 22.4%, 2014 – 21.5%. It dropped from 31.8% in 2009 to 29.8% in 2010, representing 2% GDP contribution lost. In 2011, agriculture’s contribution dropped by 4.5% to 25.3% while 2012 recorded a 2.4%.

The year 2013 recorded a 0.5% drop in the contribution of agriculture from 22.9% in 2012 to 22.4% in 2013. Total spending on Agriculture Modernisation in 2015 amounted to GH¢27.04 million against a budget of GH¢30.57 million. Of this amount, spending on Food and Agriculture infrastructure amounted to GH¢26.24 million. This was particularly for the construction and rehabilitation of dams and irrigation infrastructure and fertiliser subsidy.

Additionally, GH¢0.80 million was advanced towards the construction of the Fisheries College and aquaculture development. On the food, which food programs were carried out? Are there any national food storage facilities? NO! We stand to be corrected. Subsidies are medieval, a negative sum transaction and enables government spending and corruption. It would be good to bring into light the allocated amount for fertilizer subsidies, including how many farmers benefited and the outcome of this welfare practice.

The Agriculture Sector is expected to record an average growth rate of 3.3% in the medium term from the 2017 Budget. The Sector is expected to record a growth of 3.5% for both 2016 and 2017, declining to 3.0% in 2018. This may not be able to accounts for about 40% of GDP and generates 60% of foreign exchange earnings in the medium term. What we produce may feed the one-district-one-factory projects and the quality of the finished produce may or may not attract export. Government cut its 2016 expenditure on the sector by GHC40 million despite growth in the sector stalling to 0.04%.

In 2015 government’s budgeted expenditure on the agricultural sector is GHC395.19 million while for 2016, GHC355.14 million was been budgeted, indicating a 10.1% decrease. By the end of September 2015, GHC91.54 million had been spent out of the GHs395.19 million budgeted. Out of the GHC91.54 million spent, about GHs82.57 million of this actual sector expenditure, representing 90.21%, was spent on poverty-focused expenditures and still there is poverty.

There are lots of activities that go on in the service sector better and more than the agricultural sector shifting the goal post to the former. Agriculture was the main source of growth and foreign exchange until when oil production replaced it as the cornerstone of growth for the formal economy. In 2015 the GDP growth of the service sector accrued GHs17,470.0 million and agriculture once the backbone and mainstay of Ghana’s economy made GHs 7,365.o million.

The Industry Sector is projected to record an average growth rate of 13.2% in the medium-term, the highest rate among the sectors. The Sector is expected to grow by 17% in 2016, 18.3% in 2017, and 14.3% in 2018. If the growth of industries demand exceeds the productions of raw materials from the agricultural sector, local industries would have no option than to import raw materials to meet the deficits.

In 2015, GDP from Manufacturing in Ghana was GH¢ 2,288.0 million which is far below that of agriculture GH¢7,365.0 million. However, industrialization is expected to increase and would put pressure on raw materials from our farms. We export more of our raw materials than we import and this may intern lead to the importation of raw materials for our industries. Care must be taken not to get it twisted. Switzerland exports finished products such as pharmaceutical products, tools and equipment and vehicles to Ghana whiles we export raw materials such as Gold, cocoa and Cashew nuts. To digress, in 2014 alone, the volume of trade between Switzerland and Ghana hit $1.8 billion and has since been rising every year. Within the same period, Ghana imported $14.8 billion, making it the 87th largest importer in the world. Ghana imports tones of snails, and fresh vegetables from its regional neighbours. The budget failed to address importation except that of fingerlings.

Over the last five years, the imports of Ghana have increased at an annualized rate of 13.7% from $7.8 billion in 2009 to $14.8 billion in 2014 and about 70% are finished goods. Switzerland imported over $2 billion worth of gold from Ghana in 2016 alone for conversion to finished products for the world market. This shows an overwhelming increase of about $90 million dollars over the 2015 figure of $1 billion. The new government must endeavour to stabilising the economy and laying the best foundation for a sustainable, accelerated and job creating agro-based industrial growth.

In Ghana, the Government’s role in agriculture over the years has been extensive as reflected in the public expenditures and programmes until the adoption of the Structural Adjustment Programme in 1983. During that period, prior to the Sector Agricultural Policy (SAP), the BOG initiated a number of projects in line with the intervention policies of the day, intended to boost the agricultural sector of the economy. These policies led to the implementation of agricultural development schemes such as the Cocoa Bill Financing Scheme, Grains Bill Financing Scheme, Grains Warehousing Company. Other Bank of Ghana Agricultural projects include, Shai Hills Cattle Ranch, Agricultural Development Company (ADC), Wulugu Livestock Company, and the Jukwa, Okumanin, Fosu and Akwamsrerm (JoFA) Project. With the exception of the JOFA project, which was partially successful, the other projects did not achieve their set objectives due to inappropriate policies adopted by their managements. (Agriculture Sector policy-BOG, 2003)

For the implementation of programmes and activities in the cocoa, livestock and the plant ecology in 2017, an amount of GH₵501,501,708.00 has been allocated. Out of this, GH₵322,094,227.00 is from the government of Ghana, GH₵4,065,650.00 is internally generated fund and GH₵175,341,831.00 is from Development Partners. Local Poultry production to meet domestic demand as against high imports of frozen chicken was silent in the budget. There were no estimated outturns on expenditure in the sub-sector. The Savannah Accelerated Development Agency (SADA) also failed to be mentioned as an agency to see to the implementation of major agricultural programmes in the Northern Sector. SADA is heavily donor funded as an autonomous agency to boost development with its action plan but their needs were absent to be addressed.

Most agricultural projects depended heavily on the Ministry of Agriculture mediatorships resulting in top-down planning and implementation, less satisfactory relevance and cost-effectiveness and poor ownership of the programmes by the beneficiaries. These ‘’monocultural’’ government interventions have taken place year after year and the 2017 budget failed to give meaningful structural operational system to avert the ulcerations. From the 2017 Budget, GH₵52,706,712.00 has been allocated for the fishery sector of which GH₵28,857,495.00 is from the Government of Ghana, GH₵11,875,210.00 is internally generated funds (IGF), and GH₵11,974,008.00 is from Development Partners. With this, an amount of $500 million is expected from the shrimps, Mollusca, clams and tilapia earnings and estimated amount of $42 million net savings in the aquaculture production. The central government is funding more than 50% of the allocated money to the ministry and about 26% from donors and 24% from IGF.

To ensure a lasting sustainability of new projects in a decentralized manner, with most of the planning, implementation and decision-making taking place at the district level, the private sector must be allowed to play a major role to squeezing out the best tasteful liquid from the rock.

‘’In 2016, the Ministry will rehabilitate public laboratories at Koforidua, Kumasi, Tamale and Ho’’. This is a 2017 budget and not 2016 and that care must be taken with what is written to allow for accountability. Fish extension service delivery will focus on disease detection, prevention and control particularly in the Aquaculture sub-sector. Setting a fishery laboratory in Koforidua is a misplaced priority. No fishing activities go on in the Eastern capital to have such facility. The Afram Plains and akosombo are where active fishing activities takes place. Why in Koforidua?

Agricultural growth might be slow this year due to the prevailing adverse macroeconomic conditions and the IMF conditionalities unless otherwise there is production incentives induced by the economic reforms, in the medium Term. The agriculture sector should not be used as means for poverty reduction strategy done in the past but Modernization of agriculture based on rural development, agribusiness focussing on domestic consumption and export , easy access to lands as in property rights, assisting the private sector to increase food production through facilitating extensions, research and financial services, and irrigation facilities and improving on the use of technology in giving soil, soil fertility, improved seeds and weather information and communication and means to economic freedom in the long term. A national land policy is needed to demarcate lands for agriculture and real estate developments.





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