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We see lowest Real GDP growth for Agriculture in a decade – Government

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Government is projecting the Agriculture Sector to record a Real Gross Domestic Product (GDP) growth rate of 0.7 per cent by the end of 2022.

Meanwhile, Cocoa as a subsector is set to decline by negative 20. 0 per cent.

The projections for the sector which was contained in the 2023 Budget Statement and Economic Policy is set to be the lowest Real GDP growth rate in the last decade for the sector as far as the 2013 constant prices was concerned.

Other subsectors such as Crops and Livestock, are projected to record a real GDP growth rate of 0.5 per cent and 1.5 per cent, respectively, while Forestry and Logging as well as Fishing are both expected to record a 1.0 per cent growth rate.

During the presentation of the 2023 budget to Parliament last Thursday, Mr Ken Ofori-Atta, the Minister of Finance, explained that the severe slowdown of the sector was driven in part by a sharp contraction in the cocoa subsector.

“However, recovery is expected to begin in 2023 and continue steadily into the medium term. Growth is projected at 2.6 per cent in 2023 and is expected to average 4.5 per cent over the medium term, based on projected growth rates of 2.8 per cent in 2024, 4.7 per cent in 2025, and 6.1 per cent in 2026,” he said.

He said the Government in that regard had outlined interventions to revamp the sector in the coming year.

These, Mr Ofori-Atta said, included support for large-scale agriculture and agribusinesses interventions through the Development Bank Ghana, selecting Agriculture, including Fisheries as Priority Area for Annual Budget Funding Amount (ABFA) of Oil revenue and the introduction of USD$400 million insurance package for farmers.

He said government would continue regulate the export of major staples, especially grains in 2023, to avoid shortages of the commodities in the local markets while increasing the credit guarantees to financial institutions for agriculture loans by GHS300.7 million.

He indicated that the Ministry of Food and Agriculture would among other things intensify efforts to promote the local production and use of organic fertilizers; initiate capacity building programme in Integrated Soil Fertility Management (ISFM) for farmers and release one million parasitoids as biological agents against Fall Army Worms.

“In 2023, the Ministry (Ministry of Food and Agriculture) will procure a total of 36,360 metric tonnes of various improved seeds and 366,435 metric tonnes of organic and inorganic fertilizers for distribution to 1.5 million farmers across the country at subsidised prices.

“Agribusinesses will be supported to complete documentation with participating banks for the disbursement of funds. In furtherance of the support for the rice value chain development, 13,000 hectares of rain-fed lowland rice fields will be mapped-out for development.” Mr Minister for Finance said.

Dr Charles Nyaaba, Executive Director of Peasant Farmers Association of Ghana (PFAG), in an interview with the Ghana News Agency, said the high fuel cost, sharp increase in fertilizer prices, and the failure to subsidise and pay fertilizer contractors on time, had contributed to underperformance of the sector.

He said the introduction of an insurance package for farmers at a time when farmers are downsizing, or abandoning farming completely was wrong.

“About 70 per cent of poultry farmers are currently not in business and the 30 per cent have scaled down their operations. So how will insurance lead to people coming in to produce and when there is risk you compensate them,” he said.

He urged government to rather focus on incentives that would encourage farming amidst the challenges of high cost of production.

Dr Nyaaba also called on government to carry out due diligence to ensure that substandard companies were not engaged to produce organic fertilizers for local farmers.

Mr Edward Kareweh, General Secretary of Ghana Agricultural Workers Union (GAWU), said government must work on resourcing and streamlining existing operational structures to promote proper coordination and prevent duplication of roles in the sector.

“It will be improper to prescribe new policy measures when existing structures are not supported to function well” he said.
The underperformance of the sector, he said, put the government’s flagship programme, Planting for Food and Jobs, under scrutiny.

“The planting for Food and Jobs programme which we have touted to be successful indeed was not successful in the sense that when we need food the most, there was no food,” he said.

He encouraged government to fully commit to selecting agriculture as a Priority Area of ABFA by investing in the productive capacity for basic commodities such as rice, tomato to reduce importation which continues to drain the country’s foreign exchange reserve.

Mr Kareweh also advised the government to invest in the poultry industry which he noted had forward and backward linkages in its value chain, adding that, “the industry is a market for Maize, Soya and other agriculture produce”.

Such an investment, he said, was keen to ensuring quality poultry food for citizens and a stable foreign exchange earnings.

“Government should be strategic in targeting foodstuffs that have huge impact on the economy,” he said.

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