Can ‘Marshal Plan’ be the game-changer for agric?

The country’s agriculture sector, which is the largest employer of the workforce and touted as the backbone of the economy, has not lived up to expectations...

The country’s agriculture sector, which is the largest employer of the workforce and touted as the backbone of the economy, has not lived up to expectations.

For years the sector’s growth has dwindled, making its contribution Gross Domestic Product (GDP) meagre.

In 2016 the agric sector grew by just 3.6 percent, while the services sector grew by a significant 5.9 percent, and to 7.7 percent as at the end of first quarter 2017.

The latest quarterly GDP report released by the Ghana Statistical Services (GSS) shows that the agriculture sector’s growth has dropped to 3.4 percent.

In an effort to turn around the fortunes of the once vibrant sector, the Akufo-Addo-led government has introduced various programmes and policies which it hopes can do some magic in the sector.

One of the first initiatives under the sector to be rolled out is the Planting for Food and Jobs Programme, which was launched in April this year by President Akufo-Addo. The programme, government says, is expected to create 750,000 jobs and add GH?1.4billion to the rural economy.

Government also plans to build a dam in every village in northern Ghana, under a programme christened ‘One Village, One Dam’.

A few days ago, Vice President Mahamudu Bawumia announced that a “Marshall Plan for Agriculture (MPA)” is to follow, to take the aforementioned initiatives into a higher gear.

“The programme, according to Dr. Bawumia, will focus on ramping-up investments under the flagship ‘Planting for Food and Jobs Programme’, channel investments into improved seeds, subsidise fertiliser, and provide storage, among others.

Another key feature of the MPA will be the removal of duties on agro-processors’ equipment and machinery, as well as implementation of a grant-funding facility for agribusiness start-ups.

The Marshall Plan for Agriculture, the Vice President said, will be unveiled in next year’s budget, expected to be read by mid-November.

Dr. Bawumia also stated that the Marshall Plan has already identified some key road projects that will be constructed in selected food producing areas across the country.

“Implementing the Marshall Plan for Agriculture will lead to structural transformation, which in turn will catalyse economic activities and connect major sectors in the Ghanaian economy. It will lead to higher farmer incomes, value addition, jobs and the opportunities that come with being globally competitive,” Dr. Bawumia said.

As to whether these interventions and policies will be the agriculture sector’s game-changer remains a matter to be discussed in the future.

History of agricultural sector performance

In the second quarter of 2011, while industry and services sectors were growing at 42.5 and 12.1 percent respectively, the agriculture sector grew at a measly 1.8 percent.

It was even worse in the third quarter of that year when it grew by 0.6 percent, whereas the industry and services sectors grew at 54.4 and 8.6 percent respectively.

The situation got worse in 2012, when growth plummeted into the negatives – at -0.7, -5.1, -1.1 percent for the first three quarters.

Growth, however, improved significantly in the fourth quarter of that year when, for the first time since 2012, it surpassed the other sectors, growing by 9.8 percent compared to 2.3 and -2.8 percent respectively for industry and services.

Confidence in the agriculture sector was then revived when it grew astronomically in 2013, recording 24 and 50.8 percent respectively for the first two quarters.

It was expected that the sector would continue that trend and take over its position as the largest contributor to GDP. Sadly, growth took another sharp and surprising nose-dive to -12.6 and -0.6 percent in the last two quarters of 2013.

The negative growth continued in 2014 until it took another surprising U-turn in the third quarter, recording a 28 percent growth - with industry and services hitting 4.6 and 9.1 percent respectively. Again, it plunged from 28 percent to 6.9 percent at the end of 2014. The highest growth recorded since has been the 7.7 percent for quarter one of 2017.

Funding woes

Financing has been a major barrier to growth in the agriculture sector, as lenders see it as a high-risk area due to its largely rain-dependent nature. To lure banks into the sector, the Bank of Ghana in October 2016 launched the Ghana Incentive-Based Risk Sharing System for Agricultural Lending (GIRSAL), which is providing a GH¢100million guarantee for lenders to the agric sector.

The objective of GIRSAL, the BoG said, is to reduce overall risks in agricultural financing to boost agricultural production, productivity and export, with the aim of increasing foreign exchange earnings, supporting import substitution, and promoting economic growth.

Source :

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