18 June 2018
An in-depth look at the sector’s economic role in the past, present and future with Agricultural Economist and General Secretary of the General Agricultural Workers Union, Edward Kareweh.
I t is an undeniable fact that agriculture plays a vital role in any economy as increased agricultural productivity tends to boost overall growth by way of job creation, foreign exchange etc. – due to its extensive value chain.
According to the Inter-American Institute for Cooperation on Agriculture (IICA), one way of visualizing the contribution of agriculture to development is by measuring forward linkages with other sectors of the economy. Forward linkages mean economic activity generated beyond the farm as products move along the supply chain to final consumers.
In the case of Jamaica, for every dollar generated on the farm, 55 cents goes directly to primary consumption, in a sense, missing opportunities along the supply chain to add more value. Only 16 cents per dollar goes to the processed food sector, 12 cents to hotels and restaurants while 9 cents per dollar is exported.
A similar exercise, IICA says can be done with backward linkages or the valued added generated in sectors that served as the source of inputs and services for agriculture (chemicals, transportation, financial sector etc.). For a developing country like Ghana looking to transform its economy on the back of an umbrella policy dubbed “Ghana Beyond Aid”, agriculture has been singled out as key.
It begs the question, how best could agriculture drive this especially against the backdrop of the continuous decline in its contribution to GDP in recent years? For some answers the Vaultz Magazine engaged Agricultural Economist, Edward Kareweh who doubles as the General Secretary of the General Agricultural Workers Union (GAWU) of the Trades Union Congress (TUC), Ghana.
AGRICULTURE AS A TOOL FOR JOB CREATION
Agriculture in Ghana has over the years been undertaken mainly by rural folk as a subsistence activity rather than a commercial venture – despite being the backbone of the economy for years.
The sector has, thus, been unattractive to especially the educated youth who could apply their academic knowledge to boost productivity. The Agricultural Economist believes this trend could be reversed to help reduce the high unemployment levels in the country if government makes agriculture attractive as a business by way of policies.
“The young men and women are so intelligent and know what they want. You can’t force them into agriculture. Just ensure there is good market for agricultural produce whilst creating a conducive environment for people to venture into agriculture. Agriculture provides jobs for all including even the lowlevel labor force.
Ghana has a very young population that are largely unskilled. So to get jobs for such persons, agriculture is critical and that’s why agriculture remains important in all economies aside from providing raw materials, food etc.” he stated.
We are mismanaging our lands. The arable lands are reducing and falling in the hands of estate developers.
As in any other endeavor, human capital is critical in growing the sector – prompting calls for recruitment of more extension officers. Currently, the extension officer to farmer ratio is 1:1500 – compared with 1:500 standard by the Food and Agricultural Organization (FAO).
In a bid to bridge the gap, the current government in 2017 lifted the ban on employment of extension officers – recruiting approximately 3,000 more to support the Planting for Food and Jobs programme.
AGRICULTURE FOR ECONOMIC TRANSFORMATION
According to Mr. Kareweh, for a developing country like Ghana also seeking to put its economy on a higher pedestal, the role of agriculture is non-negotiable. “Even in developed economies like Europe and America still spend billions to subsidize agriculture because they deem it critical.
For a developing economy, agriculture is almost everything because it provides not only employment but also the raw materials for industries. Agriculture is therefore critical because, if you spend 1 dollar in agriculture, the proportional return is far higher than spending it in other sectors of the economy,” he revealed.
He therefore wants government to exploit this potential by first establishing a broader national economic development plan which clearly spells out the role of agriculture. “Because Ghana is already largely an agrarian economy, we should use agriculture as the foundation of development.
Other developing countries that are largely oil producing countries may want to use oil. Even though Ghana is now also an oil producing country, our comparative advantage is in agriculture and not oil because we have the natural factors like climate and good soils we can leverage,” he explained.
Mr. Kareweh however insists, this is still insufficient. “Let me give you the present statistics. According to the ministry itself, over 80% of the about 3000 existing extension officers have just about 3 years to go on retirement. The new recruitments are therefore certainly not a bad start but still not enough.
If you look at the magnitude of the problem, then, it’s just a drop in the ocean,” he stated. “Also, these new-recruits are not actually officers as they were picked from the Youth Employment Agency (YEA) and so may not be able to play the role properly because of lack of experience and motivation as they don’t have the same conditions of service like the real extension officers.
It’s also like a stop gap measure for the Planting for Food and Jobs transition – not fully integrated into the ministry” he revealed. “Again, we have to rethink agriculture all together. Without seeking to suggest that other sectors like health and education do not deserve the treatment that government is giving them today, it only points to the fact that government’s attention is more on those sectors than on agriculture.
For instance, nurses are not only seen as professionals but allowances for their undergraduates have also been restored. We have just a few agricultural institutions in this country with a small student population yet without any such subsidies or allowances.
Also, graduates from agricultural institutions have no automatic employment unlike their counterparts in the education and health sectors. But if you see the agricultural sector as the backbone of the economy, it will reflect in the policy direction because if you go and employ YEA recruits and give them a package that is not good enough, then you certainly are not encouraging them to go into agriculture,” he added.
Land is another factor critical for increased agricultural productivity. Mr. Kawereh is worried some recent economic developments are negatively affecting land availability for agricultural production which requires immediate policy intervention.
“We are mismanaging our lands. The arable lands are reducing and falling in the hands of estate developers. Now, it is difficult to get a stretch of a thousand hectares of land without a house or two in between. For example drive on the Cape Coast stretch and see.
Yes, we need houses to live in but it’s not every land that we should use for estate development. The soil fertility is not the same, so we should, as a country differentiate between lands for agricultural purposes and that for estate development.
In the next 10 years if there are no lands but fantastic policies, what are you going to do? Are you going to grow the crops in the space? Mr. Kareweh questioned. The GAWU General Secretary also lamented how small scale mining is also gradually taking over farmlands and dreads the threat it poses to agriculture. “It is a very serious situation.
The cost of even reclaiming the land is so huge that we should have even been using that money to create jobs. Cocoa lands are also even being sold for mining. The way forward is to sustain the anti-galamsey campaign while enhancing legislation with more punitive measures.
It is also a multifaceted area which requires a concerted approach to effectively address,” he emphasized.
AGRICULTURE’S CONTRIBUTION TO GDP
Notwithstanding its economic potential, Agriculture has been declining in the last few years – consequently losing to the services sector its position, as the highest contributor to the country’s GDP.
The Agricultural Economist however describes this as expected – explaining that, once an economy develops, agriculture’s contribution to GDP is also anticipated to decrease for industry to take over and spearhead economic growth.
According to him, agriculture losing its status as the highest contributor to GDP should therefore not necessarily be of concern as opposed to what caused it. “Unfortunately the decline has not been because we are now processing more or industry is growing.
When you have the forward and backward linkages well integrated, agriculture will decline and even offload its labour force to industry which will invariably then grow. So, you have that organic relationship which is good. For a resource-rich country like Ghana, this should have been the normal trajectory compared with another country not endowed with resources and therefore can allow the services sectors to lead growth.
So in our case it’s an abnormality and need to try and correct it,” he explained. He blames the anomaly on reduced investment in agriculture and promotion of imports. “Banking, insurance and other financial services are offering their loans and services to importers rather than producers because of the decline in local manufacturing.
The warehouses that have historically stored products from the domestic factories have been sold out and turned into churches as witnessed at North Kaneshie here in Accra. The remaining few too no longer house domestic goods but imported ones. It tells you that we are not producing to fill them.
This is not by accident. The 1980 Economic Recovery Programme and the 1990 Structural Adjustment Programme which were hailed by the World Bank and others fundamentally made us liberalize the economy to cause these,” he averred. He however disagrees with suggestions that the services sector over-taking agriculture in terms of contribution to the GDP disproves the pivotal role agriculture has been hailed to play in economies.
“This gives impetuous to advocates of the services sector to call for more investments in that sector at the expense of agric. But the difference here is that, the growth in the services sector hasn’t created the type and number of jobs required.
The movement from the rural to urban areas and the social vices witnessed in our cities today are all because these people have come to look for jobs. So the argument is that, take the jobs to them where they are. That is what agriculture can do but services doesn’t necessarily because it is concentrated in urban areas,” he emphasized.
The Agricultural Economist maintains, Ghana thus has no option but to still prioritize agriculture as the foundation of the economy. “As things stand now, we have no choice than to look at agriculture as backbone of the economy and that is why government’s focus on agriculture is commendable. The only option for us today, is to use agriculture to build industry and stabilize our economy,” he noted.
NEED FOR A PARADIGM SHIFT
Successive governments have over the years rolled out several policies to boost the agriculture sector. Many industry watchers however believe even though some of the policies have yielded positive results they have yet to make the desired economic impact.
Despite implementation of such policies over the years, agriculture continues to decline in terms of its contribution to GDP – which the services sector currently leads. This, many industry watchers believe is only a reflection of the lack of consistent well-coordinated policies and investments for the agriculture sector.
According to the General Secretary of GAWU, the longstanding woes of the sector are as a result of not only the lack of adequate policies but the failure to implement existing policies to the letter. “The policies as they stand are very good, the implementation is what Ghana needs to work on for the desired results.
So, we need an attitudinal change in how we also develop and implement the policies – which has largely been at the corridors of public officials. We need to also look for experts who can contribute significantly to policy development” he advised. “We also need to improve on policy governance and coordination so that people can own and integrate the policies in their lives rather than feel they have been imposed on them.
That is, the policies over the period have been largely top-down driven – prepared by government and imposed on the actors. But policy makers must consider the farmers as well because they know their system, challenges and priorities better” he added.
PLANTING FOR FOOD AND JOBS POLICY – A CASE IN POINT
The Planting for Food and Job Campaign is a five (5) year policy introduced by the current government to turn around the declining fortunes of the agriculture sector. Launched in April 2017, the policy involves an investment of 125 million Canadian dollars in improved seeds and extension services for farmers of five (5) main crops including maize, rice, sorghum, soybeans and vegetables.
According to the Minister for Food and Agriculture, Dr. Owusu Afriyie Akoto, the programme in its first year of implementation produced a total crop value of GH¢1.2 billion whilst creating a total of 745,000 jobs, mainly in the rural economy.
This, he attributed to the use of labour, improved seeds and fertilisers combined with increased extension service delivery in the production of an additional 485,000 MT of maize; 179,000 MT of rice; and 45,200 MT of vegetables. The initiative at its initial stage of implementation however had its fair share of challenges like farmers clashing with government over the repayment terms for the subsidized inputs.
A number of stakeholder groups like the Institute of Statistical, Social and Economic Research (ISSER) and the Peasant Farmers Association of Ghana (P-FAG) also expressed dismay over the lack of stakeholder engagement in the rollout among other concerns. Edward Kareweh says the implementation has been largely successful by far but not without the usual challenges associated with such policies.
According to him, the initiative may not yield the desired results unless the challenges are comprehensively addressed with a holistic policy framework. “You can’t use the Planting for Food and Jobs policy alone to transform the country’s agricultural sector.
The policy as it stands targets only the crop sub-sector at the expense of other sub-sectors. The good and important part however is that, it’s targeting the largest subsector which means it is going to reduce poverty. But that is not enough.
For instance, if you take cash crops like oil palm, cocoa and rubber, how would the programme boost their production? The relationship is not much,” he bemoaned.
THE WAY FORWARD
According to the Agricultural Economist, creating deliberate linkages between the Planting for Food and Jobs programme and livestock production is key.
“Such a link does not come automatically but must be deliberately created and nurtured. The policy does not have such deliberate linkages and that’s why while the Minister for Agriculture is saying that the programme has resulted in a bumper harvest, poultry producers are also crying that maize is not only scarce but expensive on the market.
If we’ve had a bumper harvest of maize, how come the price of the crop is going up instead of coming down,” he lamented. Mr. Kareweh insists market forces are largely accounting for this disparity and only targeted policies could address the situation. “It is all about demand and supply. In Ghana, we don’t have stable prices.
But such developments can be controlled with policy.” he said. He adds that such linkages when properly established would not only create a ready market for the crop farmers but also boost production in the other subsectors and ultimately help address some of the major constraints of agricultural production in Ghana.
“We must ensure that once we increase production, a part of it is deliberately allocated to other sub-sectors. For instance we should link the programme with the poultry industry so that they can tell the farmers what type and quantity of maize should be produced to prevent over production whereby it would go waste to affect the fortunes of the farmers,” he disclosed. “One of the major challenges with the agricultural sector is that, it’s difficult to predict the market; you don’t know who is producing what.
So we need to reorganize the agricultural sector in such a way that we can have data to say how much will be coming from which particular ecological zone and so on. We can then ascertain which market we are sending that produce. Because, remember agricultural produce are bulky and perishable so the market must be close to the producer in order to reduce post-harvest losses which has been another bane of the sector’s growth as up to 35%, in some cases 60%, of produce go waste,” he said.
The General Secretary of GAWU however insists though welcoming, the Planting for Food and Jobs programme is not necessarily the panacea for the agricultural sector’s woes – adding that its sustainability too will depend on a number of factors. “Sustainability will come in a number of ways.
If government’s commitment to provide resources and on time continues into the future, then that part of sustainability is guaranteed. Beyond that, government will have to also look for other funding sources as the project expands.
For example, last year the project was only targeting 200,000 farmers and in 2018 it’s targeting 500,000 farmers and that means resource allocation will have to be more than double. So government will have to find other funding avenues to create that sustainability,” he advised.
INVESTMENT IN RESEARCH AND TECHNOLOGY
Edward Kareweh is of the view that Ghana is making steady progress in terms of adoption of technology in agriculture but more needs to be done to boost policy implementation. “You can see that we are beginning to accept the fact that technology is critical for the sector.
For instance, we’re now using the electronic systems to register and create database of farmers under the Planting for Food and Jobs programme” “Following implementation diligently to the end is not going to be done by human discretion alone.
Technology will make those given that responsibility efficient, ensure they don’t circumvent the system and also ensure the inputs are utilized the way they are supposed to be,” he noted.
Research is also key in finding for solutions to challenges that have bedeviled the sector for years. “Research is a continuous activity. What we have seen over the period is that we have not actually utilized the many agricultural research findings by the research institutions. For instance, they have developed many varieties of crops and so on but yet to be implemented,” he revealed.
AGRICULTURE AND “GHANA BEYOND AID”
The current government’s “Ghana Beyond Aid” agenda towards economic growth has made agriculture development even more crucial. Government has in this light reiterated its commitment to revolutionize agriculture by way of policies directly linked to agro processing. Mr. Kareweh describes the agenda as only a clarion call for massive development of the agriculture sector through stronger synergies between the government and the private sector.
“The agenda is crucial for economic development even though many still don’t know its parameters. Agriculture is mainly a private sector business with farmers as the main drivers. So once we’ve initiated a programme like the One-District, OneFactory which is to be largely private-sector driven, the factories could be given some tax exemptions, concessions and facilities to efficiently produce and compete with the imports” “Government must also help in the search for foreign markets for the domestic producers – that’s why it has diplomatic missions in other countries.
So, that burden is taken off the domestic producers before it unduly increases their costs and ends up shooting the price of their products up and making them uncompetitive against imported products”. He also impressed on government, the need to institute countervailing measures to deal with trade policy implementation undermining domestic production.
“Our trade policies are supposed to enhance domestic and industrial production. It is only when you cannot produce a particular commodity sufficiently or at all that you import. But if imports become the main source of supply when you have the potential to produce then it becomes a challenge” “If you talk about rice, there’s so much cheap imports in this country.
So, even if you increase local rice production you won’t get the market. If you produce rice in Ghana, it’s supposed to be cheaper but it becomes otherwise because you still need to mill it, bag it, process it and advertise it and all that is additional cost.
If you are not efficient in all these, you will be crowded out in the market because the cheap import come well packaged and also well-advertised. It’s not about just producing something that is good but also marketing around the world,” he concluded.