Agric sector still not out of the woods …as Q1 growth takes a nose dive

Agric has long been a sector that has seen disappointing growth, but things seemed to have turned around in 2017 when growth jumped from 4.2 percent in the second quarter to 9.8 percent in the third quarter, and further grew at 8.5 percent in the last quarter.

It was then expected that the sector would continue in that trajectory this year, especially with the ongoing roll-out of some policy intervention programmes like Planting for Food and Jobs.

However, the first quarter performance report of the economy released by the Ghana Statistical Service (GSS) has shown the agriculture sector has once again fallen into the ditch, with growth sharply plummeting to 2.8 percent.

The situation is even more dispiriting when compared to the other two major sectors’—industry and services—contribution to GDP.

In the third quarter of 2017, as industry and services were contributing 24.3 and 52.4 percent respectively to GDP, agriculture also contributed 23.3 percent. And in the fourth quarter, industry and services contributed 24.8 and 52.3 percent while agriculture also recorded a 22.9 percent contribution to GDP.

But a look at the first quarter of 2018 figures show that industry and services contributed 27.5 and 60.6 percent respectively, whereas agriculture’s contribution was only 11.9 percent – a more than 50 percent drop from the figures recorded in the previous two quarters.

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The GSS data further show that fishing is the main drawback in the agriculture sector, as it is the only subsector experiencing contracting growth. The sector recorded a miserable -8 percent growth compared to the other subsectors—livestock, crops, forestry and logging—which all recorded expanded growth.

Livestock grew at 5.5 percent, crops 4.6 percent, and forestry and logging 1.6 percent in the first quarter. Even though these growth rates are not very impressive, they are at least in the positive as compared to the fishing subsector that is in the negative.

These analyses indicate the agriculture sector is not out of the woods yet; and it further highlights that many challenges are blighting prospects in the sector.

A recent study by the University of Ghana Business School. dubbed ‘The Ghana Business Development Review’, has outlined some challenges which have retrogressed the growth of agriculture over the years.

According to the report, changes in climatic conditions, land acquisition problems, escalating price of fuel, and shortages of fertiliser and agriculture inputs among other things have been the sector’s main challenges.

“Climatic conditions affect the sector seriously, because Ghana chiefly relies on rainfed agriculture. The recent changes in rainfall patterns are gradually ruining the fortunes of businesses in this sector…setting up irrigation systems is capital-intensive.

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“Escalating prices of fuel, fertiliser and agricultural inputs are other major challenges faced by agribusinesses. These are factors which cannot be controlled by agribusinesses themselves,” it stated.

“The proliferation of real estate companies and the up-springing of new buildings are depleting peri-urban farming lands. This phenomenon has also increased the cost of land in these areas, as well as in the rural areas.

“The issue of post-harvest losses is another challenge to farmers. Farmers do not have the skills to preserve their produce, and these services are not being offered on demand,” the report adds.

To address some of these challenges, government in collaboration with the World Bank is currently implementing the Ghana Commercial Agriculture Project (GCAP).

The project’s objective is to improve agricultural productivity and production of both smallholder and nucleus farms in selected project intervention areas, through increased access to reliable water, land, finance and agricultural inputs, and output markets.

The Project’s focus is on the entire commodity value chains of maize, rice, soya-bean, fruits and vegetables. The thematic areas of the GCAP project include strengthening investment promotion infrastructure, improved access to land, improved access to reliable water, inclusive commercial agriculture, and effective project coordination.

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