Does ghana have agriculture government subsidies


Ghana: Ghana’s Agricultural Subsidy Program

Two key policies that will provide subsidies to farmers engaged in rice, corn, sorghum, soybean, and broiler production have been rolled out.Mar 17, 2022

What is the economic impact of Agriculture in Ghana?

The agricultural sector accounts for one-fifth of Ghana’s Gross Domestic Product (GDP), employs nearly half of the workforce and is the main source of livelihood for the majority of the country’s poorest households. Two-thirds of non-oil manufacturing depends on agriculture for raw materials.

What is the main export of Ghana?

The major export crop, cocoa, accounts for 20-25 percent of total foreign exchange earnings. Ghana accounts for about 20 percent of global cocoa exports and has an international reputation for high quality cocoa beans (which command a 3-5 percent market premium).

Is E-Levy the way forward for farmers in Ghana?

Minister of Food and Agriculture (MoFA), has called on farmers and Ghanaians as a whole to embrace the government’s proposed electronic levy (e-levy) which was announced in the 2022 budget statement by the Finance Minister, Ken Ofori-Atta, last month.

What is the agriculture sector policy note?

The Agriculture Sector Policy Note is based on a number of sector studies and reports prepared by the Bank to support the existing investment projects. The main audience for this note is MoFA and its development partners united in the Agriculture Sector Working Group (ASWG).


Does the government subsidize crops?

Out of all the crops that farmers grow, the government subsidizes only five of them. 1 They are corn, soybeans, wheat, cotton, and rice.

Who receives agricultural subsidies?

The federal government spends more than $20 billion a year on subsidies for farm businesses. About 39 percent of the nation’s 2.1 million farms receive subsidies, with the lion’s share of the handouts going to the largest producers of corn, soybeans, wheat, cotton, and rice.

What is the agricultural subsidy system?

An agricultural subsidy (also called an agricultural incentive) is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.

How does agriculture contribute to the economy of Ghana?

Agriculture contributes to 54 % of Ghana’s GDP, and accounts for over 40 % of export earnings, while at the same time providing over 90 % of the food needs of the country. Ghana’s agriculture is predominantly smallholder, traditional and rain-fed (SRID, 2001).

What government subsidies are available?

The U.S. government grants subsidies to many industries including oil, agriculture, housing, farm exports, automobiles, and health care. Some economists are opposed to government subsidies, believing they end up doing more harm than good in the long run.

Do farmers get paid to not grow crops?

The U.S. farm program pays subsidies to farmers not to grow crops in environmentally sensitive areas and makes payments to farmers based on what they have grown historically, even though they may no longer grow that crop.

Why do rich countries subsidize agriculture?

TORONTO (Thomson Reuters Foundation) – Rich nations are spending $250 billion (161.76 billion pound) annually subsidizing their agricultural sectors to the detriment of poor farmers as they artificially lower prices for some crops and block market access for growers from poor countries, a new study said.

What would happen if the government eliminated all farm subsidies?

If the government eliminated all farm subsidies, it would result in the following: 1- Poor management of the agricultural commodities. 2- Agricultural overproduction and surplus. 3- Lower variation of agricultural production. 4- Higher food prices.

Why do farmers receive subsidies?

The U.S. government created farm subsidies during the Great Depression to offset the surplus of crops and low prices of both crops and livestock.

Why agriculture is the backbone of Ghana economy?

It plays an important role in the socioeconomic development of Ghana as it contributes to ensuring food security, provides raw materials for local industries, generates foreign exchange, and provides employment and incomes for most of the population (especially those living in the rural areas), thereby contributing to …

What is the backbone of Ghana’s economy?

Agriculture is the backbone of the Ghanaian economy and a major foreign exchange earner. It contributes about 35% to GDP, employs 55% of the population on a formal and informal basis and con- tributes about 45% of all export earnings.

How many Ghanaians are into agriculture?

From The Report: Ghana 2020 Varying estimates put the percentage of households owning or operating a farm at between 44.1% and 51.5%, amounting to approximately 7.3m individuals.

What is the agricultural sector in Ghana?

Agriculture is a major economic activity in Ghana, contributing 20 per cent to Gross Domestic Product (GDP). In recognition that increased investment can help transform the largely subsistence-based agricultural sector, the government of Ghana and its development partners have implemented a number of programmes, including fiscal incentives, …

What are the incentives for Ghanaian farmers?

Other incentives gained by those who invest in the Ghanaian agriculture sector include: export promotion drive; full repatriation of dividends; and protection of investments.

What are the drivers of investment in Ghana?

The passion for agriculture was a key driver of investment among Ghanaian individual agribusiness leaders. For instance, a female CEO of a large Ghanaian farm developed her passion for food and agriculture because of her training in food and nutrition and involvement in gardening when she was young. The potential for high profits was also a key driver of investments for both Ghanaian agribusiness leaders and foreign firms operating in Ghana. For example, a fertiliser distribution company was established in Ghana because of the realisation that there was a huge potential to increase demand for fertilisers and associated profits.

Why do foreign companies invest in Ghana?

The foreign owned companies reported that they came to invest in Ghana because of the country’s track record of rule of law, political stability and public security. These findings highlight the importance of Ghana’s non-fiscal incentives such as guarantee of investment against nationalisation and expropriation.

Why was fertiliser distribution established in Ghana?

For example, a fertiliser distribution company was established in Ghana because of the realisation that there was a huge potential to increase demand for fertilisers and associated profits. Access to market was also a key determinant of investments.

What are incentives created to attract investment in the agricultural sector?

Incentives Created to attract Investments in the Agricultural Sector. Firms can enjoy corporate tax holidays, which adds up to five years for cash crops and livestock production as well as companies involved in processing of agricultural products. After the maximum years of tax concession, businesses engaged in agro-processing benefit …

What percentage of Ghana’s GDP is agriculture?

Agriculture makes up 54% of Ghana’s GDP, and over 40% of export earnings. It also covers over 90% of Ghana’s own food needs. COVID-19 severely endangers this vital sector, with potentially disastrous knock-on effects for both producers and consumers. But Ghana is also showing what governments can do to support their farmers, prevent a food crisis, …

What can Ghana do to help farmers?

But Ghana is also showing what governments can do to support their farmers, prevent a food crisis, and create a more inclusive and sustainable way forward. Here are three measures taken by Ghana’s government that mitigate the threat to smallholders, and thereby strengthen the source of our food supply:

Why is cocoa under threat in Ghana?

In Ghana, one of the world’s biggest cocoa exporters, the livelihoods of millions of smallholder farmers are under threat due to global lockdowns and border closures, as well as the spread of the disease itself. Agriculture sustains more than half of Ghana’s labour force, mostly as smallholders who cultivate their own plots …

What are the main crops grown in Ghana?

Ghana’s farmers typically grow food for their own needs as well as cash crops such as cocoa and cashew nuts for export to Europe, Asia and America. However, their economic importance is not reflected by their earnings, which are meagre and vulnerable to shocks.

How much does cocoa cost in Ghana?

The International Cocoa Organization posits the price of cocoa as $234.9 per 100kg. Image: Financial Times. One key intervention by Ghana’s government has been to provide subsidized fertilizer, hybrid seeds and weed killer to over 42,000 smallholder farmers.

What does it mean when farmers cannot plan and maximise production?

This means farmers cannot plan and maximise production, and instead live from cycle to cycle, saving seed from one harvest to grow the next. When large parts of the world went into lockdown earlier this year, many farmers in Ghana lost their market as air freight and other international shipments were stopped.

Why do farmers have to resorted to alternative livelihood programs?

To supplement the low incomes from the farming activities, other farmers have resorted to alternative livelihood programs to generate additional income. One problem is that farmers lack the capital to acquire high-quality seeds, fertilizer and crop protection products, all of which help boost yields.

Why is agriculture important in Ghana?

2.1 Ghana’s agricultural sector is crucial to the country’s sustainable long-term growth and development. Even though the rapid increase in the extractive sector (minerals, oil and gas) has diminished the relative size of the agricultural sector in the overall economy, agriculture remains vital to employment, income generation and poverty reduction. Agriculture employs 45 percent of the national labor force—far more than any other sector. Because rural poverty rates significantly exceed the national average, and agriculture and other primary sector activities are essential to the livelihoods of the country’s poorest households, agriculture development is critical for poverty reduction. Despite the changing dynamics, inclusive agricultural growth remains so effective in reducing poverty, especially when large numbers of the poor depend on farming. Even with more rapid rural-urban migration, the majority of the poor in Ghana will continue to be rural for decades to come.

What is the agricultural sector policy note?

The objective of the Agricultural Sector Policy Note is to help Ghana achieve transformation and modernization of its agriculture sector. There are both challenges and opportunities towards achieving transformation and modernization of the agriculture sector in Ghana. The country’s lower medium-income status supported by a growing extractive industries sector (especially oil) is an opportunity as the growth of the middle class increases the demand for high-quality and safe food products. However, high growth in the extractive sector and concomitant real exchange rate appreciation also present the risk of undermining Ghana’s agricultural competitiveness as has been observed in other countries such as Nigeria and Angola. These issues underline the special challenges confronting Ghana to sustain and accelerate agriculture growth in the face of economic transformation.

How much land is available for agriculture?

Large tracts of land available for agricultural expansion: More than 6 million hectares of arable land which is suitable for a wide range of crops, livestock, forestry and aquaculture production

Why is cocoa important to Ghana?

Cocoa is very important to Ghana in terms of rural livelihoods, foreign exchange earnings and employment, as well as being a key driver of sector growth. Cocoa accounts for about 7 percent of the country’s GDP and 20-25 percent of total export earnings. Ghana is the second most important producer and exporter of cocoa in the world, accounting for about 20-25 percent of total world supply. Total production increased from 400,000 MT in 1999-2000 to 1,000,000 MT in 2011-2012, but dropped to about 850,000 MT in 2013-2014, and has been fluctuating between 750,000-850,000 MT/year since.

What is the first priority of the government in agriculture?

The first priority is to improve public expenditure allocation and management as well as budget coordination in agriculture . The government needs to make a serious and sustained funding commitment to the agriculture sector and back up declarations about its importance with major increases in public expenditures on agriculture, at least to the level of 10 percent of the total expenditure as committed under the Maputo Declaration. Budget coordination, prioritization and execution in line with sector development goals and effective implementation are critical. Better coordination of DPs’ support is also urgently required. MoFA should focus on its core function of policy formulation, provision of public goods and monitoring & evaluation, while providing the incentives and space for private sector (including smallholder farmers’) investment. Consistent funding and technical support to devolved public sector agricultural services in the district assemblies is critical to ensure quality support to farmers.


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