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Interview with
Mr. J.H. Owusu Acheampong
the Minister of Food and Agriculture,
October 25th 1999
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Could you give us a brief insight into the Ministry of Food and Agriculture?
The Food and Agricultural sector is the dominant sector in the Ghanaian economy in terms of its share of the GDP, employment and foreign exchange earnings.
In 1997, for example, the sector employed about 70% of the total labor force and contributed about 47% to the GDP and accounted for over 40% of the foreign exchange earnings. In addition it is an important source of raw materials for manufacturing sector and finally about 72% of the rural household depend on it. Under the Ghana Vision 2020 the agricultural sector is expected to ensure food security for the nation and also adequate nutrition for all Ghanaians. We are also expected to supply raw material and other inputs to the other sectors of the economy. We are also supposed to contribute to an improvement in the balance of payment of our nation by way of exports and revenue and to provide producers with farm incomes comparable to any outside the agricultural sector. This sector is expected to change its productivity and increase its production on per capita basis and also improve upon its ability to capture various markets both within and outside the country.
Within the next few years we expect that the sector will grow by about 6%. Between 1991-1994 the sector was growing between 2.4%, between 1995-1998 the growth rate came to an average of about 4% per year, culminating to a high of 5.2% in 1995 and then in 1997 it came down to about 3.3%.
What was the cause of the fall in growth?
It was due to climatic conditions. We had some drought in the few years leading to the 3.3% growth rate.
To what extent did the fall in cocoa price influence these figures and the whole development of cocoa?
It had an adverse effect but I must say that the Government has been very magnanimous over the past few months. Even though cocoa prices have gone so low on the international market we have tried to maintain the producer price that we give to farmers in the previous year when prices were relatively high.
We are doing well in terms of food production. Our basic problem now is that we import a large quantity of rice and we are trying to address that issue by way of increasing rice production in the country.
The self-sufficiency ratio of rice today is 30%. To what number do you want to bring it up?
As of now we are importing about 400,000 metric tons and we want to bring it down to about a third or less within the next couple of years.
What mechanisms have you put in place to achieve this objective?
Our main problem was the lack of good quality seed and we have put in place the mechanism of improving the seeds for farmers. We have selected some seed growers who are working on contract basis for us to sell to our farmers for the next season. We are also putting in place mechanisms for farmers to be able to use the necessary machinery for mechanized farming and more importantly we are thinking of producing good quality rice so that we can also compete and get better income for our farmers.
Are there any other products that you want to develop?
For food security rice is the main problem because we are self-sufficient now in all other crops. We even have a surplus of maize, cassava and cocoyam. One other crop which we will have to look at is plantain. Plantain, in the past, was grown as a cover crop for new cocoa farms and as at now few new farms are being made so the production of plantain has gone down and we mean to improve on that. For the export crop we have a number of crops to deal with. First of all we have been exporting pineapple. We went up to about 27,000 metric tons about 2 years ago but it has come down to 22,000 metric tons. We have the advantage here and we have put mechanisms in place to help farmers increase their production. We have been able to enter the European Market with Papaya and we have realized that the farmers who are in it need support in terms of capital so we are supporting them mainly for export. General vegetables is another area. We export chili, green pepper and others. We are well known on the European market for these non-traditional exports but the quantum is below demand so we need to improve on our production base.
How is your export to the US?
We are exporting a few yams and other things to the US. We had a little problem with the sanitary requirements of the US but we are collaborating with them to see if we can meet their requirements. The quality of our products are well received on the international market so we want to improve on this. We are trying to break into the banana market on a large scale now that we can access the European market. Another area is cut flower export. We are not traditional exporters but we think that considering our proximity to Europe we should be able to take advantage. We are organizing some private people to go into that sector. Then avocado is another crop we are looking at. In the fisheries sector our main advantage is in tuna production but we want to process it further into flakes for exports into the European market.
| How far is your sector in the privatization process?
The agricultural sector is generally a privatized one. Production in the country is all in the hands of small scale farmers and private people so in that sense we have gone further than all other sectors. Since the IMF and the World Bank have withdrawn all subsidies on agricultural inputs, we need to find other ways of supporting our producers to expand their production.
Are you looking for foreign partners then?
Yes, particularly for export crops in areas like cut flowers. We need foreign investment and we would encourage anyone who would want to come.
How do you encourage people? Are there any special incentives?
We have all the incentives that apply to other sectors as given by the Ghana Investment Promotion Center. Our main advantage is that with tree crops like cocoa and cashew with long gestation periods, there is a 10 year non-taxable period of operations. Whatever inputs brought in for agricultural purposes are non-taxable.
Are you already in contact with other foreign investors?
Quite a few have come and others keep coming. And we link them with the private sector.
Is there any success story of American partnership in the Agricultural sector?
In the banana sector there is a joint Ghanaian and Dutch company partnership. Star Kist is an American company, they are in tuna processing in Ghana and I think it is the largest American investment in the agricultural sector for processing. Heinz International has also come to study the processing of tomato because we have glut in tomato production from time to time and we need to study it further. They have come to study it and they are yet to bring their report. GAFCO is also a German company doing well in terms of processing for both local and international market. Tyson company of America is also coming in conjunction with Darko Farms for poultry production. Zele Company has also set up a poultry project somewhere in the Asutuare area in the Eastern Region. There are some more.
What are some of the gray areas that you need to work on to attract more investment?
One difficult area is the land tenure system, the acquisition of land. Land per se is not a problem. The problem is the fact that land is not owned by Government so when the investor comes to initiate any project, he needs to go through the traditional land owners and this sometimes takes time. We are trying to access the government agricultural lands we have and compiling a data land bank so that we can show investors these areas when they come in. This will make it easier. We however have a policy to assist anyone who comes, so sometimes we assist them to identify areas in the country side and help in negotiations.
How do you see the future of your sector and what are the main areas you would want to put emphasis on?
I think the future is bright. We have large body of water and available arable land which if we put into proper use should yield good results. I would want to look especially at agricultural financing which is a very difficult area. The banks have shied away from agricultural funding because of uncertainties. The Agricultural Development Bank is helping but the burden is great so there is a program that we are working on. We have also put in place the Accelerated Agricultural Program whereby we are developing a strategy and encouraging donors to contribute into the common kit for us to use in supporting agricultural production in the country. We are going to focus on these areas and improve on our processing capacity; we are looking at some products like yam, cassava, fruits, and maize.
As you know Forbes Magazine reaches more than 4 million readers, mainly businessmen. What is your final message to them?
This country is viable, it has a lot of untapped resources especially in the agricultural sector, there is land, water, we are quite close to the bigger markets in Europe and America and therefore we have an advantage over the others. We would like to welcome any investor in this area and as a government we are prepared to support and give out all the incentives to investors. We would also like to invite you to come and invest in diary products. We have a big West African market and with our peace and stability we can serve as the hub to export into other West African countries. Anyone who comes here has a big advantage.
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© World INvestment NEws, 1999.
This is the electronic edition of the special country report on Ghana published in Forbes
December 13th 1999 Issue.
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