The State of the Agriculture Sector in Ghana

Ghana is located on the West Coast of Africa, referred to as the Gold Coast due to its abundance of the precious metal.  It is the second-largest producer of cocoa, with about 15% of the world market.  Cocoa is dominated by Ghana’s next-door neighbor, Cote D’Ivoire, which has spent the last decade in disarray after a civil war and the ensuing post-war violence.  Despite the fact that agriculture accounts for about 40% of GDP and more than half the workforce, Cocoa is the only commercial crop of economic significance.  While other industrial crops, including cotton, rubber, and tobacco are grown, they are small potatoes compared to cocoa and other exports.  (The major exports are timber, gold, diamond, bauxite, and manganese.  It is difficult for African economies to be competitive in global agriculture markets due to agriculture subsidies in the U.S. and Europe, efficient farming practices in Brazil and Argentina, and the scale of rice production in Thailand and Vietnam.  For a more complete explanation, see here.)

The main food crops grown in Ghana are maize, yams, cassava, and, to a lesser extent, sorghum, and millet.  More recently, rice Cocoa is the only with a specific framework for facilitating trade.  All cocoa grown for export must be sold to the Ghana Cocoa Board (COCOBOD), which aggregates the crop for sale in the international market.  International demand and the presence of a single buyer to coordinate trade means the market for cocoa is guaranteed.   COCOBOD has experimented over the last thirty years with various market liberalization tactics in order to make the industry more competitive, including privatizing more companies and investing in the development of the market.  Technoserve currently runs the Cocoa Abrapopa project in Ghana, which has raised farmer incomes by a remarkable 270%.

In terms of staple crops, Ghana is largely a net importer.  Of all the key food crops, Ghana is only self-sufficient for one: plantains (which are delicious).  Not surprisingly, global maize production is dominated by the United States, which offers generous subsidies to corporate farms in the Midwest, and Brazil and Argentina, which have some of the most efficient agricultural processes in the world.  Rice has not always been a staple crop in Ghana, and only recently has it become more common.  The majority of the rice in the country originates in Vietnam and Thailand, where a combination of small-scale Green Revolution coupled with a high labor capacity yields top-quality jasmine rice at a fraction of the cost of local producers.  Rice quality is rated on a scale of 1 to 5, with 1 being the highest quality.  Rice from Southeast Asia receives a 2.4 on average.  In contrast, Ghanaian rice receives a 4.7.  As a result, Thai and Vietnamese rice are popular in the urban areas, where customers are less price-conscious (even though the difference in price is not huge).   Other top rice importers include the United States and Pakistan.

One area where Ghana excels is in the fruit sector.  The country produces flavorful varieties of pineapple and mango, which are exported to Europe and sold at a premium in supermarkets as fresh cut fruit.  As a friend told me, the Brits are price-insensitive when it comes to eating mangoes at Christmas time, which presents an opportunity for Ghana’s fruit producers.

Ghana is highly competitive in one key cash crop – cocoa, for which it controls 21% of the world market – and involved in the exportation of several others.  While agriculture accounts for 37% of GDP, this percentage is spread across hundreds of thousands of 1-2 hectare, smallholder farms.  The big export-industries – timber, gold and other mining activities, and, very soon, oil – are the key drivers of economic growth.  But there are still a lot of opportunities for import-substitution and raising food output for consumption, even if export is out of the question in some cases (i.e. maize, rice, poultry, etc.).  This is what the ADVANCE project is trying to do, and its strategy will be the subject of my next post.

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2 Responses to The State of the Agriculture Sector in Ghana

  1. Pingback: My Role in ADVANCE and Technoserve in Ghana | Develop Economies

  2. Chris P says:

    Josh,

    Do you have any reading you’ve come across that does a good explaining the relative natural resource qualities that allow someone to gauge the potential for one type of crop or another? Or overview on the inputs (and cost) required to do undergo different agricultural activities.

    Best,

    Chris

  3. afram aaron says:

    Please I want to farm either rubber or cotton in Ghana and want an article on it

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