The African Center for Energy Policy (ACEP), has indicated that policy inefficiencies are contributing to the drop in the country’s agricultural growth.
The agriculture sector recorded a 4.5 per cent growth in 2014, but declined significantly to 0.04 percent in 2015.
According to the center, the following are some policy and spending deficiencies which are accounting for the downward growth in the sector.
Majority of ABFA went into Sea defense project
The Head of Policy Unit at ACEP, Dr. Ishmael Ackah, speaking at a forum on the role of oil revenues in bridging the financing gap in agriculture noted that, “Ghana allocated GH170, 624,179.60 to the agriculture sector from oil revenues in 2014. Out of this, a heavy chunk of GH118, 386,119 representing 69% went into sea defence projects. Food and aquaculture received only GH51, 473,290 representing 39%. This is very bad given the deficit we have in the sector.”
He said it is proper to put projects classified under agriculture into the right perspective so as to determine what constitutes agriculture projects.
“Sea defense project could have been classified under the ‘other infrastructure’ bit of the ABFA and not directly classifying it under agric. You do that and food and aquaculture suffer in the end,” he opined
ABFA serving as substitute instead of a complement
Another challenge to the expected growth in agriculture is the disbursement of the Annual Budget Funding Amount as a substitute rather than a complement.
Dr. Ackah revealed that, “the Annual Budget Funding Amount which is to serve as a complement to existing revenue stream for the agriculture budget is rather serving as a substitute. This is shown when government’s support to the agric sector keeps falling, while allocations from the ABFA is increasing.”
This misapplication of funds he said will have dire consequences on the agric sector in the event that oil reserves are depleted.
Agric Investment volatility
A study of the investment trend from 2013 to 2016 indicates that, there is no clear cut vision on what is needed from agriculture, hence the ‘see-saw’ investment attitude in the agriculture sector.
For instance, in 2013, the total ABFA allocation to the agriculture sector was 2.5 per cent. It rose sharply to 31 per cent in 2014, and further dropped down to 2.7% in 2015. In the 2016 budget,GH 284, 450, 130 representing 28% of the ABFA, was allocated to agriculture in 2016.
Late supply of subsidized fertilizer to farmers
Dr. Ackah further indicated that ACEP’s interaction with the Peasant Farmers Association showed that, over the last few years, subsidized fertilizers which are to get to the farmers at the beginning of the crop season usually arrive after the cropping season.