Graphic Business News

Agric must move from donor dependency • Why Agric Marshall Plan remains on paper

By: Emmanuel Bruce
Dr Owusu Afriyie Akoto
Dr Owusu Afriyie Akoto

Agriculture is the backbone of the economy and an important contributor to the country’s Gross Domestic Product (GDP). But how many times haven’t we heard this? Yet, when it comes to fueling this engine of growth, we always have to fall on donor funds.
For how long will the country continue to rely on donor funds to support a sector that serves as a major source of income for majority of the population?

A huge chunk of agricultural activities in the country have been largely left to donors, making it difficult for growth enhancing programmes to achieve their desired objectives.
In the 2018 budget, out of the GH¢598.62 million allocated to the sector, GH¢129.21 million was coming from donor funds, representing about 22 per cent of the entire allocation. This was against the government of Ghana allocation of GH¢217.20 million, representing 36 per cent.
The situation was worse in the 2019 budget as over 50 per cent of the entire allocation for the ministry is expected to come from donors.
Out of the GH¢967.84 million allocated, GH¢496.61 million is expected to come from the donor community.
The Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods requires that government’s across Africa devote at least 10 per cent of their annual budget for the agricultural sector, however, in the recent Comprehensive Africa Agriculture Development Programme (CAADP) assessment, Ghana scored very low as it was indicated that just about 3.5 per cent of the government’s annual budget is devoted to the sector, which is extremely lower than the 10 per cent target.

Contribution to GDP
The results of the government’s decision to leave agriculture to donors over the years have been a consistent decline of the sectors contributions to GDP.
The country’s agricultural sector has declined steadily for eight years in terms of its contribution to Gross Domestic Product (GDP) as it declined from 31.8 per cent in 2009 to 29.9 per cent in 2010, 27.2 per cent in 2011, 24.8 per cent in 2012, 24.4 per cent in 2013, 23.2 per cent in 2014, 21.2 per cent in 2015, 19.3 per cent in 2016, and 19.3 per cent in both 2016 and 2017.
This negative trend has largely been blamed on low production levels caused by the lack of investments in the sector.

Agric Marshall Plan
After years of neglect, agriculture reemerged as a sector to watch when the Vice-President revealed the government’s intention to place the sector at the forefront of its 2018 budget through the introduction of an Agriculture Marshall Plan which was expected to build on the successes of the planning for food and jobs programme.
This brought some excitement and renewed the hopes and confidence of stakeholders in the sector which included the Peasant Farmers Association of Ghana (PFAG), the Ghana Agricultural Workers Union (GAWU) and the Ghana Trade and Livelihood Coalition (GTLC) as they believed it will lead the sector back to the path of growth, make it more dynamic, and be a catalyst for economic transformation.
Subsequently, the plan was announced in the 2018 budget, with plans to allocate GH¢700 million to it.
The amount was to be invested in agricultural transformation programmes, construct and refurbish roads linking farms to urban centres and provide storage and irrigation facilities.
Sadly, the programme failed to take off in 2018 and nothing about it was mentioned in the 2019 budget.
The Deputy Minister of Agriculture, Dr Sagre Bambangi last year revealed that the much touted plan could not be implemented because the government failed to secure funds from donors.
For a programme that was intended to boost the country’s agricultural sector by enhancing food security, improving farm productivity, among others, one would have thought the government would have found ways to finance it through its budget, but sadly we are being told it is waiting for donor funds before it could be implemented.
This must ,however, come to an end because for the country to explore the sectors full potential and really make it an engine of growth, there must be increased investments and these investments must come from the government.
Other private investors would only be interested in the sector if the government first leads the way by committing enough resources in the sector and not having to always wait for donors.

SDG goals
An increase of government’s investment in the sector would not only allow it to implement growth enhancing programmes but would also go a long way to help in the attainment of the sustainable development goals (SDG).
An increase in agricultural investment would help boost production to feed growing populations sustainably while creating jobs and incomes along rural areas. History has shown that increasing agricultural productivity is a critical driver of economic transformation and social development.
This would also go a long to reduce poverty as most people who are engaged in agriculture are in the rural areas where over 70 per cent of the world’s extreme poor reside.
Weaning agric off donor support
In an interview, the President of the Agribusiness Chamber of Ghana, Mr Anthony Morrison said it was about time the country took strategic steps to wean the agricultural sector off donor support.
He said the major reason why the country had not been able to wean the sector off donor was as result of the focus of the agric policies which was on production and not market oriented.
“Once we continue to tickle ourselves with food security, production and trying to lower the cost of agric based produce on the market, eventually we will continue to depend on foreign support and as we are aware donor funding does not last,” he stated.
He said every donor had its own philosophy and therefore do not come to support us with the funds.
“There is no point for us to sit down for these donors to be telling us that we should do and make us feel like it’s the best for us. They come in when they feel they need to satisfy a projected short gap on their market,” he noted

Payment of taxes by farmers
Mr Morrison also called for the need to register all farmers in the country to enable them pay taxes.
“It is estimated that we have about 14 million farmers so we put in a structure to register all farmers and bring them into the formal area where they can also pay taxes,” he noted.
“Let’s even say that each farmer pays GH¢2 every month across board, this multiplied by the 14 million farmers will be GH¢28 million, multiplied by 12 months will give us GH¢336 million which can be used to support the sector every year,” he added. 

Development fund
The Coordinator of the Ghana Trade and Livelihood Coalition (GTLC), Mr Ibrahim Akalbilla also in an interview advised the government to channel the money it spends on subsidies in the sector to rather create an agricultural development fund that could be used to support the sector.
He said the fund could even be built to also give credit to farmers.
Mr Akalbilla also suggested that the government could go for loans to support certain critical infrastructure in the sector.
“Irrigation projects are very capital intensive and we need a lot of them currently. We go for loan facilities to build roads and a number of infrastructure and we can do the same with the irrigation projects,” he stated.
“The returns on the investment in irrigation, when managed well could be able to pay back the loan,” he added.