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AGRICULTURE AND THE NEW TRADE AGENDA IN THE WTO

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In the agriculturesector there exists well-established marketing chains for example in the cocoa industry that transfer the produce from the farm to the

    AGRICULTURE AND THE NEW TRADE AGENDA IN THE WTO 2000 NEGOTIATIONS. ECONOMIC ANALYSES OF INTERESTS

    AND OPTIONS FOR GHANA

    BY

    ABENA D. ODURO

    Centre for Policy Analysis

    P.O. Box 19010

    Accra-North

    Email: abena@cepa.org.gh

Draft chapter prepared for the World Bank Project on Agriculture and the New Trade Agenda in the WTO

    2000 Negotiations. September 2001

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    AGRICULTURE AND THE NEW TRADE AGENDA IN THE WTO.

     ECONOMIC ANALYSES OF INTERESTS AND OPTIONS FOR GHANA

I. Introduction

    The development of the agriculture sector is an integral part of Ghana’s development and poverty reduction strategy. Although only a small fraction of total production in the agriculture sector is currently traded internationally, developments in the world market for agriculture products has ramifications for domestic production. Expansion in production to supply export markets is an objective of the current agriculture strategy. It is imperative for Ghana that market access is maintained and if possible improved. Market access will be eroded if importing countries maintain high tariff and/or non-tariff barriers. It will also be undermined if some suppliers to third markets have undue advantage because they receive domestic subsidies and support that are not available to the Ghanaian farmer.

    Ghana’s agriculture is constrained by several problems that are not tackled by the World Trade Organisation. Ghana has several commitments to meet under the WTO that will require not only changes in regulations but also substantial amounts of investment. It is critical that the trade liberalisation that the implementation of the WTO is supposed to achieve does occur. Failing that, countries like Ghana for which the immediate costs of implementing the WTO Agreements appear to be greater than the long-term gains may be less than willing to participate in the process.

II. The Agriculture Sector in Ghana

    Agriculture (as defined in the national accounts) comprises of five sub-sectors with the following contributions, i.e. cocoa (14%), other crops (61%), livestock (7%), fisheries 1(5%) and forestry and logging (11%). The agriculture sector currently contributes

    approximately 40% to GDP. Approximately 54% of the workforce aged between 15 and 64 are employed in agriculture. In the rural sector the proportion rises to about 70%. Small-holder farms dominate the sector accounting for about 80% of total agricultural production. Subsistence production is still prevalent in the food crop sector.

    A wide range of food crops is produced in Ghana. The area under cultivation of many of these crops has increased in the 1990s. Agriculture and food production increased in the 1990s. However, on a per capita basis the picture is less encouraging (Table 1). Both food production per capita and agriculture production per capita peaked in 1995 and have followed a declining trend since then (Table 2). This pattern of production over time is evident amongst cereals (Table 2). Production indices in 1999 are lower than the 1995 indices for maize, sorghum, millet and paddy rice production.

     1 Forestry and logging includes activities such as timber felling, planting and replanting of trees, transportation of logs up to permanent transportation links, gathering of uncultivated materials and charcoal burning in the forest.

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Table 1. Indices of Agriculture and Food Production 1989-91=100

     Agriculture Agriculture Per Food Food Per

    Production Capita Production Capita 1990 82.4 82.5 82.3 82.4 1992 118.4 115.0 118.3 114.8 1992 117.2 110.3 116.8 109.8 1993 126.2 115.1 125.3 114.2 1994 120.4 106.5 120.0 106.1 1995 136.5 117.2 136.1 116.9 1996 139.6 116.5 138.7 115.8 1997 138.9 112.8 137.6 111.7 1998 145.3 114.9 144.0 113.0 1999 145.3 111.9 144.0 110.9 Source: FA0 Quarterly Bulletin of Statistics, Vol.11 No. 3, Rome.

Table 2. Index of Production of Selected Food Crops (1984-86=100)

    Crop 1992 1993 1994 1995 1996 1997 1998 1999 Cassava 170 179 180 198 213 210 215 234 Yam 300 350 219 273 293 310 348 418 Plantain 88 108 121 134 149 147 156 167 Cocoyam 76 78 73 94 98 97 99 108 Maize 144 189 185 203 198 196 200 199 Sorghum 159 201 199 221 217 204 218 185 Millet 108 161 137 170 157 117 132 130 Paddy Rice 176 209 216 295 287 263 375 278 Source: Ministry of Agriculture (1999) Agriculture in Ghana. Facts and Figures, SRID,

    Accra.

    Table 3. Production of Industrial Crops (Mt)

     Cocoa Coffee Seed Cotton Tobacco Oil Palm</