Current policies are not targeting specific value chain inefficiencies. Rice and maize producers receive price disincentives arising from value chain and market inefficiencies as well as the variability of policies affecting the fuel and energy sector. The removal of the fuel subsidy generated a rapid increase in transport and processing costs over the period 2005-2013. Although the Medium Term Agriculture Investment Plan METASIP seeks to prioritize interventions on key value chains including rice and maize,  most expenditure measures during the period 2016-2012, directed to the agricultural sector covered all or groups of commodities indistinctively.

Taxes, charges and trade restrictions on imported food crops are not producing the expected benefits for producers. Despite an import tariff of 20 percent which adds to the various fees and charges on selected imported commodities (primarily, rice and poultry), farmers are receiving price disincentives for most of the years. Ghana, like other west Africa countries, is maintaining trade restrictions to protect its weak sub-sectors from international competition and achieve import substitution. Trade restrictions are not in line with the ECOWAS CET which comes into force in 2016.

Substantial public spending on input subsidy programmes is hampering structural interventions to boost value chain development. In line with the objective of boosting productivity for key crops as stated in the FASDEP II (2007) and the METASIP (2011-15) input subsidy schemes were re-established in 2008-2010. The Government Fertilizer and Seed Subsidy Program (GFSSP) as well as the mechanization programme, although its positive impact on output yields, is costly. Furthermore, budget transfers in favor of producers do not seem to offset the losses incurred due to the low prices they receive.

Public spending on rural infrastructure is not receiving the required attention. Government interventions concentrated on support of producers mainly through direct payments to agents between 2008 and 2011. Direct payments increased to the detriment of agriculture-supportive expenditure. In particular, the size of rural infrastructure expenditure declined both in absolute and relative terms over the period 2008-2012. This trend is not in line with policy objectives (FASDEP II) such as the reduction of post-harvest losses through enhanced storage infrastructure.

Download the report: Analysis of public expenditure in support of food and agriculture in Ghana, 2006-2012.

For additional information on the indicators shown in the graphs and the terminology used, please refer to MAFAP’s Glossary on Public Expenditure and Methodological Guidelines - Volume II - Public Expenditure. For detailed information on the data provided, please go to the MAFAP database.