Major Functions of Economic, Agricultural and Food System Mrs. Abigail A. Adaku & Dr. John Jatoe Dept Agric Econ and Agribusiness University of Ghana, Legon

Major functions include the determination of: What goods and services are to be produced How to organize and combine resources in production The provision for maintenance and possible expansion of productive capacity The allocation or distribution of income of owners of resources, and The allocation of a given supply of a product, service or resource to consumers and producers during some specific period of time.

What to be produced Consumer sovereignty predominates in a market –oriented economy Consumer (resource owners) may receive income from wages and salaries, interest, rent and profit from the sale and or employment of their resources (labour, land, capital, management) A level of their income will be spent in the product/service market.

The price consumers are willing and able to pay in the producer market for food products, reflect in the receipt of food and farm firms, indicate what is to be produced

Organization and combination of resources Producers of farm and food products will organise and combine resources in order to respond to consumer demand for their products. Product prices will give an indication of the degree of profitability to firms and the industry and their willingness to pay for resources used in production.

Maintenance and expansion Producers will need to set aside a portion of receipt in order to provide maintenance of the productive capacity (investment capital) of the farm or food processing firm. Expansion and growth, as related to increases in quantities of resources and/or new techniques of production and marketing, are necessary to the functioning of an economic system. Product and resource price expectations and price of capital loans will influence the expansion and growth of firms.

Allocation of income A major portion of producer receipts will be allocated as income to owners of resources. Wages and salaries for being employed Rent from renting a piece of land Interest income from savings account The level of income will be based on the quantity of resources owned and the productivity of, and demand for, a given resource.

Differences in returns to resource owners may result because of: Lack of information and/or opportunity Economic power by some individuals or groups obtained either legally and illegally, and Economic or material inheritance

Organization and Role of the agricultural and Food System Agricultural and food system in general is complex. The farm inputs sector is made up of firms that provide resources such as seed, fertilizer, fuel, tractors, pesticides, etc. purchased in the market place by farmers and ranchers. Farm supply firms may be individuals, cooperatives, or corporation organizations.

Aggregation and Logistics Processing Front End Sourcing Cultivation Institutional Buyers Informal Export to West African Sub-Region Large Farmers Animal Feed Manufacturers (Including Poultry Farmers) Assemblers / Village Collectors Wholesale Traders Coonsumers Retailers Distributor Small Farmers Brokers Processing for Human Consumption Source: Field data

The farm and ranch sector Includes those firms that form the basic production unit of the agricultural and food system. Farms and ranches, comprised mainly of private, family owned units and some corporate organizations, perform the function of organizing and combining resources to produce food and fibre.

The producer and marketing sector of the agricultural and food system transforms the farm product into a product form that is desired by the consumer. Two related functions are storage and transportation. The three functions of form, time and place are performed in the marketing sector.