INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE sustainable solutions for ending hunger and poverty Ghana Strategy Support Program Concluding Remarks and Way Forward Ghana Strategy Forum: The Role of Agriculture in Achieving Middle Income Status November 16, 2007 Accra

Ghana Strategy Support Program INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 2 Outline What we have learnt: -Critical role of agriculture in attaining middle- income (MIC) status -Composition of subsector within agriculture matters -Regional growth pattern matters -Mobilization and allocation of investment to support growth -Improvement of governance and institutions Knowledge gaps and way forward

Ghana Strategy Support Program INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 3 Role of agriculture in attaining middle- income (MIC) status Reaching MIC requires broad-based economic transformation across the manufacturing, services and agricultural sectors: Transformation: resources and labor move from traditional to modern sectors Given agriculture’s large share of economy, it is impossible to have rapid economy-wide growth without accelerating agricultural growth Agricultural growth is a pre-condition for any economy to take off (India, China) Considerable room to promote growth in agricultural sector in Ghana Improve productivity through modern inputs, technologies, irrigation, sustainable land management. Structural shifts to high value production Improve the delivery of services to smallholders and develop new ways to include smallholders in more efficient value chains Growth in the agricultural sector requires strong support from the government to raise agricultural productivity and encourage structural transformation Structural transformation in successfully transforming countries rarely just market-driven Critical role of government in Asian green revolution

Ghana Strategy Support Program INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 4 Composition of subsector within agriculture matters Opportunities to accelerate growth in export-oriented agriculture exist but domestic agricultural sub-sectors, such as staple foods, have much stronger growth-multiplier effects Domestic market-oriented agriculture supports overall growth by: Lowering food prices Competing with imports Providing cheap inputs for manufacturing Natural limits to export-led growth based on primary products, therefore: Diversifying Ghana’s export structure is needed for exports to become an engine for accelerated growth and structural change Government must search for policies that promote private entrepreneurship and investment (foreign and domestic) in new activities with dynamic international demand

Ghana Strategy Support Program INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 5 Regional growth pattern matters North/South divide in Ghana’s development Export-led growth in South not trickled down to North in form of higher incomes Current growth path will lead to greater regional income divergence and further concentrations of poverty in the North To overcome income disparities and to foster growth/poverty reduction in North, Ghana needs to make agricultural growth more inclusive by focusing on: Lagging regions and household groups that may be left behind in growth process Activities that benefit majority of farmers/smallholders, such as cereal production, livestock and nontraditional cash crops that are typically grown in North Regional liberalization

Ghana Strategy Support Program INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 6 Increased investment to support needed agricultural growth Increased investment for (not just in) agriculture agricultural research and extension programs are needed to support the accelerated growth Improved infrastructure, irrigation, and development of input markets Improved rural education Focus on poorer regions

Ghana Strategy Support Program INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 7 Improvement of governance and institutions For Ghana to reach MIC status => coordination between increasingly complex macroeconomic, industrial and financial market policies To implement these such complex policies, Ghana needs to overcome political, administrative, and fiscal feasibility challenges through: Decentralization (political, administrative and fiscal) Increased use in political decision processes of policy research results on inclusive growth Improved capacity of (i) administration to supply services and (ii) farmers to demand services Overall, more attention needs to be paid to the specific requirements of the agricultural sector Role for public agencies and civil society organization in facilitating cooperation among stakeholders and between stakeholders and agribusinesses Help to improve the governance systems of these arrangements

Ghana Strategy Support Program INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 8 Way Forward 1 Knowledge Gaps: How to set up knowledge and information (including data) support system to support the formulation and implementation of various development strategies Need to evaluate returns to investment in nonagricultural sectors. How to mobilize resources to support pro-poor growth: reform od tax system. How climate change, high-energy prices, the rise of new players like China, India, Brazil affect growth and the poor in the country How urbanization affects rural growth and poverty reduction`

Ghana Strategy Support Program INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 9 Way Forward 2 Need to strengthen the national capacity Demand side: -politicians -government officials -civil societies -private sectors Supply side: -government institutions -universities -thinktank culture

Ghana Strategy Support Program INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 10 Way Forward 3 Mutual Learning and cooperation with other developing countries -Ghana as a successful case for other developing countries -Regional cooperation with other African regions -Asia/LAC