The Government of Ghana (GoG) has engaged the World Bank and USAID in supporting agricultural development project – the Ghana Commercial Agriculture Project (GCAP), with the principal objective of improving the investment climate for agri-business and developing inclusive Private-Public Partnerships (PPPs) and smallholder linkages aimed at increasing on-farm productivity and value addition in selected value chains.
‘Modernizing agriculture’ remains the overarching theme of Ghana’s agricultural policy as well as the new private sector development strategy. It focuses on a stronger role for the private sector in transforming agriculture from a low-productivity subsistence-based sector to one characterized by high-productivity, integrated value chains, and extensive value addition. Government interventions are focused on the enabling environment and other targeted measures to facilitate such investment, alongside more direct interventions targeted at food insecure areas.
Ghana’s current agricultural policy framework and national development plan emphasizes the importance of graduating from a subsistence-based small-holder system to a sector characterized by a stronger market-based orientation based on a combination of productive small-holders alongside larger commercial enterprises engaged in agricultural production, agro-processing and other activities along the value chain. To maximize the impacts of private investment in agriculture on development, a particular focus is to facilitate small-holder linkages with other commercial businesses through, for instance, contract farming and out-grower schemes. Recognizing some of the challenges of past efforts, the Government is adopting a new approach of public-private partnerships (PPPs) in which complementary and targeted public support serves to leverage of facilitate private investment in the agriculture sector.
A major thrust of the new approach centres on enhancing the role of commercial agriculture and strengthening agricultural value chains. Under the program the Government is seeking to broaden and deepen private sector investment in agriculture – noting that it is already occurring but can be augmented – in the following ways:
- Additional large-scale commercial farms in the cereals sector has the potential to utilize large tracts of unutilized land to meet domestic consumer demand (rice, white maize) and as lower-cost imports to the poultry industry (yellow maize) and, ultimately, for export to the region.
- There are additional opportunities for multinational investors to expand the horticulture sector, given Ghana’s established market presence in Europe and favorable geographical position, to raise export revenues.
- Additional agro-processing especially in the horticulture sector can provide alternative markets to local production that is unable to meet European requirements (tastes or standards) and create jobs.
- More private input dealers can extend the availability of seeds and fertilizer to raise productivity across the sector.
- Additional private enterprises engaged in the marketing and processing of food staples for local consumption, for instance by aggregating output from small-holders for bulk distribution and processing to generate economies of scale in the value chain.
Innovative institutional arrangements between large(r) scale investors and small-holders can generate mutual benefits and provide effective mechanisms for bolstering small-holder productivity. For instance, out-grower schemes provide linkages between vertically integrated plantations and surrounding small-holders. Contract farming arrangements can provide benefits for input and output dealers and small-holder farmers. To this end, the Government is keen to develop the Accra Plains through Public Private Partnership (PPP) and provide support to encourage the development of nucleus investment arrangements for the benefit of local smallholder farmers.
