Public Disclosure Authorized Ghana Agricultural Sector ...documents.worldbank.org/curated/en/960981468249625400/pdf/mul… · shallots in coastal sands (irrigated), and (b) rice,

Report No. 1769-GH

Ghana RL Agricultural Sector Review(In Three Volumes)

Volume 11 (Annexes I-V)

April 12, 1978Western Africa Country Programs I

FOR OFFICIAL USE ONLY

Document of the World Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may nototherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

US$1 = ¢1.15

¢1 = US$0.87

ABBREVIATIONS

ADB Agricultural Development BankCDB Cotton Development BoardCMB Cocoa Marketing BoardCPD Cocoa Production Division.CRI Crop Research InstituteCRIG Cocoa Research Institute of GhanaCSIR Council for Scientific and Industrial

ResearchFDC Food Distribution CorporationFLO Farm Loan OfficeFPC Food Production CorporationGDB Grains and Legumes Development BoardGFC Ghana Fertilizer CompanyGGADP Ghanaian-German Agricultural Development

ProjectGHA Ghana Highway AuthorityGHOC Ghana Industrial Holding CompanycNPA Ghana National Procurement AgencyGWC Grains Warehousing CompanyICCO International Cocoa OrganizationMCA Ministry of Cocoa AffairsMOA Ministry of AgricultureNIB National Investment BankRMU Rice Mills UnitSFC State Farms CorporationSRI Soil Research Institute

This report is based on the findings of a mission which visitedGhana in February/March 1977. The mission comprised Messrs. Hendrik T.Koppen, PAul S. Zuckerman, Walter Kock (RMWA), Thakoor Persaud andMrs. Bruna Vitagliano of the Bank and Messrs. Peter Calkin and LawrenceCockcroft (consultants).

FOR OFFICIAL USE ONLY

LIST OF ANNEXES

ANNEX I: PROSPECTS FOR AGRICULTURAL PRODUCTION

ANNEX II: COCOA SECTOR

ANNEX III: LIVESTOCK SECTOR

ANNEX IV: INSTITUTIONAL FRAMEWORK

ANNEX V: MARKETING AND INPUT DISTRIBUTION

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

ANNEX IPage l

PROSPECTS FOR AGRICULTURAL PRODUCTION

A. Ecological Zones and their Distribution

1. Ecologically Ghana consists of two main zones: the fores'- zone,occupying roughly one third of the country (but inhabited by two thirds of thepopulation), and the savannah zone, spreading over the remaining two thirds.Both zones can be divided into agricultural subzones that are the product of acombination of soil and climatic factors as well as their correspondingnatural vegetation. Their extension, location, and significance for develop-ment purposes is briefly described below (see also map):

(i) High Rainfall Forest (4 percent of Ghana)

Location - in the southwest corner of Ghana occupying one thirdof the Western Region;

Rainfall - 1750-2125 mm in two seasons;

Soils - relatively poor and acid owing to heavy leaching byhigh rainfall, easily erodable on predominantlyondulating topography;

Main Crops - oilpalm, rubber, coconut, rice, plantain, cocoyams;

Agricultural Value - good for acidity tolerating tree crops andrice in the bottomlands. Soils lose fertility underannual crops if not compensated by multistoriedfarming (the association of animal, bush and treecrops).

(ii) Semi - Deciduous Forest (21 percent of Ghana)

Location - Forest (cocoa) belt spread over Western-Central-Eastern- and Southern part of Brong Ahafo region;


Soils - richer, less acid, gravelly with good permeability(essential for cocoa);

Main Crops - cocoa, oilpalm in higher rainfall zones,plantations, rootcrops (such as cocoyam, cassava)and, to a lesser extent, maize;

Agricultural Value - main cocoa area; also area of highesttrees under natural vegetation. Since area isdensely populated, competition with foodcrops isstrong. This presents fertility maintenanceproblems owing to sharp reduction of fallow periods.

ANNEX IPage 2

(iii) Transitional Zone (11 percent of Ghana)

Location - outward extension of forest in the north (Ashantiand Volta region) and southeast (Eastern region);


Soils - gravelly on gently sloping topography, easily erodable;

Main Crops - maize, cassava, plantain, cocoyams, groundnuts,soyabeans, tobacco, kenaf; marginal for tree crops;

Agricultural Value - although suitable for a variety of crops,the soils present problems of soil management;mechanization of continuous annual crop cultivationis spreading in this area and is resulting in lossof structure (loss of organic matter) owing toexcessive aeration, and consequent hard pan (in thesubsoil) and "capping" (on the top). They requiresoil management at varying depths, coupled withrotations allowing rest periods and deeper rootingplants in rotation.

(iv) Coastal Savannah (7 percent of Ghana)

Location - Southern coastal plans in Central (Wineba), Eastern(greater Accra) and Volta (Ho-Keita) region;

Rainfall - 625-1000 mm in two seasons, distribution more erratic;

Soils - covered with grassland/shrub vegetation, consisting oftwo main groups:

(a) sandier (gleysols), easy to cultivate, sometimeswaterlogged, and

(b) heavier (vertisols) more fertile, suitable forirrigation;

Main Crops -

(a) maize, cassava, groundnuts, vegetable, tobacco;shallots in coastal sands (irrigated), and

(b) rice, cotton, sugar cane under rainfed andirrigated cultivation;

Agricultural Value -

(a) main livestock area (cattle, sheep), annual cropsare often marginal owing to erratic rainfall, and

ANNEX IPage 3

(b) fertile, but require mechanized cultivation underrainfed and irrigated conditions and good manage-ment.

(v) Northern Savannah (57 percent of Ghana)

Location - covering most of Brong Ahafo, Northern and UpperRegion;

Rainfall - 800-1200 mm in one season, except for southern parts;amount declining from south to north;

Soils - consist of three groups, generally less fertile; undertree/grassland vegetation:

(a) reddish brown, gravelly, well drained soils ofrelatively low fertility;

(b) groundwater laterites (in the White Volta basin)with high textures and frequent iron pans as wellas manganese concretions; generally of low fer-tility. Only in the flood plains (fadamas) alongriver banks are soils heavier and allow mechanizedrice cultivation, and

(c) eroded shallow soils (lithosols) of low fertility;

Main Crops -

(a) yams, maize (in sufficient rainfall areas),millet, guinea corn, cotton, groundnuts, tobacco,kenaf;

(b) rice in valley bottoms;

(c) pasture;

Agricultural Value -

(a) medium; owing to low inherent fertility, theyrequire either long fallow periods (in thinlypopulated Brong Ahafo region) or a combinationof organic and mineral fertilizer under constantcultivation (in densily populated Upper Region);

(b) only the heavier and deeper soils allow mechanicalrice cultivation, while the shallower, drier soilsare subject to laterization and erosion whencultivated. They allow grazing in receding floods,but are located in a trypanosomiasis area;

(c) only good for extensive grazing.

ANNEX IPage 4

B. The Role and Potential of the Regions

2. Regional boundaries in Ghana do not follow ecological zones, butsince all planning takes place within administrative areas, relevant sta-tistic are only available by region. Distribution of ecological zones overthe regions are shown in table 2.

(i) Volta Region

3. A border region to neighboring Togo in the south east of Ghana,the Volta Region is equally divided between coastal savannah in the South andtransitional zone and some interior savannah in the North. Of the approxi-mate one million people with over 100,000 agricultural smallholdings mostare concentrated in the southern and central part. The same applies toinfrastructure. With the exception of the north, the region, being mostlyflat, has a fairly developed infrastructure and therefore enjoys good marketaccess to Accra. It is an important livestock producer in its southern part,with traditional herds as well as newly established ranches in the public andprivate sector.

4. The region supplies 13 percent of Ghana's maize production, mostlyon smallholdings, while rice (8 percent) is produced on water management andirrigation schemes in the south, as well as in its northern part (table 5).Cocoa production (6 percent) is located in its central part, while yam (12percent), grown mostly on smallholdings, is the most important crop of thenorth. Cotton has only lately developed as an industrial crop on smallholdings in the center and some industrial estates located near textilefactories on the alluvial soils of the southern plains. Tobacco, also asmallholder crop, is the second industrial crop on rainfed land that hasgained in importance, aided by the Ghana Tobacco Company. The most importantindustrial crop on irrigation projects in the south has become sugar cane.

5. The region offers good conditions for the production of yams,cassava, cotton, and tobacco as rainfed crops, and rice, sugar cane, andvegetables under irrigation. Maize in the south, oilpalms, and some of thecocoa grown in the region remain marginal. The region has a number of on-going special projects of large scale intensive estate type, either as ranchesor irrigation schemes, for rice, cotton, and sugar cane. Large scale farminghas therefore a certain role to play in this region (see also Annex VIII).Smallholder development is basically hampered by lack of support services.The planned Volta Region Agricultural Development Project is designed to meetthe most urgent need of this area. Further irrigation development is plannedin the south, but this depends on whether sufficient water is available fromthe Volta Lake. An inventory study of water availability for this region isproposed under the Volta Region project. Improving infrastructure in theunderpopulated northern part would further develop its potential for yam andrice production. Bullock cultivation is not practised in the region butshould be promoted in the long run as the most economical means to improvethe productivity of smallholdings (see Table 15). Though this would besubject to the availability of bullocks and the control of trypanosomiasis.

ANNEX iPage 5

Improvement measures for farming systems in the marginal south should layemphasis on improving the nutrition base by growing better ecologicallyadjusted crops such as shorter maturing maize, millets, sorghum, and legumes

in intercropping systems.

(ii) Eastern Region

6. The region comprises two heterogenous zones: the forest zone,occupying half of the area, and the savannah zone, split into the copsta1

savannah of the Accra plains and the interior savannah of the Afram plains.Each of these zones has a different potential, faces different problemsand therefore requires different development measures. The Eastern regionwas earlier developed than the neighboring regions and therefore enjoys arelatively better infrastructure. With about 1.5 million inhabitants it isthe second most populated region, the majority living in the forest beltwhere population densities reach 100/km2 in some areas, creating problemsof food supply, ecologic preservation and maintenance of soil fertility.

7. Corresponding to its ecological zones, about two thirds of theregion's cultivated area is covered by tree crops and one third by food-and industrial crops. The region ranks third in cocoa production and isthe country's first producer of oilpalm. For cocoa it has a comparativeadvantage, for oilpalm, only in its highger rainfall zones in the south-west. The forest zone produces 14 percent of the country's starchy staples,mainly cassava (18 percent), plantains, and cocoyam. Favored by a shortdistance to Accra, the region has become the most important supplier of thesefoodstuffs for Accra. The savannah and transitional zone provides 13 percentof the country's maize production, while cotton is growing in importance asan industrial crop.

8. The forest zone requires intensification of its leading cash crop,cocoa, by replanting and rehabilitation of existing plantations, as under-taken by an ongoing Bank financed project. To develop fully its oil palmpotential, further expansion of plantation and outgrowers is required,as undertaken by the ongoing Bank financed Kade project. Government'sambitious plans for oil palm expansion face problems of land availabilityand resulting land tenure difficulties, as hardly any unoccupied areascan be found, and further land acquisition with consequent compulsory movementof people is becoming increasingly difficult. Ecologically the forest zonefaces the long term danger of moving towards a derived savannah by continuingforest destruction. Remaining trees in the cocoa and foodcrop areas are cuteither by concessioners or by the local people for firewood, thus reducingthe forest cover for cocoa and annual crops. The resulting micro- andmacro-climatic changes could endanger growing conditions for its leadingcrops. A more active forest preservation policy is therefore needed, whichapplies to forest reserves as well as trees outside the reserves. Theconstant reduction of fallow periods in the foodcrop rotations posesproblems of soil fertility which require research to evolve farming systemsadapted to local conditions.

ANNEX IPage 6

9. The coas-al savannah and transitional zone consists to a large partof alluvial he^vy so Iof good fertility where mechanized crop cultivationis justified. Research, which in these areas (Kpong) has hitherto dealt withirrigated Farming only, should address itself to rotation and soils managementproblems under rainfed conditions. The Afram plains, cut off from access tothe eastern and Volta region by the Volta Lake, have remained relativelyunderdeveloped. Abou 55 percent of their soils are of medium fertility, withan adequate rainfall c 1,200 mm offering good potential for annual crops,such as maize, cott.oa groundnuts, and yams. The remaining less fertile soilsare suitab-Le for grazing. Citrus, cashew nuts and sunflower, as well asvegetables, for which Lhe potential is likely in this area, have not beentried, but should be pro-lm,oted through a concentrated research effort. Inspite of its insufficient physical and social infrastructure, about 35,000people have spontaneously migrated to this area that may take a total popula-tion between 100 and 200,000 people. To develop it, a comprehensive surveyis required to obtain more information about its potential and the costs todevelop it. The study should provide sufficient information on accessfacilities by lake, and on roads, water supply, social infrastructure, andimmigration potential. It should also show the origin of immigrants andtheir motives as a basis for a planned immigration policy. A planned devel-opment effort in this region should include the promotion of ox-cultivationto combine the effects of an increase in productivity and soil fertility asa first step towards integrated livestock farming in this area.

(iii) Cent ra Regaon

10. In termS of area and population the Central Region is one of thesmallest. However, with 68 rural people per km2, both in the forest zone(covering four fiFt^hs of the area) as well as in the coastal savannah part,it is the most densely populated area. Owing to the relatively equal popu-lation distribution and central location, infrastructure is relatively welldeveloped.

11. The produci on potential as well as the problems in the forest zoneresemble largely th-o-se of the forest zone in the Eastern Region. It is animportant producer of cocoa and oil palm 1/ as well as starchy staples, amongwhich cassava ranks first. Plantain production has suffered severe setbacksduring recent years, possibly due to disease problems similar to that in theneighboring Western region) forcing farmers to uproot plantains after 2 yearsand leading to serious shortages of suckers in the affected zones. Thisexplains in part the exessive rise in plantain prices during the last years.

12. In the coastal savannah part of the region irrigated sugar caneis grown west of Komenda; further irrigation possibilities exist for a3,400 ha su-gar cane and vegetable irrigation scheme at Ayensu. Rainfedagriculture, although of limited potential owing to low erratic rainfallin two seasons, is nevertheless fairly well developed with the help of an

1/ The World Bank is financing an oil palm project at Kade.

ANNEX IPage 7

ongoing FAO fertilizer project and the integration of small livestock.This area is an important supplier of pig and poultry products to Accra.Mechanized farming, carried out on some farms, appears marginal and facesproblems of soil fertility maintenance on the sandy soils. The coastal zoneoffers a potential for citrus that is partly realized by the establishmentof two factories processing lime and lemons. The main development potentialrests with the forest and transitional zone where a general intensificationof tree and foodcrops is required.

(iv) Western Region

13. The region is fully covered by forest, one third of which is highrainfall (evergreen) forest. It is the least populated and the least devel-oped region in the forest belt, with population density and road densityabout half of the other forest regions. Together with the Ashanti andsouthern part of Brong Ahafo region, the only sizable timber resources arefound here. The region owes its present development partly to gold andbauxite mining, which is causing strong competition between agricultural andnon agricultural labor, especially after introduction of the Aliens Act in1972. Owing to relative abundance of land, farm size and cultivated area perfamily member are twice as high as in the densely populated forest regions.Agricultural development has been mainly concentrated in the south, wherethere has been some decline after a successful start (rubber and rice).

14. Coconut is the leading tree crop, the region producing over 90%of the country's coconuts. Since the mainly smallholder plantations areprogressively spreading inland from the coastal belt, the region offersa potential for substantial production increase. Recently, however, occur-rence of St. Paul disease has also been observed in this region, endangeringthe who-Le industry if no resistant varieties can be found. Ghana is toundertake a joint program with the Ivory Coast to replant affected areaswith more resistant varieties on an experimental basis under the managementof IRHO.

15. Rubber production, mainly in the southeast, is increasing on theplantations of Firestone (10,400 ha). In the early stages about 4,400 hawere planted by speculative private growers. Government's efforts (throughestablishment of a tapping school) were largely unsuccessful to inducegrowers to tap on their own account without further government support. Asthe region has some potential for further rubber development, attemptsshould be made to interest farmers in rubber production. Experience gainedunder the Bank financed pilot rubber rehabilitation project in Liberia 1/might b,e helpful. Oilpalm production on estates and with outgrowers isalso expanding, although the region is not the optimum area for oilpalm,and yields have been relatively low. Cocoa is grown mostly in the northeast.

I/ Where farmers were induced to undertake a program of slaughtertapping and replanting under good extension.

ANNEX IPage 8

16. Rice has been an important crop in the bottomlands of the southernand central parts, but rice production had declined because bird problemscould not be overcome. A rice mill established at the coast had to beclosed. In view of a considerable potential of this region, rice productionshould be promoted on a pilot basis to experiment with new methods for birdcontrol. Experimental results confirm that compared with mechanized ricecultivation in the north, smallholder rice production in this region wouldbe economically superior since yields are higher and quality is better owingto less breakage.

17. The region has a limited potential for citrus. Developing thisfurther would require small processing units for juice manufacture. Thepotential for starchy staples, mainly cocoyams, plantains and cassava ishigh, but its realization is hampered by lack and insufficient maintenanceof feeder roads. The declining in area under these crops indicates thatfarmers have reduced plantings for lack of market access. Plantains arefurthermore hampered by disease problems (possibly nematodes) causing farmersto rotate more frequently. MOA attempts to increase sucker supply on newplantations, but an intensive research effort is needed to overcome thisproblem.

18. In summing up it can be said that the Western region offers con-siderable potential for further agricultural development. Investments ininfrastructure to provide market access as well as improvement of supportservices could drastically increase this region's production. This wouldalso allow further immigration from neighboring densely populated forestregions. Such a development would undoubtedly go at the expense of remainingnatural forest. It should therefore be accompanied by a forest preservationpolicy demarcating the areas to be reserved for natural forest production.

(v) Ashanti Region

19. The region extends from semi-deciduous forest over its northerntransitional zone to the northern savannah. It is the most populous regionwith the country's second biggest urban center, Kumasi. In line with theother forest areas, its productivity is hampered by lack of infrastructure,especially feeder roads. Timber exploitation still plays a role in itsnorthern and western zones, partly in densely populated cocoa areas, creatingproblems of farm destruction and compensation, although a law provides forcompensation to farmers. 1/

20. Because of its central location in the country's forest zone, theregion ranks first in production of cocoa, but is also an important producerof oilpalm, although for both crops some of its growing areas are marginal.With almost a quarter of the national production the region is also the

1/ Compensation by concessioners remains nominal, leading farmers tocut trees in their cocoa areas themselves in order to avoid damageby concessioners.

ANNEX IPage 9

country's biggest producer of starchy staples, especially plantains (25percent). In its southern part the region has a limited potential for rice inbottomlands. Maize and cotton have become important crops in the transitionalzone. Development problems in the forest zone resemble those of neighboringforest areas. Growing population pressure reduces the forest and shortensthe fallow periods in some areas, although this problem is less accute thanin the Eastern and Central regions. Average farm sizes of 1,8 ha remainconsiderably above the average 1 and 1,2 ha in those regions.

21. In the transitional zone of the northern fringe of the forest,around Ejura and Mapong, a considerable expansion of mechanized farming forthe production of maize and cotton has taken place. This development,benefiting during the first years of cultivation from the built up fertilityof the cleared forest soils, is likely to lead to serious problems. As soilson the older farms indicate, continuous cultivation of shallow rooting annualcrops has largely destroyed the structure of these soils. For maintenance ofsoil fertility and yield levels, these soils require cultivation at variousdepths, growing of deep rooting crops in rotations, as well as rest periodsfor building up soil fertility. Since ongoing research is hardly making anycontribution to these problems, further development of this kind should behalted until the soil fertility problems have been overcome. The northernsavannah soils of the region are partly of lower fertility allowing onlypasture and game reserves.

(vi) Brong Ahafo Region

22. Two thirds of this region belong to the northern savannah. Theforest zone in its southern part was formerly part of the Ashanti region.Located in the north east corner of the forest belt and the thinly populatedmiddle belt, this region is less developed than the other forest regions.Consequently its road density is one of the lowest. Production is equallydistributed between starchy staples in the forest zone, and maize and cottonin the savannah zone. The latter is the country's biggest yam producer (38percent). Cocoa, although grown in most of the forest zone, remains marginalin parts of it. This is confirmed by the movements of cocoa growers whoimmigrated from the Eastern region during the sixties but returned afterthe start of the Bank financed cocoa rehabilitation project there.

23. The forest zone requires improved road infrastructure to realizeits potential for starchy roots and timber exploitation. The same applies tothe thinly populated Atebubu district, which is part of the northern Aframplains. This area has a considerable immigration potential, once opened up.Its sandy soils, however, require careful management with fertility improvingcrops and rotations. With careful consideration of its soil managementproblems and the growing of adjusted crops and varieties, this zone can beexpected to develop into a main producer of annual crops such as maize,cotton, groundnuts, and yams. Its potential for citrus, upland rice,cashew, sunflowers and shea butter should be further tested and developed.Introduction of ox cultivation, so far not practised in this area, wouldprovide scope for productivity improvement and might lead towards integratedlivestock farming in this area as well as the Wenchi plateau adjoining it

ANNEX IPage 10

to the east. In the long term, therefore, in the northern savannah parts ofthe Brong Ahafo region an integrated development approach might be considered.The region requires a heavy emphasis on infrastructure and marketing improve-ment. Presently a USAID financed project aims at improving agriculturaland infrastructural support services in the Atebubu district.

(vii) Northern Region

24. Except for its extensive bottonlands, the Northern region is largelysimilar to the savannah part of the Brong Ahafo region.2 It is the biggestregion with the lowest population density (9 persons/km ) and has the leastdeveloped road system. Until recently this region was relatively neglectedand only since 1970 has it developed into the country's largest rice andcotton producer, with groundnuts taking second place. This development waslargely due to the introduction of mechanized rice production aided by aGerman-financed Agricultural Development Project.

25. Of the region's estimated 60,000 ha bottomlands, suitable formechanized rice cultivation without water control, about half are presentlycultivated. Inspite of impressive increases in improved seed and fertilizeruse, average yields have hardly exceeded one ton per ha. As this is insuf-ficient for economic rice production, only excessive Government subsidization,in addition to cheap machinery imports has allowed this development tocontinue. Government is therefore faced with the crucial question, whetherit has alternative areas for more economical rice production, or whether itis possible to raise productivity in the Northern region to economic levels.Since alternative rice production possibilities (mainly in the Western andVolta regions) remain limited and in any case require considerable developmentexpenses, government policy must be to improve productivity of rice productionin the Northern region.

26. At present various limiting factors prevent the attainment ofhigher yields:

- The rainfall distribution, with a probability of unfavorabledistribution in about two of five years, prevents highaverage yields, with a chance of crop failures as in 1976.The means to overcome these handicaps are: choice of arelatively drought resistant variety, avoidance of culti-vation in marginal areas at the sides of valley bottoms,and timely execution of work.

- Low management standards, caused mainly by overextensionof areas, result in poor seed bed preparation, and lateplanting and harvest. Progress in this field, mainly amatter of training farmers, has been remarkably slow inspiteof the existence of an agricultural development project andand FAO-Mechanization Training Project. The success ofthese projects was hampered by the fact that farmers werespoiled by excessive subsidies.

ANNEX IPage 11

Weed problems are estimated to be responsible for an averagereduction in yield of 50 percent. Excessive weed growthoccurs generally after 3 years of cultivation on poorlymanaged farms. Intensive weed control by hand methodsremails uneconomical at low yield levels. The same appliesfor chemical weed control through aerial spraying, theeffectiveness of which is hampered by lack of water control.On well managed farms, however, the weeds were kept undercontrol.

- Poor land clearing resulting in exessive breakage and poorperformance of machinery. The clearing unit of the German-financed Agricultural Project aims to rectify this by clearingabout 2,200 ha per season.

- Crop losses through bush fires and shattering. An effectivefire guard service would be necessary, as well as moreharvesting capacity to allow early harvesting.

27. The above discussion of main problems highlights that most of thesecan be reduced significantly by higher management standards and better adjust-ment to local conditions. In addition, improvement of tillage systems andmachinery (tillage after harvest, chisseling, etc) as well as limited watercontrol measures, could contribute to better yields. All training efforts,however, will remain relatively fruitless as long as financial incentives aresuch that they kill the drive for efficiency. A combination of both couldresult in significant higher yields on a reduced acreage, raising averageyields to about 2.5 tons/ha, thus rendering mechanized rice cultivationeconomic to the country.

28. The region offers opportunities for irrigated rice production inrelatively unexpensive water control schemes. Trials indicate a soyabeanpotential, especially in the higher parts of the rice bottom lands. Inten-sification of upland production is possible through extension of cashew, cotton,

and sunflower cultivation, and introduction of animal draft. The region'slivestock potential is not yet fully developed. An integrated developmenteffort is needed, foreseen under the program for the economic development ofareas freed from riverblindness. The human resources for this developmentwould be available in the overpopulated central and eastern areas of theUpper region 1/. Under these conditions the Northern region could become amain supplier of cereals, grain legumes, livestock and cotton.

(viii) Upper Region

29. This remotest region with the lowest rainfall, between 800 and1,100 mm, is nevertheless densely populated, especially in its eastern andcentral parts. Over 90 percent of its rural population is working in agriculture,

1/ Calling for an encouragement of migration from these areas.

ANNEX IPage 12

a sign of the region's relative underdevelopment. In addition, similar tothe Northern region, it is hit by riverblindness in its more productivevalleys. This situation confronts Government with the need for a specialdevelopment effort for reasons of geographical income distribution.

30. The region produces one third of the country's cereals, mainlymillet and Guinea corn, while maize remains marginal. Groundnut productionamounts to over 50 percent of the country's total production, exceeding thatof the Northern region. It ranks second in the country's cotton productionafter dramatic increases in area over the last 5 years, but yields haveremained relatively low. Yam cultivation is concentrated in its westernpart, while vegetable production under irrigation from small wells and damsincreases gradually with the improvement of water supply from newly builtdams and ongoing irrigation schemes in Weya and Tono. This development,however, has to go a long way before it can provide the presently underutilizedtomato factory near Bolgatanga with sufficient deliveries for economicproduction. Compared with the Northern region, the Upper region has smallerbottomlands with heavier soils. In the neighborhood of densely populatedareas, rice cultivation dominates as smallholder production. It is the onlyregion with significant ox cultivation.

31. The region's potential lies in annual crop cultivation combinedwith livestock production. Integrated livestock and fodder crop cultivationwould significantly improve the soil fertility of the region's sandy soilsin the center and the east, where population pressure enforces permanentcultivation of the compound farms near the homestead. The region thereforerequires an integrated development effort as undertaken by the ongoing Bankfinanced Agricultural Development Project. In addition, its irrigationpotential should increasingly be realized by special projects for vegetableproduction to provide sufficient smallholder income for the underemployedpopulation. Upper and Northern region are complementary to each other in thatthe Upper region has the human resources that the Northern region requires.Development of both regions should therefore be planned together, with theinclusion of an active migration policy.

C. Crop Potential

Cereals

32. Based on projected demand for foodcrops in 1985, the requiredannual growth rates of production have been calculated in Table 11. Tomeet future maize demand, including that for a growing feed industry, produc-tion would have to increase by about 4 percent annually if future demand forhuman and animal consumption is to be met. Required annual production in-creases for sorghum and millet remain below 1 percent and those for grainlegumes, below 2.5 percent. Expected future rice demand, however, wouldrequire annual production increases around 8 percent if all demand were to bemet from home production. Negative growth rates shown for starchy staples areprobably due to inaccurate production statistics. As indicated by the recenthigh price increases, especially for plantains, present demand for these cropsis not satisfied. Past performance does not give reason for optimism. Over

ANNEX IPage 13

the last 6 years area and production of cereals have decreased by 20 percentwhile yields remained stagnant at a relatively low level, below one ton perhectare. In spite of a sizeable extension service (Table 12), aided byspecial efforts of the Grains Develoment Board (GDB), and in spite of consi-derable increase in fertilizer consumption (Table 13) production has continuedto decrease. Unfavorable weather conditions in 1975 and 1976 are responsiblefor the latest shortages and therefore some revival can be expected in clima-

tically normal years, but it does not change the picture of an overall stagna-

tion.

33. Maize. Area under maize declined almost continuously during thelast 6 years (Table 7). Since yields remained stagnant at a level below

one ton per hectare, production declined accordingly. A bumper crop in

1974 brought the country back to self-sufficiency and even surplus production.Owing to lack of storage capacity, buying agents were unable to purchaseall surplus produced and average farmgate prices declined accordingly. As aresult farmers reduced areas planted to maize by a further 25 percent. The

combination of reduced acreage plus unfavorable weather conditions in 1975

led to an even sharper decline in production by 30 percent, and first esti-mates indicate a further reduction for 1976, again a year of generally unfavor-able weather conditions. The sharp price increases as a result of the presentmaize shortage should suffice to induce farmers to plant more maize in future.

However, price stability, being more important as farmer incentives thanhigh prices, cannot be assured without adequate storage capacity of the

buying agents. Increase of storage capacity would therefore be the firstpre-condition for higher maize production. Given the present low yieldlevel, there is sufficient scope for production increase through yieldimprovement rather than area expansion, requiring relatively little addi-

tional labor input. With trial results of between 3 and 4 tons per ha inthe main production areas, average yields of 1.5 tons per ha could be obtained

with improved packages, thus increasing present production by more than 50percent. Comparative farm budgets show that under such conditions maizeproduction compares favorably with other foodcrops on smallholdings where handor ox cultivation is used (Table 15).

34. Such anticipated yield increases necessitate a drastic improvementof present support services. The extension service would require an ambitiousdemonstration program similar to GDB's present program, accompanied by thenecessary staff training effort. Seed production and multiplication, thesecond important bottleneck, would require drastic improvements along thelines proposed in annex IV. Present production of improved seed wouldhave to increase from quantities currently covering about 10 percent of theplanted areas under maize, to 30 percent, if the drastic increase of fertilizersupply since 1976 is to have a sufficient impact and not to be economicallywasted. A calculation of fertilizer use indicates that in 1976 more than onethird of all areas under annual cash crops can be anticipated of having beenfertilized 1/ (Table 14). Although the bulk of fertilizer used was for rice,

1/ The calculation does not consider any losses through smuggling acrossthe border, to which the present excessive subsidies give strongincentives.

ANNEX IPage 14

cotton and maize have received substantial quantities. However, no impacton the production of maize can be observed. In general prospects forincreased maize production, sufficient to attain the required annual growthrates of 4 percent (Table 11) are good, provided a drastic improvement ofstorage, seed production and demonstration capacity can be achieved.

35. Rice. Paddy is produced on 78,000 ha, of which 48,000 and 6,000 haare grown in the Northern and Upper Regions respectively, the remaindermostly in the Western Region. Area and production have increased by over 40percent during the last years. Government's policy of encouraging mechanizedrice production by heavy subsidization of inputs, aided by low machineryprices owing to the exchange rate, is responsible for this rapid expansion.Average yields, however, have remained below one ton per hectare and mechanizedrice cultivation shows a loss if proper prices are used (Table 15). Governmenttherefore finds itself supporting an uneconomic crop under present circumstances.There is little scope to change the production system in the North since lackof labor and heavy soils dictate mechanized cultivation if the availablealluvial soils are to be used. Equally, possibilities to cultivate alternativecrops on these soils are limited by the excess water (or lack of watercontrol) in the rainy season. There is, however, scope for yields increasesthrough higher management standards as discussed in para 26. Also, a limitedexpansion of rice cultivation under hand cultivation conditions in the smallvalleys of the forest zone in southwest Ghana is possible, as discussed inpara 16. On the other hand, rice consumption in the national diet amounts toonly 10 percent of total grain consumption, the staple grains being maize andmillet/guinea corn, varying with regional preference. Rice still plays therole of a luxury grain, mostly consumed by the urban population. Given thelimited potential for economic rice production in Ghana, substitution of riceconsumption by grains for which sufficient local production potential exists,would minimize economic losses. If imports remain restricted as at present,prices for rice are bound to remain high, limiting demand for rice on the oneside, while removal of subsidies would have a consolidating effect on mecha-nized rice production on the other. The inefficient producers would beforced out of production, while the potentially efficient would be induced toimprove their management standards. Such a consolidation policy with regardto rice would run contrary to present expansion plans. Under the Five YearPlan production is expectd to double, which would mean that the presentgrowth rates would be pursued. A reorientation of rice policy along the liesmentioned above would seem to be called for,

36. Millet and Guinea Corn. The production of millet and guinea corn,amounting to 37 percent of cereal production, has slightly declined over thelast 6 years. This is mainly due to declining yields on the intensivelycultivated soils of medium fertility in the Upper Region. The Upper RegionAgricultural Development Project is expected to revert this declining trend.Thus, satisfying a slowly growing, locally restricted, demand in the futureshould not present problems.

ANNEX IPage 15

Starchy S>:aples

37. Area under cultivation of starchy staples, (plantains, cassava,cocoyams and yams) has decreased by over 20 percent during the last 6 years.The decline in area has been offset by yield increases for cassava andcocoyam so that production remained nearly constant. Above average priceincreases for starchy staples, especially plantains, indicate that presentdemand for these crops is not being met. As starchy staples are mostlymarketed in their perishable unprocessed state, transport and marketingfacilities are decisive for an adequate supply to urban centers. Lack ofmarket access owing to transport difficultires has been the major cause forinsufficient supplies of products from the forest zone (plantain, cocoyam)as well as from the more remote yam growing areas. Improvement of infra-structure and transport would therefore improve the supply response offarmers to present high prices and reduce the presently excessive margins.

38. Plantains. Plantains are mostly grown in mixed stands, either as acover crop for cocoa or among other foodcrops of the forest zone. Area andproduction have decreased by over 20 percent during the last 6 years. Yieldshave slightly declined. Nematode infection in some of the areas, especiallythe Western region, has contributed to this. Farmers are therefore forced touproot and replant earlier and a shortage of plantain suckers has developedas a result of this. Intensified research to detect causes for nematodeinfection, as well as increased sucker production are therefore required.Government has started a number of plantations for sucker production withits own extension staff. To put these operations on a permanent and com-mercial basis, farmers should be trained to undertake sucker production asa commercial enterprise in areas where a market for these develops. Thispresupposes that suckers are sold at a market price, warranted under currentlyhigh plantain prices. Further production increases are thus hampered bydisease problems and sucker availability on the one side and a lack ofmarket access on the other. Since overcoming these difficulties will taketime, the prospects for adequate plantain production are not bright in theshort term. Possibilities to increase present exports of plantain chipsto England will therefore also remain limited.

39. Cocoyams. Grown also in the high rainfall areas, cocoyam productionsuffers from the same deficiency in market access. Cocoyams, however, aremostly grown as subsistence crop with a relatively small marketable surplus.In addition to the roots, cocoyam leaves play a vital role as protein supplierin the forest zone to offset malnutrition through exessive consumption ofstarchy f-oods. Past declines in area have been offset by yield increases,but starting from a relatively low level. With limited intensificationpossibilities, further production increases would mainly have to come fromarea increase, but not much further suitable land is available.

40. Cassava. Production of cassava had been increasing, largely dueto rising yields, up to 1975 when a decline in area by 25 percent coupled to adrop in yield, sharply reduced output to the 1970 level. Main productionareas are in savannah and transitional zones of Eastern, Brong Ahafo, and

ANiNEX IPage 16

Volta region. The crop is usually grown at the end of a rotation within afarming system, after which the land is allowed to regenerate during a fallowperiod. Cassava, being a demanding crop, requires heavy fertilization,especially with Kalium, if grown under intensified conditions, but offers goodprospects. Yields obtained in experiments and demonstrations exceeded presentyields of 6 tons/ha threefold. With traditional farmers cassava is appreciatedfor its drought resistance and relatively good yields on poorer soils, wherecassava often acts as a famine reserve. Lately, processing for gari, pellets,and chips has developed, especially on a small scale using intermediatetechnology (Annex XI). In addition, cassava is increasingly used as animalfeed especially for pigs. As there is sufficient land available for expansionand the comparative position of intensified cassava production is good,prospects for increased cassava production appear favorable, allowing incresedexports for processed cassava and use as animal feed. The expansion would belimited by labor availability.

41. Yams. Area under yam shows the strongest decline (30 percent over 6years) among the starchy staples, only partly offset by increasing yields.During the same period prices increased less than for gari (cassava) on theconsumer markets, indicating a shift in consumption away from yams. Thereduction in yam cultivation is mainly due to two factors: as a labor inten-sive crop it suffers from competition from maize, cotton and groundnuts;secondly, it lacks market access from the remote yam growing areas. Althoughyams respond well to fertilizer application, less labor demanding crops suchas maize and cotton retain a comparative advantage over yams. In addition,lack of infrastructure will not be overcome in the short term. Only furtherdevelopment of the more remote areas, including immigration into these,would improve yam supply. The prospects for increased yam production aretherefore not very bright.

Grain Legumes

42. Groundnuts. Groundnuts account for over half the area grown undergrain legumes. They show a slight increase in yield and production. Over85 percent of cultivated area under groundnuts is concentrated in the north,where production more than doubled in the Northern region, while it declinedin the Upper region. An increasing share is grown for oil production. With1,200 kg/ha (in shell), yields of groundnuts are fairly good, indicatingfavorable growing conditions. Yet the expansion of groundnut production islimited by labor availability and competition with other crops, rather than byland availability.

43. Beans and Cowpeas. These legumes are often grown in mixed standsor as a second crop in the rotation. Owing to their low yields their ex-pansion will always be limited; nevertheless they play an important role inthe national diet as a supplier of protein. Their production will increasein conjunction with the spread of intensified farming. Under these con-ditions cowpeas, responding well to pest control, are expected to assume amore important role.

ANNEX IPage 17

Vegetables and Fruits

44. The increase of vegetable production of 32 percent over the last 6years reflects a growing demand in urban areas. This increase was aided by anumber of irrigation schemes and special projects, especially in the coastalsavannah. In the past, expected growth of production has been grossly over-estimated, indicated by the excess processing capacity created in many areasof the country. Growth of vegetable production is however linked to specialprojects -- irrigated or rainfed -- in which support services are adequate

for the required extensity of production. Lack of support services forproduction was therefore responsible for backlog of production behind capacity.Tomatoes for fresh consumption and processing remain the most importantvegetable crop. Present production centers are in the Eastern, Ashanti,and Volta region. Added to these will be irrigation projects in the Upperregion as well as in the coastal savannah. With the implementation of theseprojects, a considerable increase of tomato and vegetable production cantherefore be expected. There is a potential for citrus mainly in the transi-tional zones north and south of the forest belt. Whereas the market for limeand lemon is assured by existing processing plants, small processing units inother areas would be required to induce production increases beyond localfresh fruit requirements. The potential for bananas and pineapple appearslimited. Any encouragement of production should be preceded by carefulanalysis of export markets, as these appear fairly saturated.

Industrial Crops

45. Since 1968 Cotton cultivation has shown a dramatic expansion,exceeding 23,000 ha in 1976 (Table 9). Two thirds is grown in the Upperand Northern regions. Drastically increased prices in 1974 led to a five-fold expansion of areas in 2 years. Government's price policy, guided byimport substitution targets, has led to an expensive domestic production,as yields are still low and production costs remain heavily subsidized.Especially mechanized land preparation for block cultivation would requirehigher management standards to become economical. Cotton production shouldtherefore undergo a consolidation phase where further production increasesare mainly achieved by yield increases brought about by the strengtheningof support services. To this end, all measures for production promotion,now carried out by the Cotton Development Board should be transfered tothe relevant units in the regional office of the MOA where these have beensufficiently strengthened along the lines suggested in annex IV. This wouldenable CDB to concentrate on efficient marketing and processing. Tobaccoproduction shows a steady increase in flue, air and fire cured tobacco (Table10). As a labor intensive smallholder crop its further expansion will belimited by labor constraints. Nevertheless, continuing attractive pricesshould put tobacco in a sufficiently strong competitive position to ensure afurther gradual increase of tobacco production in line with the expansion ofspecial extension services for this crop. Production of kenaf has remainedstagnant, with the local production providing only 5 percent of domesticrequirements for bag manufacture. Labor constraints for processing anduncompetitive net returns from this crop are the reasons for this. The

ANNEX IPage 18

policy of the Bast Fibre Development Board to provide mechanical land prepara-tion at heavily subsidized rates and to undertake processing on its ownaccount, has not provided sufficient incentives to reverse the trend and ledto a costly domestic production that cannot compete with cheaper imports. Thepolicy of import substitution in bast fibres should therefore be reexamined.Sugar is mainly produced on two nucleus estates, one at Asutsuare in the AccraPlains, the other at Komenda, on the coast of the Central Region. Onlylimited areas are suitable for commercial production. Inadequate rainfall isrestricting potential in the north, whereas in the central part the dry seasonis too short. In the coastal region the Accra Plains have suitable soils forwhich the Volta river can provide irrigation water. Lack of soil surveys andon-site experimental work restrict the prospects for large scale production inthe near future, though espansion of the existing estate at Asutsuare maybe feasible. At village level, the production of unrefined brown sugar,using low-cost technology, is an interesting alternative that deserves atten-tion.

Tree Crops 1/

46. Coconut. As a crop of the coastal sands, coconuts are mainlyconcentrated in the Western region with small patches in the Central andVolta regions. Coconuts are mostly grown by smallholders who regard theirplantations often as old age insurance. The tendency is to move inland withcoconut cultivation. With the outbreak of the St. Paul disease in the Voltaand Western region, the future of the coconut has become uncertain. No curefor this lethal disease has been found and the success of the planned experi-mental program with planting of more resistant varieties remains uncertain.A long gestation period has to be overcome before its effect can be assessed.Meanwhile trials with multistoried farming, consisting of combinations ofcoconut with cocoa and other bush crops, should be undertaken; this wouldalso allow an assessment of the effect of intercropping on plant health.

47. Oilpalm. Oilpalms are presently grown on about 150,000 ha, showingan increase of about 30 percent over the last 6 years. Only about 20,000 haof these are in pure stands, i.e. commercial plantations, while the remainderconsists of mixed stands of small plantings, often in marginal areas where allpalmoil is used for home consumption. Large commercial plantations areundertaken either by private companies (Unilever), public corporations (State-farms) or development projects such as the Bank financed project in theEastern region. All have an outgrower component, usually amounting to lessthan 50 percent of the area under the nucleus plantation. With 6 tons/ha,yields of established plantations are still low, partly due to marginallocations and partly to poor management. Expansion of commercial oilpalmplantations is limited to the high rainfall zones in the Eastern, Central, andWestern region. Government's ambitious plans to expand oilpalm plantations

1/ Cocoa prospects are discussed in Annex II.

ANNEX IPage 19

which, in addition to plantations in the public sector, encourage privatecompanies to invest the non transferable part of their profits in plantationdevelopment, may be constrained by land availability and cause land tenureproblems. An inventory of potentially suitable land, not claimed by ownersand cultivators, *, -uld help to establish realistic oil palm developmentprogram.

48. Rubber. Rubber production is mostly derived from the 10,000 haFirestone plantation in the Western region. The company plans a furtherexpansion of 6,000 ha, while the State Farm Corporation and other privatecompanies plan to enter into rubber production as well. Small privaterubber plantations on the other hand have shown limited success, since mostof the established 4,400 ha have remained untapped for lack of interest.Their revival would depend on government's ability to induce farmers totake up rubber production in a rehabilitation program. There is still suf-ficient potential for expansion of rubber plantations in the high rainfallzones of the Western and Central region.

49. Other Tree Crops. The potential for cashew and shea trees in theAfram plains, the Brong Ahafo and Northern regions has been largely untapped.Government has lately taken interest in cashew production, but a concertedeffort with a network of pilot plantations in potentially suitable areasshould be undertaken to assess potential and economics under local specificconditions from where a realistic development program for these crops couldbe derived.

APPENDIX

LIST OF TABLES

No.

1. LAND USE IN GHANA

2. DISTRIBUTION OF ECOLOGICAL ZONES OVER THE REGIONS

3. STRUCTURAL DATA OF REGIONS

4. AGRICULTURAL CHARACTERISTICS OF REGIONS

5.a & b SHARE OF REGIONS IN CROP PRODUCTION

6. AREA, YIELD, AND PRODUCTION OF MAIN CROPS

7. ANALYSIS OF MAIZE PRODUCTION

8. RICE PRODUCTION IN THE NORTHERN REGION

9. DEVELOPMENT OF AREAS UNDER COTTON BY REGIONS

10. PRODUCTION,YIELD, AND PRICES OF TOBACCO PRODUCTION IN GHANA

11. REQUIRED PRODUCTION INCREASES TO MEET DEMAND FOR FOOD ANDFODDER CROPS IN 1985

12. EXTENSION DENSITY IN THE REGIONS

13. FERTILIZER CONSUMPTION IN THE REGIONS

14. DEGREE OF FERTILIZER APPLICATION IN GHANA

15 a - i RESULTS OF FARM BUDGETS PER HECTARE

MAP

1. ECOLOGICAL ZONES IN GHANA

/~~~~~~~~~~~~~~~~~~~~~

APPENDIXTable 1

LAND USE IN GHANA(1970)

000 ha %

Total geographical area 23876 -

Total land area 22703 100

Reserved forest 2436 10

Unreserved forest 5423 24

Total area cultivated 2582 11

of which food crops 1117 5

Bush fallow 12262 55

Ratio bush fallow/Cultivated food crop 11:1

Source: FAO Perspective Study of Agricultural Development forGhana.

DISTRIBUTION OF ECOLOGICAL ZONES OVER THE REGIONS

Ecological Zone Western Central Eastern Volta Ashanti Br. Ahafo Northern Upper Total

High Rainfall Forest 853 (36) 853 (4)

Semi Dissiduous Forest 1534 (64) 797 (82) 850 (44) 721 (18) 1092 (30) 4694 (21)

Transitional Zone 283 (15) 834 (50) 1242 (50) 2359 (11)

Coastal Savannah 174 (18) 486 (26) 813 (50) 1473 (7)

Northern Savannah 283 (15) 765 (32) 2549 (70) 6637(100) 2711(100) 12945 (57)

Total 2387(100) 971(100) 1902(100) 1647(100) 2428(100) 3641(100) 6637(100) 2711(100) 22324(100)

Source: FAO Perspective Study of Agricultural Development for Ghana

I- m

STRUCTURAL DATA OF REGIONS

Population 1973 t000)-/ Percent No of 2/ Rural Road -/REGION Area Total Urban Rural Rural Agr. Holcings Population Density

(Km2) Population 1973 (000) Per Km2 Km/Km2

VOLTA 30 372 1012 172 840 83 115.5 28 0.12

EASTERN 19 712 1324 349 975 74 181.7 50 0.12

CENTRAL 9 764 941 279 662 70 88.1 68 0.22

WESTERN 23 695 825 229 596 72 76.5 25 0.11

ASHANTI 24 089 1624 512 1112 69 146.4 46 0.13

BRONG AlU.J0 39 047 833 205 628 75 83.7 16 0.09

NORTHERN 69 079 803 185 618 77 59.8 9 0.05

UPPER 27 092 901 73 828 92 106.0 31 0.09

GREATER ACCRA 2 547 1009 884 125 13 45.1 50 0.26

TOTAL 235 397 9272 2888 6384 69 902.8 27 1.19

Source: 1/ Population Census 1960 and 19702/ Ghana Sample Survey of Agriculture 19703/ Ghana Highway Authority -- Road Inventory Summaries.

I- tz

AGRICULTURAL CHARACTERISTICS OF REGIONS

Cultivated Area (1970) Per Household Cultivated Area Per Hold ing

REGION Total Tree Crops Food Crops Persons Labor Units Total Per Fam. Memb. Per Labor Unit000 ha % % No No ha ha ha _ -

VOLTA 239 51 49 4.0 2.8 .9 .2 .3

EASTERN 312 69 31 3.8 2.7 1.2 .3 .4

CENTRAL 158 67 33 3.9 2.7 1.- .2 .4

WESTERN 243 78 22 4.3 3.2 2.- .5 .8

ASHANTI 595 78 22 4.4 3.0 1.8 .4 .6

BROUG ALAFO 506 72 28 4.7 3.2 2.2 .4 .7

NORTHERN 137 - 100 5.4 3.7 1.7 .3 .4

UPPER 348 - 100 5.2 3.4 1.7 .3 .5

GREATER ACCRA 45 9 91 .1/ .1/ .11 .1/ .1/

TOTAL 2583 57 43 4.4 3.1 1.6 .4 .5

1/ Greater Accra included in Eastern Region,

Source: Ghana Sample Census of Agriculture and FAO° Country Perspective Study.

D

APPENDIXTable 5a

SHARE OF REGIONS IN CROP PRODUCTION

(Avg. 1973-1975)

a) (000 metric tons)

VOLTA EASTERN CENTRAL WESTERN ASHANTI BR. ARAFO NORTHERN UPPER TOTAL

CEREALS 61.6 55.8 48.9 39.2 . 84.1 . 84.2 164.1 .241.0 .773,9

MAize 53.5 53.7 47.6 29.1 - 82.1 79.1 43.4 30 418.5

Rice (paddy) 5.5 2.1 1.3 5.1 2.0 3.7 41.5 7.3 68.5

Millet _ - - - - - 31.4 96.3 127.7

Guinea 2.6 - - - - 1.4 47.8 107.4 159.2

STARCHY STAPLES 720.1 975.9 724.3 907.7 1731.7 1307.0 343.3 84.3 6794.0

Cassava 551 531.9 337.5 351.9 532.2 458.9 170 22.7 2956.1

Cocoyam 37.6 206 102.6 279.4 403.1 282.8 - - 1311.5

Yat¶ 90.2 56.7 15.3 12.7 55.9 280.8 173.3 61.6 746.5

Planttain 41.3 181.3 268.9 263.7 740.5 284.5 - - 1780.2

GRATN LEGUMES 6.3 .9 .8 - 1.6 5.9 43.4 80.3 139.3

Groundnuts 6.3 .9 .8 _ 1.6 5.9 41.7 72.8 130.0Beans & Cowpeas - - - - - 1.7 7.5 9.2Bambara a. beans - - - - - - - - _

VErETABLFS 45.1 76.8 29.8 25.8 59.1 118.8 31.0 65.1 451.5

Tomatoes 12.5 35.6 8.7 8.0 14.6 16.3 - - 95.7Pepper 13.5 25.1 14.5 12.1 25.9 36.8 4.9 - 132.8

Okro 18.1 8.7 2.7 3.3 11.4 58.6 26.1 65.1 194.0Garden eggs 1.0 7.4 3.9 2.4 7.2 7.1 - - 29.0

FRUIT 7.9 7.0 13.2 18.9 105.4 17.2 _ _ 169.6

Oranges .9 3.6 9.8 7.2 103 11.4 _ _ 142.9Pineapples - I 2.4 3.4 11.7 I 2.4 5.8 _ _ 25.7

IDUSTRIAL CROPS 15.7 77.3 55.8 32.6 12.5 1.4 - 195.3

CottonRubber .3 .4 9.5 - - - - 10.2

Sugar Cane 15.7 76.9 55.4 23.1 11.8 - - - 182.9

Tobacco n.a. .1 n.a. - .7 1.4 - - 2.2

TREE CROPS 96.8 141.8 47.4 376.6 355.7 140 - - 1158.3

Coconut -_ 18.5 270.0 - - - - 289.5

Oilpalm 96.8 141.8 28.9 105.6 355.7 140 - - 868.8

Cocoa M of Agicltr

SOURCE: Mfinistry of Agriculture

APPENDIXTable 5b

SEARE OF REGIONS IN CROP PRODUCTION

(Avg. 1973-1975)

b) Percentages

VOLTA EASTERN CENTRAL WESTERN ASHANTI BR. AHAFO NORTHERN UPPER

CEREALS 8 7 6 4 11 11 21 31

Maize 13 13 11 7 - 20 19 10 7Rice 8 3 2 7 3 5 60 11Millet _- - - 25 75Guinea 2 - _ _ _ 1 30 67.4

STARCHY STAPLES 11 14 11 13 25 19 5 1

Cassava 19 18 11 12 18 16 6 1Cocovam 3 16 8 21 31 22 - -Yam 12 8 2 2 7 38 23 8Plantain 2 10 15 15 42 16 - -

G,RAIN LEGUMES 5 1 1 - 1 4 31 58

Groundnuts 5 1 1 - 1 5 32 56Beans & Cowpeas - - - - - - 18 82Bambara a. Beans. - - - - - - - _

VEGFTABLES 10 17 7 6 13 26 7 14

Tomatoes 13 37 9 8 15 17 - -Pepper 10 19 11 9 20 28 4 -Okro 9 4 1 2 6 30 13 34Garden Eggs 3 26 13 8 25 24 - -

FRUIT 5 4 8 11 62 10 - -

Oranges 6 3 7 5 72 8 - -Pineapples - 9 13 46 9 23 - -

INDUSTRIAL CROPS 8 40 29 17 6 1 - _

CottonRubber 3 4 93 - - - _Sugar Cane 9 42 30 13 6 - - _Tobacco - 5 - - 32 64 - _

TREECROPS 8 12 4 33 31 12 - _

Coconut - - 6 94 - - - _Oilpalm 11 16 3 12 41 16 --Cocoa

SOURCE: Ministry of Agriculture

AREA, YIELDS AND PRODUCTION OF MAIN CROPS

Area In-Decrease Yields Annual Average Production In-Decrease

CROP 1975 Since 1970 0 190-1975 Growth Rate 1975 Since 1970

(000 ha) % kg/ha Since 1970 (000 m.t) %

CEREALS 805 - 19 874 - 2 671 - 21

Maize 320 - 29 1074 + 1 343 - 29

Rice 78 + 43 956 + 6 71 +46

Millet 199 - 20 595 + 11 122 -14

Guinea Corn 208 - 14 748 - 13 135 - 23

STARCHY STAPLES 837 - 22 6139 + 3 5452 - 3

Cassava 284 - 19 7749 + 24 2398 0

Cocoyam 205 - 21 4699 + 28 1099 - 3

Plantain. 230 - 20 5723 - 4 1245 - 24

Yam 117 - 32 5579 +16 709 - 22

GRAIN LEGUMES 249 - 5 1477 + 15 127 + 10

Groundnuts (in shell) 102 + 4 1193 + 24 111 + 9

Beans and Cowpeas 125 + 3 87 0 11 - 1

Bambara & Other Beans 22 - 31 197 +183 5 + 96

VEGETABLES 98 + 25 3888 + 6 396 + 32

Tomatoes 19 + 2 4741 + 3 90 - 2

Pepper 40 + 42 3071 + 11 118 - 25

Okro 32 + 16 4510 +35 159 + 57

Garden eggs 7 + 82 2844 + 62 28 + 182

FRUIT 32 - 13 4859 +21 173 - 1

Banana 4 - 30 1930 -14 7 - 56

Oranges 23 + 16 6530 0 150 + 17

Pinapples 5 - 47 3116 + 9 16 - 43

INDlUSTRIAL CROPS 25 + 50 7568 + 26 220 + 64~C~toon 4 + 462 502 +10 2 +450

Sugar Cene 6 + 45 3382 + 30 205 + 83

Tobacco 3 + 93 734 +32 2 +156

Txhh ctoJPbLOCOILUL jo + 3 j2b6 0 311 + 3Oil Palm 144 + 29 6276 - 1 901 + 30

Rubber ii + 12 ltu + 2 10 + 3

Cocoa

Source: Ministry of Agriculture

O H

ANALYSIS OF MAIZE PRODUCTION

Areas Under Crops Production Av. YieldsRegion 1970 1971 1972 1973 1974 1975 1970 1971 1972 1973 1974 1975 1973-75

…'_ ________loo000 h ------------------ ------------- '000 m. tons-------------- kg/ha

Volta 72.4 69.6 56.6 54.6 62.5 34.4 67.1 64.10 52.7 57.6 66.2 42.7 1081Eastern 84.2 78.1 66.1 59.7 44.6 61.6 88.4 82.3 70.3 62.6 34.6 64.0 951Central 40.9 41.7 38.4 38.8 46.2 27.9 51.8 53.9 48.2 48.7 57.4 36.6 1271Western 30.4 30.4 27.7 20.7 33.7 20.6 28.5 28.5 24.6 19.3 40.7 27.4 1156Ashanti 57.5 53.4 56.6 62.4 78.4 40.5 65.0 64.0 66.9 72.2 113.0 61.0 1368Brong Ahafo 73.7 66.8 56.2 58.4 61.8 39.7 102.6 93.5 68.4 79.4 102.9 54.9 1462 1/Northern 60.3 56.7 54.2 78.2 70.9 71.2 50.8 49.8 44.2 66.1 37.2 27.0 1583 1Upper 33.2 36.4 32.6 32.7 25.8 52.1 27.4 29.5 26.7 26.7 33.9 29.5 1102

Total 452.5 432.6 388.5 405.5 424.9 319.7 481.6 465.4 402.4 426.8 485.7 343.4 938

Indices: (1970 = 100)

Volta 100 97 78 75 87 48 100 96 78 77 98 64Eastern 100 92 78 70 53 73 100 96 79 71 39 72Central 100 103 95 96 105 69 100 104 91 94 111 71Western 100 100 90 67 110 70 100 100 86 68 142 96Ashanti 100 92 98 109 136 70 100 98 102 111 174 94Brong Ahafo 100 90 77 79 84 54 100 91 67 77 100 54Northern 100 94 90 129 117 119 100 98 87 130 73 53Upper 100 110 98 98 77 157 100 104 97 97 124 108

Total 100 96 86 90 94 71 100 97 84 89 101 71

1/ 1975 = 379 kg/ha


a' dF4 M

RICE PRODUCTION IN THE NORTHERN REGION

Area Improved Seed Distribution FertilizerPlanted Yields Production (sufficient Consumption

Y E A R (000 ha) (kg/ha) (000 m.t) (000 bags) for 000 ha) (000 m.t)

1968 11 928 10 3.3 3.4 1.9

1970 21 1114 23 3.1 3.2 1.9

1972 26 1276 32 8.3 8.5 7.0

1973 28 1392 38 17.2 17.7 9.5

1974 36 1682 59 25.6 25.2 13.5

1975 18.0

1976 27.1


>q

DEVELOPMENT OF AREAS UNDER COTTON BY REGIONS

R E G I O N SY E A RRE ION

Upper Northern Br. Ahafo Ashanti Volta Eastern Central Total

1968/69 12 18 _ _ 30

69/70 51 260 - 52 - 363

70/71 327 338 111 117 73 - 966

71/72 687 605 213 314 89 - _ 1908

72/73 1253 1209 408 597 163 17 _ 3647

73/74 1320 1110 684 568 278 250 35 4245

74/75 1397 1291 672 461 172 360 50 4403

75/76 3167 3510 2887 2006 752 389 206 12917

76/77 6046 9405 3941 2280 859 624 286 23441

Source: Cotton Development Board

It

PRODUCTION, YIELD, AND PRICES OF TOBACCO PRODUCTIONIN GHANA 1/

PRODUCTION YIELDS PRODUCER PRICES

Y E A R Flue Air Fire Total Flue Fire Dark Air Fire Dark Fire Fire

m.tons kg/ha p/kg

1953 3 - _ 3

60 251 584 - 840

65 286 565 42 893

70 440 355 141 936 561 697 651 86 46 71

71 538 514 379 1431 582 865 671 95 49 75

72 926 333 480 1739 737 703 786 115 55 82

73 1363 579 654 2596 862 1001 823 123 57 93

74 2052 620 651 3323 868 893 859 121 53 97

75 1552 196 594 2342 778 981 558 170 71 130

76 1418 147 487 2052 691 763 691 168 84 134

77 ) 2123 522 861 3530 209 110 161

78 ) Targets 2300 300 1000 3630

79 ) 2500 410 1100 4010

1/ Of Ghana Tobacco Company only.

Source: Ghana Tobacco Company Ltd. H>

o 3

oCD

REQUIRED PRODUCTION INCREASES TO MEET DEMAND FORFOOD AND FODDER CROPS IN 1985

Production 1/ Demand - 1985 Required Growth Rates oF1973/75 Low High Production to meet demand

1985.Low High

___________________________ Lo nnHigh- ________________

…'-- - -- - - - -- - - -000 tons…-- - - - - - - - - - - - - -

Maize 418 650 751 3.7 4.9

Sorghum / Millet 287 293 313 0.2 0.8

Paddy 68 168 171 7.8 8.0

Starchy Staples 6794 6174 6394 negative negativeof which - Cassava 2956 2288 2347 ii

- Plantain 1780 1563 1615 it *

Grain Legumes 139 183 186 2.3 2.4

1/ Average of 3 years.

IWIm H4

EXTENSION DENSITY IN THE REGIONS 1/

Regions 1, TotalGr.Accra Volta Eastern Central Western Ashanti- brong Ahafo Northern Upper Regions

1. Extension Staff:

Technical Officers 122 69 117 133 44 69 130 175 194 1053Field Assistants J27 51 (110) 107 (842) 96 (143) 48 (153) 16 (321) 72 (100) 32 98 2216

Total Extension Staff 149 230 1066 372 245 406 302 207 292 3Y67No. of Holdings (000) 108.6 148.2 81.1 68.1 147.7 71.6 61.2 118.7 805.2Staff Ratio (Holdings per Staff) 472 139 218 278 364 237 296 406 246

I}. Supervisory Staff:

Professional Officers 27 28 (1) 21 (1) 48 (1) 21 (1) 26 (1) 25 (1) 35 27 264Senior Technician Officers 25 32 (11) 57 (105) 43 (15) 20 (26) 15 (37) 28 (17) 27 29 487

Total Supervisory Staff 52 72 184 107 68 79 71 62 56 751Extension Staff per Supervisor 3 2 6 3 4 5 4 3 5 4

.' ( ) Cocos extension staff.2/ Total without Planning Division and Fisheries Department.

Source: Ministry of Agriculture and Ministry of Cocoa Affairs

rI3A~~~~~~~~~~~~~~~~~~~~~~~~~~~

FERTILIZER CONSUMPTION IN THE REGIONS

R4gionsType Year Volta Eastern Central Western Ashanti Br. Ahafo Northern Upper Gr.Accra Total

- - - - - - - - - - - - - - - - metric tons - - - - - - - - - - - -e - - - - - -

SA 1973 170 180 350 85 460 70 2845 850 495 5505

1974 175 85 750 15 870 125 3235 750 825 6830

1975 250 15 65 10 80 110 2680 735 20 3965

1976 905 3342 565 36 564 1687 6820 2752 489 17160

15.15.15 1973 225 650 380 250 840 280 3950 , 1020 1500 9095

1974 450 900 350 105 1090 220 5630 2115 560 11420

1975 1200 90 595 355 770 55 9905 2435 900 16305

1976 2615 1818 373 298 546 1385 14772 4459 1933 28199

20.20.0 1973 95 170 115 20 180 175 - - 300 1055

1974 120 330 150 - 250 85 1185 350 150 2620

1975 - - 5 - 75 - 890 20 - 990

1976 922 894 365 32 628 1585 3296 3615 365 11702

Other 1973 5 100 90 - 2020 - 380 650 105 3350

1974 10 10 10 - 510 20 205 1030 175 1970

1975 - 5 - - - 10 - 1570 15 1600

1976 - - - - - - 582 - - 582

Total 1973 495 1100 935 355 3500 525 7i75 2520 2400 19005

1974 755 1325 1260 120 2720 450 10255 4245 1710 22840

1975 1450 110 665 365 925 175 13475 4760 935 22860

1976 4442 6054 1303 366 1738 4657 25470 10826 2787 57643

% of Fert. Cons. 8 10 3 0 3 8 44 18 6 100

Area under annual crops S 52 82 34 36 57 74 260 375 - 970

Ma in 1975)% of area fertilized 5 8 3 4 6 8 27 39 - 100

I/ Cereals, grain, legumes, vetegetables, industrial crops.

(DZtj W

DEGREE OF FERTILIZER APPLICATION IN GHANA

Regions

Unit Volta Eastern Central Western Ashanti Br-Ahafo Northern Upper Gr.Accra Total

FertilizerConsumption 000 tons 4442 6054 1302 366 1738 4657 25470 10826 2787 576431976

1/Area under Crops

warrantingfertilizer 000 ha 53 85 36 36 57 70 173 117 6271975

2/TheoreticalFertilizer 000 tons 13250 21250 9000 9000 14250 17500 43250 29250 156750Consumption

Actual as Percentof Theoretical 33 28 14 4 12 27 59 37 37Requirements

1/ Maize, Rice, Sugarcane, Vegetables, Cotton, Pineapple

2/ .250 ton/ha assumed

'3

lb>I-. h4

RESULTS OF FARM BUDGET PER HECTARE

(a) MAIZE

Unit Hand Cultivation Ox CultivationNorth Ghana South Ghana North Ghana

Trad. Impr. Adv. Trad. Impr. Adv. Trad. Impr. Adv.A. PHYSICAL ASSUMPTIONS

Yield Kg/Ha 750 1200 2000 750 2000 3000 2000

Inputs:

Seed " 15 20 25 15 20 25 25Fertilizer: N 75 150 100 200 150

p 75 150 100 250 150

CompoundChemicals L/HaLabor Man Day/Ha 75 90 170 55 95 115 73

B. RESULTS

(i) Financial Subsidized)

Net Income/Ha 90 131 209 90 229 329 201Net Income/Man Day 1.2 1.45 1.89 1.62 2.41 2.86 2.75

(ii) Financial (unsubsidized)


(iii) Economic ($=01.73)


(iv) Economic (US$=¢3.00)


0

(b) COTTON

Unit Hand Cultivation Ox CultivationNorth Ghana South Ghana North Ghana

Trad. Impr. Adv. Trad. Impr. Adv. Trad. Impr. Adv.

A. PHYSICAL ASSUMPTlONS

Yield Kg/Ha 300 700 1000 300 800 1200 1000

Inputs:

Seed " 30 45 45 15 25 30 45Fertilizer: N it 100 150 100 200 150

P f 50 150 150Compound " 200 200

Chemicals ¢/Ha 15 15Labor Man Day/Ha 100 135 150 50 115 140 113

B. RESULTS

(i) Financial (subsidized)




(iii) Economic ($=$1.73)




171

cr. I-

APPENDIXTable 15c

tc) SORGHUM

Unit Hand CultivationNorth Ghana South Ghana

Trad. Impr. Adv. Trad. Impr. Adv.

A. PHYSICAL ASSUMPTIONS

Yield Kg/Ha 750 1600 500 1500 2500

Inputs:

Seed it8 8 5 8 10Fertilizer: N " 100 100 225

P " 100 100Compound t' 200

Chemicals ¢/Ha

Labor Man Day/Ha 80 100 45 85 105

B. RESULTS

Ci) Financial (subsidized)

Net Income/Ha 73 139 50 127 226Net Income/Man Day 0.9 1.39 1.10 1.49 2.13



(iii) Economic ($=¢1.73)




APPENDIXTable 15d

(d) GROUNDNUT




Yield (shelled) Kg/Ha 450 600 900 400 700 1000

Inputs:

Seed " 50 65 90 50 65 90

Fertilizer: NP " 75 150 100 '150

Compound " 250 100 100

Dressing " 0.25

Labor Man Days/Ha 90 105 125 90 105 125

B. RESULTS


Net Income/Ha 147 189 280 128 207 .301

Net Income/Man Day 1.63 1.79 2.24 1.41 1.98 2.42


Net Income/Ha 157 177 257 128 177 261


(iii) Economic ($=01.73)

Net Income/Ha 224 274 400 196 276 405


(iv) Economic (US$=03.00)

Net Income/Ha 456 474 693 337 478 703


APPENDIXTable 15e

(e) COWPEAS




Yield Kg/Ha 200 900

Inputs:

Seed 15 25Fertilizer: N

P I, 50Compound

Chemicals L/Ha 7Labor Man Days/Ha 45 75

B. RESULTS


Net Income/Ha 59 241Net Income/Man Day 1.3 2.53



(iii) Ecoftomic ($=01.73)



Net Income/Ha . 51 111Net Income/Man Day 1,14 3.7

APPENDIXTable 15f

(f) RICE




Yield Kg/Ha 900 1400 2200 750 1500 2500

Inputs:

Seed 70 80 90 30 50 70Fertilizer: N 75 150

P 75 150Compound 150 300

Chemicals ¢/Ha - - 2Labor Man Days/Ha 105 120 140 80 120 150

B. RESULTS

(M) Financial (subsidized)

Net Income/Ha 95 135 208 164 312 518Net Income/Man Day 0.9 1.12 1.48 2.05 2.60 3.45





(iv) Economic (US$=03.00)


APPENDIXTable 15g

(g) TOMATOES




Yield Kg/Ha 7500 150000 10000 15000

Inputs:

Seed Grams 50 25 500 250Fertilizer: N " 50 250 500 1000

p " 200 500Compound " 50 150

Chemicals ¢/Ha 115Labor Man Day/Ha 400 560 400 550

B. RESULTS

Mi) Financial (subsidized)

Net Income/Ha 3686 7309 2850 4238Net Income/Man Day 9.21 13.05 7.12 7.70



(fli) Economic (0=01.73)




APPENDIXTable 15h

(h) CASSAVA




Yield Kg/Ha 5000 10000 15000

Inputs:

SeedFertilizer: N

P ..

Compound 200 400

Chemicals ¢/HaLabor Man Day/Ha 85 120 140

B. RESULTS


Net Income/Ha 230 434 638Net Income/Man Day 2.7 3.6 4.5







APPENDIXTable 15i

(1) YAM


Trad. Impr. Adv. Trad. Impr. Advo

PHYSICAL ASSUMPTIONS

Yield Kg/Ha 4000 5500 9000

Inputs:

Seed " 2000 2500 4000Fertilizer: N " 100 250

pCompound

Chemicals Kg/Ha 25Labor Man Day/Ha 155 180 215

RESULTS









IBRD 13229

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Semi -Deciduous Forest

hin snap han bets ProPored by tt Transitional Zone

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ANNEX IIPage 1

COCOA SECTOR

Introduction

1. Cocoa covers some 1.2-1.8 million ha and accounts for one-third oftotal cultivated land area in Ghana. About one quarter of the total popula-tion or 2.5 million people are directly involved in cocoa farming. Cocoaaccounted for 62 percent of foreign exchange earnings on average between1971-73 and provided about 33 percent of Government current revenues. However,as described below, the cocoa sector is presently in a decline. This situationwill seriously restrict economic development through stagnant or fallingforeign exchange earnings and fiscal revenues. Such a prospect is bleaksince GDP has already failed to keep pace with population growth in thelast decade. While there is an evident need to diversify the economy, andGovernment is pursuing this course, government experience and farmer expertisein cocoa production is not being fully exploited and the cocoa sector isunable to make the much larger contribution to the economy that its potentialpermits. Consequently, there is a clear and urgent need to resuscitateand maintain the cocoa sector.

Production Trends

2. Since the 1910/11 crop year Ghana has been the world's largest pro-ducer of cocoa beans. Average output remained stagnant during the late '40sand '50s and increased dramatically during the '60s as a result of extensiveplanting in the early '50's. Since 1972/73 production has declined markedly,partly as a result of unfavorable climatic conditions, and also as a resultof poor management of the sector. Ghana is now expected to lose its posi-tion as the No. I world cocoa producer by 1985, with possibly both IvoryCoast and Brazil overhauling it. Production trends and Ghana's productionas a proportion of world production are as follows:-

Table 1: COCOA PRODUCTION TREND

tons % of World Production

1947/48 - 1959/60 242,000 31%

1960/61 - 1969/70 420,000 33%

1970/71 - 1972/73 433,000 28%

1971/72 - 1973/74 409,000 28%

1972/73 1974/75 378,000 26%1973/74 1975/76 370,000 25%1974/75 1976/77 363,000 25%

Source: Cocoa Statistics. Gill & Duffus Group Ltd. December 1976.

Latest ICCO projections 1/ for 1980 are 367,000 tons for Ghana, 342,000 forBrazil and 304,000 to Ivory Coast, but no details are yet available. A com-parison of the growth rate in production 1959/63 - 1969/71 shows Ghana'srelatively poor performance:-

1/ I.C.C.O. Survey of Recent and Projected Development in World CocoaEconomy. Doc. Ex/17/3 February 23, 1977.

ANNEX IIPage 2

Ghana - 1.4 %

Brazil + 5.6 %Ivory Coast + 7.8 %Nigeria + 3.0 %

The marketed production trend during the '70s has been an annual decline ofsome 12,000 tons, which, at present prices, is translated into a loss of anadditional US$36 million each year of decline.

3. While some work of a sophisticated nature has been carried out onestimating production cycles for Ghana's cocoa, its results are questionable.ICCO's earlier projections for Ghana 1/ were 430,000 long tons by 1980, withan additional 50,000 tons by 1985 to reflect reduced smuggling, a more in-tensive harvesting effort, and improved maintenance. Such optimistic esti-mates of a reversal of the '70's trend belie the present situation of:

i) cocoa farmers' lack of confidence due to low producerprices and inadequate supplies of inputs;

ii) the relative unattractiveness of cocoa in comparison withalternative crops;

iii) the inadequacy of the spraying program in the face ofmajor losses due to capsids; and

iv) the inadequancy of seedling supplies required to replantdying cocoa.

Careful analysis of the ICCO's assumptions suggest that their estimates areoptimistic.

4. Establishing a base from which to project future production is criti-cal and is very difficult when very little is known and recorded about Ghana'scocoa sector. ICCO's model, with base year 1970/71, projects 410,000 tonsfor 1974-1975 which is somewhat higher than actual (about 370,000 recordedplus an estimated 20,000 smuggled). The age distribution of cocoa treestallies with ISSER information on an old cocoa growing area-- Ashanti --where they reported that some 30 percent of the producing trees were plantedbefore 1935. This should be higher for the older areas and lower for the"frontier" areas of Brong Ahafo and the Western Region. However, ICCO took noaccount of quality distribution within age groups. Provisional data of theCocoa Production Division (CPD) on Ashanti suggest the following qualitydistribution by age group:

1/ I.C.C.0. Study of Cocoa Production and Consumption Capacity, August 19,1975.

ANNEX IIPage 3

Table 2: ASHANTI REGION: DISTRIBUTION OF COCOA TREESBY AGE GROUP AND QUALITY

ASHANTI

Years Age --- Quality Spread ----------Distribution Good Fair Poor Dying

0-7 7% 70% 25% 5% -8-15 14% 67% 27% 6% 1%16-30 55% 64% 28% 7% 1%31-60 24% 56% 35% 6% 2%60- 7%

Total 100% 63% 29% 6% 1%

Source: Ministry of Cocoa Affairs.

ICCO estimate yields of 400 kg/ha for the 16-30 age group, which, given thequality distribution and an assumed yield level of 56 kg/ha for poor cocoa and170 kg/ha for fair cocoa, implies a yield level of 550 kg/ha for 64 percent ofthe cocoa in this age group, i.e. for one-third of all the producing cocoatrees in Ghana. This would appear excessive. It is more likely that averageyields levels are lower and that ICCO have under-estimated the area of cocoa(1.3 million hectares in 1969/1970). In Ghana figures of up to 1.8 millionhectares of cocoa are referred to. FAO's earlier projections were in the orderof 2 million hectares. The base for ICCO's projection should thereforeperhaps be a larger area (about 1.6 million hectares) and lower yield levels.If yield levels are lower than assumed it could imply that there is a signi-ficant amount of poor cocoa, though it is interesting to note from the CPDAshanti data that quality does not vary significantly between age classes.Average age of a cocoa tree from CPD data is 30 years (ICCO assumes 29 years).

5. The assumptions ICCO have made to project forward from 1970/1971,are:

(i) planting by farmers at the rate of 20,000 ha/annum 1970/71-1974/75, sufficient to roughly offset abandonment of oldfarms;

(ii) planting by farmers at the rate of 24,000 ha/annum 1975/76-1979/1980;

(iii) considerable part of plantings 1970/71 - 1974/75 by farmersof high-yielding hybrids;

(iv) all planting of traditional material replaced by hybrids by1979/80;

(v) no difference between yields from hybrids planted by farmersin and outside of IBRD projects; and

ANNEX IIPage 4

(vi) continuation of pest and disease control programs withoutmajor changes.

Only assumption (vi) seems reasonable.

6. According to the records of CPD, the only supplier of hybrid seeds,hybrid seed available to farmers outside the Bank projects was only sufficientto plant 4,000 ha per annum between 1970/71 and 1974/75, plus another 4,000ha per annum of the amazon variety. This is well short of the 20,000 haassumed, though farmers have unlimited access to supplies of the traditionalvarieties that are not supplied by CPD. Seed garden supply is inadequateand best estimates are that even under present plans for expansion of seedgardens, the supply of hybrids will only be sufficient to allow farmersoutside the Bank projects to plant some 65,000 ha between 1975/76 and 1979/80--half of that estimated by ICCO - taking into account the swollen shoot removalprogram (running at 2,000 ha/annum). From 1979/80 on, seed gardens shouldprovide sufficient hybrids to allow farmers to plant 18,000 ha/annum.

7. It is furthermore unrealistic to have similar yield assumptionsfor farmers under intensive project assisted extension and for those notunder supervised programs. In sum, ICCO's projections of a turn around of thetrend in marketed cocoa production over the last seven years look very opti-mistic under existing circumstances. A more realistic assumption is a con-tinuation of the present trend of approximately a 3 percent decline per year.If the situation continues this would result in a level of 320,000 tons/annum1979/80 - 1981/82 and 275,000 tons/annum 1984/85 - 1986/87.

8. During 1976 international prices for cocoa have skyrocketed, reach-ing well over $2 per lb. on the New York spot market, which has compensatedfor present low levels of production (expected 330,000 tons for 1976/1977).However, in the medium term prices are expected to fall and Ghana will ifthe present trend continues, receive a diminishing share of a falling market.Implications for balance of payments and budget deficits are not hard toforesee.

9. However, the potential of the cocoa sector is far from beingrealized. In the absence of relevant historical data it is difficult to pre-dict the effect of a reorganization of extension, timely supply of inputsand an attractive producer price. Estimates are that some 20 percent of thecrop may be lost to capsids. With a proper spraying program perhaps 40,000tons would be saved per year. An estimated 25 percent of the potential cropremains unharvested because of farmers' lack of interest and poor returns toharvesting at the margin. A competitive producer price might induce a mar-keted increase of 50,000 tons. Smuggled cocoa is estimated to be in the orderof 20 - 30,000 tons/year but with a continuing differential between theofficial and the black market value of the cedi it is doubtful whether thiscould be reduced much below 15 - 20,000 tons. Finally, and more importantlyfor Ghana's medium and long term future, a revamped extension service, ade-quate supply of inputs, and an attractive producer price should induce amajor replanting effort. With a cocoa hecterage of 1.6 million ha this couldmean that in the order of 50,000 ha should be replanted each year.

ANNEX IIPage 5

Organization

10. In an attempt to give the cocoa sector greater emphasis, the Govern-ment created the Ministry of Cocoa Affairs (MCA) in February 1975, for thefirst time bringing all agencies responsible for cocoa - Cocoa Marketing Board(CMB) and Cocoa Research Institute (CRIG) - under one umbrella. With a suc-cession of commissioners and without the necessary political power to tackleand control the CMB which operates virtually as a government within a Govern-ment, MCA's impact has been insignificant. Plans for a reorganization havebeen approved but implemented only in part. CPD has simply been transferredfrom CMB to MCA but without being restructured. The IBRD appraisal mission in1975 for the Ashanti Cocoa Project identified the following organizationalproblems:-

1) total lack of any co-ordinating and planning function within MCA.

2) the need for a separate seed gardens unit under proper manage-ment, headed by a senior officer.

3) the need to remove all responsibility of input procurementand subsidy payment from CMB.

11. No steps to deal with these problems have been taken. Government'sneed to carefully monitor the operations of CMB has become even more criticalsince it has recently begun a large capital expenditure program in a periodof overall austerity, CMB publishes no budget and it is unclear whether itsubmits one to MCA or the Ministry of Finance. The last published accountsrelate to 1974. It is reported to have considerable access to credit withthe Bank of Ghana and to have run a deficit of ¢30 million in 1975/76. Itsmandate authorizes it to finance a variety of items including feeder road andschool development in the cocoa sector and scholarships for the entirecountry. It is presently engaged in establishing cocoa and coffee plantationsand has initiated a considerable office building program in the regions. Atpresent it is forced to run at a loss because the allowance, set by government,is too low to allow CMB a profit:-

Table 3: CMB COSTS PER TON OF COCOA 1/

Paid to farmer via LBA: 746.67Commission to LBA 74.00Transport 36.00Handling 2.00Administration 20.00Commission to CMC 14.00

892.67

1/ At a producer price of ¢20 per 60 lbs.

ANNEX IIPage 6

This allowance is set arbitrarily after negotiations. Prior to July 1976it was set at 0739 ton, less than CMB's direct costs. Since then it has beensc- at 1l1I9/ton allowing CMB a direct "profit" of ¢126/ton out of which ithas to meet subsidy payments, and make capital expenditures, etc. It is re-commended that CMB revert to a marketing and evacuation agency and abandonits peripheral activities; that its charter be reworded to reflect this;that its allowance be set to allow it to operate at a marginal profit; andthat it be required to run its affairs in a proper financial manner submitt-ing budgets for approval and having accounts audited and published withoutundue delay.

12. Despite the importance of the cocoa sector very little informedplanning is carried out. It is recommended that MOA establish a planningunit and that as a first step this unit takes responsibility for planning aninventory of the cocoa sector. CPD has been conducting a physical survey ofthe cocoa sector since 1972 which involves hand counting of all trees. Re-sults are not yet available and will be out of date when that count is fin-ished. Although they will still be useful, it is considered essential thata proper inventory be made of cocoa trees to provide a sound basis for plann-ing the sector. The planning unit's first function should be to assess thesituation, and design an adequate survey that can be carried out in a timelymanner. (The facility to hire consultants for this purpose was included inLoan 1181-GH but has yet to be used). This planning unit would also be re-sponsible for planning seed requirements and monitoring the teams measuringcapsid resistance to insecticides.

13. CPD has an approved staff compliment of 37228 of whom 96 percentare in post. It's functions are as follows:-

(i) disease control and rehabilitation, involving a survey ofevery tree for swollen shoot virus disease (SSVD) cuttingout infected trees and replanting and maintaining the newplanting for three years before handing over to the farmowner;

(ii) insect control: spraying farms replanted under i) andoperating workshops for sprayers;

(iii) block planting: assisting farmers who wish to plant inblocks, as a form of demonstration; CPD establishes thefarm and hand it over to the farmer after three years;

(iv) establishing seedling nurseries and distributing seed

free to farmers;

(v) lining and pegging, free of charge, for farmers who havecleared farms;

ANNEX IIPage 7

(vi) distributing inputs; this role is being phased out andbeing taken on by Regional Authorities in conjunction withCMB; and

(vii) general extension.

Staff are poorly trained, equipped and organized. At present no effectiveextension is carried out, with no division responsible for extension per se.

14. The principal role of CPD appears to be to directly engage in re-planting cocoa. Not only is this system of replanting cocoa inefficient, 1/but it induces a state of apathy in cocoa farmers, who prefer to await CPD'shelp rather than help themselves. CPD needs to be re-equipped and reor-ganized. Its involvement in actual replanting and maintenance should be re-duced to a minimum, and farmers should be offered sufficient inducement tocut out and replant their diseased cocoa themselves. CPD should concentrateon i) nurseries; and ii) extension, i.e. communication with farmers. Use ofthe new hybrids requires a much higher level of husbandry, with proper shadecontrol etc. At the same time CPD should be re-equipped. Management of themistblower vehicle workshops should be reviewed and the need for further ve-hicles assessed. At present Ashanti Region CPD, has one official landrover,two trucks and an antique 404 for its 5979 staff. The vehicle situation forCPD as a whole is reportedly as follows:

Table 4: VEHICLES AVAILABLE TO COCOA PRODUCTION DIVISION

LandBus Rovers 5 ton Truck 7 ton Truck 16 ton Truck Car Tractors

Serviceable 5 105 6 8 5 9 18Unserviceable 1 23 - 1 - - I

Total: 6 128 6 9 5 9 19

Distribution of Inputs

15. Until the 1976/77 season CPD was responsible for the timely distri-bution of insecticide and sprayers, which was carried out very ineffectively

1/ In the Ashanti Region, for example, 5921 field assistants and laborersare employed. Between 1970-1976 1223 ha of SSVD were cut out and re-planted, and 160 ha replanted under the block scheme, making 1380 haover 7 years or 197 ha/annum. Theoretically, a program of this sizerequires a labor input of 280 persons per annum, 5 percent of the staffactually employed.

ANNEX IIPage 8

despite adequate in-house vehicle capacity. 1/ Consequently this responsibil-ity has now been given to the National Distribution Committee which operatesthrough a series of Regional, District and Society Committees with involvementfrom the Regional Commissioners, farmers, LBA's and the CMB. In effect theCl-IB has become responsible for input distribution. In order to combat smuggl-ing and to cope with the shortages of supplies, a cumbersome system of con-trols has been introduced whereby farmers are permitted to buy sprayers andinsecticide on the basis of previous sales of cocoa. Such a system would beunnecessary if adequate supplies of inputs were made available at unsubsidizedprices.

16. The new distribution system has not yet been fully tested but it isvital that insecticide is delivered on time, prior to the appearance of theyoung vulnerable capsids in July. Insecticide delivered tardily is of littleuse. The new arrangements have two drawbacks that should be corrected. Inthe first place, CPD, while responsible for extension, are not kept informedas to timing, qualities, location and type of inputs being made available.This hampers CPD's effectiveness. Secondly, sprayer repair shops and train-ing programs for use of sprayers are operated by CPD. Therefore, there hasto be proper linkage between procurement and distribution of sprayers andCPD's operations.

Evacuation

17. CMB is responsible for ensuring the timely evacuation of cocoa andfor produce inspection. Previously evacuation was carried out by LBA's usingprivate haulage contractors and the railways. Poor maintenance on the railwayand lack of spare parts has led to a deterioration of the railways' carryingcapacity. Equally, lack of maintenance of feeder roads and highways has in-creased the costs of transporting cocoa from the bush to rail heads. Further-more, a severe restriction on the importation of trucks and spare parts forthe private sector, coupled with the thriving haulage trade between Ghana andNigeria, and within Nigeria, appears to have led to a critical shortage oftransport for Ghana's interior. Government's reaction has been to allow CMBto establish a major haulage unit, now comprising 200 7-ton trucks and 70articulated trucks strong, with plans to import a further 300 7-tonners; 130articulated trucks and 100 tractors. Approximated costs of the fleet would bein the order of 023 million. Rates at which LBAs are reimbursed for usingprivate contractors are above economic costs but below market prices. Thisfurther discourages the use of the private sector. Indeed, if CMB plans arecarried through it should have the capacity to move about 600,000 tons toports itself viz:

1/ 7 ton truck working 200 days/year makes 500 round trips carrying 700gals/trip. 8 trucks carry total of 350,000 gals/yr. 16 ton truckworking 200 days/year makes 300 round trips carrying 1400 gal/trip.5 trucks carry total of 420,000 gals/yr. Total carrying capacity =

770,000 gals/year.

ANNEX IIPage 9

Table 5: CARRYING CAPACITY OF CMB TRUCK FLEET

Vehicle No Load/Trip Working Days/Year Days/Trip Total

7 ton truck 500 5 tons 220 3 183,000 tonsArticulated 200 37.5 tons 220 4 412,000 tons

Total: 595,000 tons

Seasonal peaks in demand for transport could be offset by rail capacity,currently moving about 30 percent of the cocoa crop. CMB's involvement inhaulage should be halted and the private haulage sector encouraged by allowingimports of spare parts and additional capacity, and by improving road main-tenance to reduce vehicle operation costs.

Plantations

18. CMB has initiated plans to develop 16,000 ha of cocoa plantations and10,000 ha of coffee plantations. 800 ha of cocoa will be established in thefirst year. Work began in 1976 and 2000 permanent laborers have been hired.Rational for this development is three fold - first, to try to overcome thehired labor constraint experienced by cocoa farmers; secondly, to attract andtrain school leavers into the cocoa sector by emphasizing the commercial as-pects of cocoa production, and thirdly, as a publicity effort, to demonstratethat CMB are attempting to increase production in Ghana, an assurance givenconsumers in the Cocoa Alliance.

19. No feasibility studies were prepared before site clearing began.Plantations sites were located only where villages were prepared to makeland available, and in one instance a partially cleared site had to be aban-doned because of poor soil conditions. West Africa has no experience withcocoa plantations, and there is no reason to expect Ghana, with its history ofState Farms, to have any better success in large scale cocoa enterprises thenit did in other large scale concerns. Managerial capacity is poor and thereare no returns to scale in cocoa production. Only in Brazil do cocoa planta-tions flourish where large commercial companies have invested in cocoa pro-duction. There, labor shifts are marked by sirens and wages are docked fortardiness and lack of discipline. Such a system would be unacceptable inGhanaian conditions. The plantation program should be stopped and attentiongiven to once again creating a favorable environment for the private cocoafarmer.

Input Supply

20. Seeds. The ten seed gardens producing hybrids suffered from severemismanagement during the 1960s when the Cocoa Production Division was abolishedand the gardens transferred to the State Farms Corporation. Since 1970 theyhave been managed by the CPD and total production of hybrid pods has increasedfrom 793,000 in 1973 to 1,646,000 in 1976. Details are at Table 2 in theAppendix. However this is sufficient to plant only some 20,000 hectares/yeartaking into account replacements needed for preceding years. The two BankGroup financed projects alone will require 37 percent of available hybridproduction in 1977, and 47 percent in 1978, as follows:-

ANNEX IIPage 10

Table 6: SEEDPOD REQUIREMENTS OF BANK-FINANCED PROJECTS

Planting Program (ha) 1/1977 197_

Suhum Cocoa Project 4200 2400Ashanti Region Cocoa Project 6400 11000

Total area 10600 13400

Total No. of Pods required: 2/('000) 615 777

1/ Includes 30 percent replanting in year 2, 15 percent replanting inyear 3.

2/ Assuming 35 beans/pod, 20 percent mortality rate in nursery. 1 hectarerequires 58 pods.

The cut and plant program run by CPD against swollen shoot disease replantssome 2000 ha/year, which together with replacements for the previous year'splantings, requires 168,000 pods per annum. This will leave private farmerssufficient hybrids to plant some 10,000 ha in 1977 and about 8300 ha in 1978,clearly insufficient to maintain Ghana's cocoa production assuming that in theregion of 50,000 ha of cocoa need to be replanted each year.3 /

21. There is a clear need to increase production of hybrids so long asthe replanting program continues to be based on hybrids. Management of thegardens is poor and belated efforts are only now being made to properly assesspod needs and plan garden extensions. This is largely a result of an organiza-tional set-up in which the seed gardens are run as part of the regional opera-tions of CPD and not as a separate entity. Regional operations are too big,badly equipped and poorly staffed, and the management of the seed gardens re-ceives little attention. From a total production area of 130 ha, yields in1975 were only 400 kg/ha. An extension program did begin in 1976, existinggardens have been extended by 40 ha, and thirteen new seed gardens establishedcovering 50 ha. However there are serious doubts on the quality and manage-ment of some of the new gardens. One garden planted in 1970 and visited in1976 by a Bank supervision mission still had a 25 percent seedling mortalityrate. Government's estimates of future production vary from 2.8 million podsto 3.9 million in 1978, increasing to 4.1 million in 1980, sufficient toreplant the required 50,000 ha. However, the basis for these increases isimproved maintenance with yields of about 1100 kg/ha, which are not realisticin the present circumstances.

22. Average and timely seed supplies are the basic essential for aserious attempt to revamp the cocoa sector in Ghana. At present it is clearthat adequate hybrid seeds do not exist to satisfy farmer demand. The needto place the management and planting of the seed garden on a proper footingwas recognized by the Government, and as a covenant to the Loan Agreement for

3/ Pod production is said to have increased to over 2.5 million in 1977,which would provide for a much larger planting program.

ANNEX IIPage 11

the Ashanti Region Cocoa Project, it was agreed that a separate seed gardenunit would be established with a senior officer in charge and that an annualreview by an independent consultant would be made. Foreign exchange costs ofestablishing seed gardens is minimal, only one full time senior staff isrequired, and the necessary technical skills already exist in Ghana.

23. Sprayers. Motorized and hand sprayers for spraying insecticideagainst capsids - the single most serious yield reducing factor in Ghana -have been imported in widely fluctuating numbers as follows:-

Table 7: IMPORTS OF SPRAYERS

Type 1959-1964 1965 1966 1967 1968 1969 1970

Motorized 96,188 11840 35 576 1949 2293 3136Hand 40881 8747 32 569 1410 2232 2665

1971 1972 1973 1974 - Jul.1975 2/ 1976 1977 3/

Motorized 2789 11 4273 984 7,500 21000 25000Hand 1040 5035 3859 769 0 0

TOTAL 1965 - 1975

Motorized 25471 1/Hand 18530

1/ Assuming only 50% of those imported 1965 - 1970 in working order.2/ Estimated on the basis of C200/sprayer, import license of ¢1.5 million.3/ Reportedly ordered.

Motorized sprayers have now completely replaced hand sprayers which are nolonger being imported. It is estimated that in 1975 there could have beenabout 25,000 motorized sprayers in working order in Ghana, assuming the un-likely situation that none were illegally exported. This would be adequateto spray some 50,000 ha or not more than 3 percent of the cocoa area, atotally inadequate coverage. Sprayer requirements are based on a ratio of onesprayer per two hectares, but depending on hire and share arrangement it isconceivable this was sufficient capacity to spray up to say 10 percent of thecocoa area. Beginning in 1975 there has been an apparent change - of - heartand imports of sprayers have increased rapidly and when present orders aredelivered there should be about 71,000 sprayers, adequate to spray about140,000 ha a year or 9 percent of the cocoa area. However with sprayer pricesover 80 percent subsidized the temptation to smuggle them across national

ANNEX IIPage 12

boundaries is very considerable. Ghanaian sprayers, selling at the fixedprice of ¢30 in Ghana, fetch ¢700 in Ivory Coast, and there is reasonable

evidence that considerable smuggling has taken place, given this profit markup and the low price of cocoa in Ghana.

24. There is a clear need to increase the spraying capacity in Ghana.To determine requirements, sample surveys should be carried out to determinethe number of servicable machines now in Ghana, the spare parts required torestore repairable machines (no spares have been imported for the past fouryears) and the nature and extent of the private hire market and sharingarrangements. Reasons why imports of both sprayers and insecticide have beeninadequate are (i) poor planning, (ii) Government's concern that at subsidizedprices sprayers will be exported illegally, (iii) because the subsidy has beenborne by the CMB it has attempted to reduce imports to reduce the subsidy bill(iv) the foreign exchange constraint, since all machines are imported made-upand the foreign exchange element of insecticide is very high, (v) the arrange-ments for determing orders which is done on the technical recommendation ofCPD but with final authority resting with CMB.

25. Insecticide. Provision of insecticide, is equally haphazard andunplanned as that of sprayers. Total sales have varied since 1970 as follows:

1970 1971 1972 1973 1974 1975 1976

Insecticide'000 gals.: 290 90 120 250 160 200 500

Variation within regions is larger (see Appendix table 3) undermining farmers'confidence in Government's ability to consistently make adequate amountsof insecticide available on a timely basis. Between 1970-1975 sufficientinsecticide has been made available to spray 150,000 ha or 9 percent of thecocoa area per annum. As with sprayers, insecticide is highly subsidized -over 85 percent - and considerable quantitites are thought to be exportedillegally to Ivory Coast and Togo.

26. Capsid damage is reported to reduce the cocoa crop by about 20 per-cent and protection of the crop is of critical importance. Beginning in 1976Government has significantly stepped up its efforts to make more insecticideavailable. At the same time it has finally, after some ten years, takeninto account CRIG's findings that capsids in many areas have become resistantto Gammalin 20,. the only insecticide made available up to 1976. Consequentlyin 1976 four types of insecticide were introduced - Undane (300,000 gals),Bux 2E (100,000 gals), Elocron (10,000 gals) and Gammalin 20 (100,000 gals).This should have been sufficient to spray 500,000 ha or 30 percent of thecocoa area. Gammalin 20 is to be phased out entirely and Bux 2E has hadside effects (vomiting etc.) and will not be used in future. Undane andElocron are about twice as expensive per hectare as Gammalin.

ANNEX IIPage 13

Table 8: SPRAYING COSTS

Gammalin 20 Undane

Rate per spray per ha 10 oz. 7.4 oz.No. of sprays per ha per annum 4 4Costs per gallon ¢14.62 038.50Costs per hectare 018.06 ¢35.57

The change from Gammalin to the new insecticides will prove expensive. TemaChemicals' (formerly I.C.I.) factory at Tema, which previously formulatedGammalin, will convert to Elocron, and C.M.B. are establishing a formulationplant for Undane at Kumasi on license with Bayer. The combined capacity ofthese plants is thought to be between 800,000 and 1,200,000 gals per year.

27. Levels of insecticide use are still inadequate to satisfy farmers'demand and should continue to be increased, probably at least to 1 milliongallons. Actual requirements depend on (i) incidence of capsids, which canonly be assessed through sample surveys. The need to spray surrounding areasand cover trees should be born in mind since capsids lodge in other hoststhan cocoa, and (ii) the spraying regime. Present recommendations are astandard four applications per year. This is probably more than required.Capsid populations build up in July/August when the full adults appear fromlarvae, and drop off in September. If capsids are sprayed in July/Augustwhen still young and less resistant to insecticide, and four weeks later inSeptember, this may be sufficient. The danger inherent in a poor sprayingcoverage is the development of strains of capsid resistant to the insecti-cide. The situation calls for intelligent monitoring. In certain areasgammalin resistant capsids have not yet developed and gammalin, the signi-ficantly cheaper insecticide, could continue to be used. In other areasproper use of carbonates should kill off gammalin resistant capsids and itmay, in a few years, be possible to revert back to gammalin or other cheaperinsecticides. At present CPD has four teams of ten men each who measurecapsid resistance to gammalin throughout the year. In view of the criticalrole these teams play and the potential cost savings through good monitoring,the control of this unit should be vested in CRIG which has the technicalcapacity to supervise the work, especially as it expands into screening re-sistance to the new insecticides. At the same time the need to increase thenumber of teams should be critically reviewed.

28. Prices of all insecticides should be uniform on a per hectarebasis so that misinformed farmers are not attracted to insecticides un-suitable for their location. It is recommended that all prices are peggedto the more expensive insecticide.

ANNEX IIPage 14

Budgetary Implications

29. The likely effect on Government's budgetary position of increasing.._ producer price sufficiently (to upwards of ¢50 per load) to induce aspontaneous replanting program and to encourage proper maintenance and har-vesting, while at the same increasing supplies of inputs and removing sub-sidies, is shown in Appendix Table 4 and summarized below:-

Table 9: BUDGETARY IMPLICATIONS OF AN INCREASEIN THE COCOA PRODUCER PRICE(in millions of 1977 cedis)

Year Producer Price Production 1/ Net Revenue('000 tons) US$ = ¢1.15 US$ = 01.73 US$ = 03.00

1977 ¢30 360 900 1,536 2,948045 450 995 1,829 3,677

1980 ¢30 320 135 365 875045 450 127 527 1,413

1985 030 275 -27 93 357045 450 -211 20 531

Source: Appendix Table 4.I/ 50,000 tons of this is used by domestic processing plants.

International Cocoa prices are projected to decline through to 1985. Ifno changes are made production is expected to decline from 360,000 tons in1976/77, to 320,000 tons in 1980/81 and 275,000 tons in 1985/86 (see para 7).In constant 1977 prices this would mean net revenue from cocoa would be wipedout completely (from 0900 m. in 1977 to 027 m. in 1985). A full change inpolicy could result in a sustainable increase of 90,000 tons from presentlevels. The table also shows the implications of using different externalvalues for the cedi when converting the foreign exchange costs and benefitsof producing and selling cocoa.

Recommendations

30. It is recommended that Government take the following majoractions:-

(i) Establish a planning unit in MCA to plan seed gardenproduction, review the status of the Cocoa Sectorinventory, undertake necessary studies on availabil-ity of inputs and monitor teams measuring capsidinsecticide resistance.

ANNEX IIPage 15

(ii) Put CMB on a sound financial footing and limit itsrole to marketing and evacuation.

(iii) Increase the producer price to ¢50 cedis per 30 kg,remove all subsidies on inputs, and increase suppliesof sprayers (by 400,000 over two years) and insecti-cide (to 1.3 million gals. per year in steps of300,000 gallons/year).

(iv) Restructure and reorient the work program of CPD.

(v) Put the seed gardens under sound management.

31. The Bank Group's role should be to support these activities, par-ticularly through two channels:-

(i) regional development programs that involve a reor-ganization and re-equipping of CPD. This wouldinvolve a staff training program and improvedstaffing, and

(ii) setting up a revolving foreign exchange fund forthe supply of insecticide and sprayers.

32. It is clear that the Bank's policy of setting up relatively iso-lated projects that are efficient and properly staffed but are only marginalin terms of the replanting effort they induce, is no longer relevant. Mis-directed sector policy now affects the success even of these projects. Asa condition of further lending in the cocoa sector in the medium term, theBank Group should require action to be taken on the above steps.

APPENDIXTable 1

REGIONAL PRODUCTION OF COCOA('000 tons)

Total Eastern Ashanti Brong Ahafo Western Volta Central

1947/48 208 46 10 36 11 20 251948/49 278 67 82 44 15 26 441949/50 248 54 72 43 14 24 391950/51 262 56 78 45 17 25 421951/52 211 48 61 37 12 24 301952/53 247 50 78 41 12 28 381953/54 211 40 60 43 10 22 361954/55 220 41 69 43 11 22 341955/56 229 )8 68 51 12 28 321956/57 264 40 78 55 15 32 441957/58 207 35 70 35 10 22 351958/59 256 39 85 70 8 21 331959/60 317 47 105 74 14 23 531960/61 432 64 148 96 23 31 711961/62 409 54 134 85 21 29 871962/63 421 82 149 81 23 21 661963/64 437 82 154 89 24 28 601964/65 549 106 187 121 34 27 741965/66 409 71 153 100 24 20 411966/67 375 68 128 86 25 19 491967/68 423 75 139 107 28 24 511968/69 330 56 107 92 21 14 401969/70 411 68 124 114 31 21 541970/71 421 73 128 110 86 15 591971/72 463 85 143 117 50 10 571972/73 415 74 124 111 43 22 431973/74 349 65 105 77 41 - 471974/75 3701975/76 3901976/77 330

Source: Cocoa Annex to Economic Report of March 9, 1972 and CMB.

Note: Columns may not add due to rounding.

APPENDIXTable 2

SEED GARDENS PRODUCTION'000 pods

Seed Gardens 1973 1974 1975 1976"/

Bunso 278 425 529

Pankese 59 102 142

Apedwa 86 127 116

Biene 39 53 131

Asikuma 26 43 101

Assin Foso 23 34 14

Funso 91 121 239

Kwadaso 33 80 124

Bechem 45 39 88

Buako 113 117 129

Total: 793 1141 1614 1646

Planting 2Potential-/(ha) 9200 14200 20000 20400

1/ Details for 1976 are not available.

2/ At 80.5 pods/ha including replacements for the two following years.

GAMMALIN "20" SALES TO FARMERS BY REGION1956/57 - 1974 ('000 gals.)

Year a/ Brong--Ahafo/AshantiS/ Western/CentralLE/ Eastern Volta TotaLb/

1956-57 23.74 2.82 3.95 0.22 30.731957-58 64.03 21.84 22.85 9.37 118.091958-59 105.70 41.42 38.15 5.45 190.721959 85.86 31.54 30.48 2.50 150.381960 129.56 64.14 104.38 14.38 312.471961 93.34 51.28 44.06 8.96 197.651962 103.10 54.72 48.70 3.93 210.461963d/ 128.81 69.52 61.76 7.29 267.381964d/ 96.27 51.07 45.38 3.73 196.451965A/ 42.38 22.49 19.98 1.64 86.491966 11.98 8.68 5.73 0.95 27.341967 23.16/36.75 5.82/15.21 19.32 3.24 103.501968 38.87/63.89 13.09/27.05 30.89 5.44 177.221969 38.83/77.80 22.66/28.58 26.66 4.16 198.681970 53.23/108.28 78.06 47.45 1.76 288.811971 15.91/33.00 29.12 15.99 - 94.061972 10.54/33.56 57.31 6.79 9.56 117.791973 33.12/78.56 80.36 43.22 10.46 249.121974 27.26/30.86 43.12 43.74 7.28 155.561975 42.55/54.36 17.28/31.27 33.27 6.50 202.02

a/ The first three years listed are fiscal years: April-March.From 1959 on, data are according to calendar year.

b/ Some rows may not add to total due to rounding and distribution to Suhum Project, CRIG, and Accra 1,egion.c/ All data for Brong Ahafo and Ashanti have been grouped together because prior to 1960 no distinction was

made between the two regions. The same applies to Western and Central regions.

d/ UGFCC sales during 1963-1965 have been allocated to the regions so that the regional sales for those

years are the same proportions of the total as existed in 1962.

(DH

BUDGETARY IMPLICATIONS OF INCREASE IN COCOA PRODUCER PRICE

(in millions of constant 1977 cedis)

Producer Production Exports 1/ CNB Costs Value of Sales Budget RevenuePrice (L.tons) (L.tons) 4per ton 2/ total iper ton 4/ total $=41.15 $=41.73 $=43.004/30 kg local foreign

197 7

430 360,000 5/ 310,000 1287 375 24 4186 1298 900 1536 2948

450 450,000 400,000 1867 740 7 4186 1674 928 1761 3609

1980

~30 320,000 270,000 1287 325 24 1791 484 135 365 875

50| 450,000 400,000 1867 740 7 1791 806 59 459 1345

1985

,30 275,000 225,000 1287 266 24 1171 263 - 27 93 357

50| 450,000 400,000 1867 740 7 1171 468 -279 -48 463

1/ Local processors are assumed to use 50,000 tons;

2/ Includes, in addition to payment to producers, a total of ~272 to cover costs and subsidies. There are no subsidies at aproducer price of 050;

3/ The foreign exchange cost consists mainly of imports of sprayers and insecticides;

4/ Price assumptions: 1977/78 main crop sold at $3700 per ton less $60/ton freight; 1980 and 1985 IBRD projectedNew York spot price of $0.87 and $0.57 per lb. resp. (conscant 1977 prices), less 20 percent to allow for freight c m

and difference between spot and forward prices;

5/ Based on three-year average.

ANNEX III

LIVESTOCK SECTOR

Paragraph

BEEF CATTLE AND SMALL RUMINANT PRODUCTION

Livestock Numbers and Productivity 1 - 6Organization of Production: Private and Public 7 - 13Animal Health: Threat and Response 14 - 17Marketing System 18 - 21

POULTRY AND PIG PRODUCTION

The Organization of Production: 'Commercial' and 'Village' 22 - 26Animal Health 27Supporting Services: Day Old Chick Production 28 - 32

Feed Milling 33 - 38

Veterinary Supplies 39The Feed Supply Base 40 - 42

Marketing System 43 -44

DAIRY PRODUCTION

Milk Production 45 - 48

Dairy Processing 49 - 51

RABBIT PRODUCTION 52 - 55

MARKET FOR LIVESTOCK PRODUCTS

Role of Livestock Products in Human Nutrition 56 - 58Supply and Demand for Livestock Products 59 - 62

LIVESTOCK SECTOR INSTITUTIONS

Ministry of Agriculture 63 - 68Research 69 - 72

Finance for Livestock Production 73 - 77

DEVELOPMENT PROJECTS AND POLICIES

Government Policy Under the Five Year Plan 78 - 80Livestock 'Development Outside the Ministry of Agriculture 81Coordination of Policy 82Development Policy Options 83FAO/UNDP Meat Project Study 84 - 85Recommended Bank Policy 86

APPENDIX 1: StatisticsAPPENDIX 2: Supply and Demand for All Meat TypesAPPENDIX 3: Livestock Production and Nutritional Priorities

CHARTS

MAP

ANNEX IIIPage 1

LIVESTOCK SECTOR

BEEF CATTLE AND SMALL RUMINANT PRODUCTION

Livestock Numbers and Productivity

1. Two separate annual estimates are made of livestock numbers: bythe Department of Veterinary Services, and by the Statistics Section of theMinistry of Agriculture's Planning Division. These are both based on groundcounts by the Department's local staff which in each case number over 400.Livestock numbers indicated in these surveys are, however, significantlydifferent, and in the case of sheep, goats, poultry and pigs, the discrepanciesrange up to 250 percent. It is, therefore, not possible to indicate livestocknumbers with accuracy. In the following text, both sets of numbers will bementioned, although the latest available count of both departments is for1974. An estimate of the total output of the sector is shown graphically onChart 1.

2. Cattle. The 1974 counts show cattle numbers to be between 740,000head (Veterinary Department) and 874,000 head (Statistics Section). Northernand Upper Region account for 80 percent of total cattle numbers. The cattlepopulation is larger towards the end of the year and declines during the lastmonth to the first two months of the following year as the dry season causessales to peak. The two available estimates give very different picturesof the structure of the herd showing, for instance, the percentage of cows asa proportion of the total herd ranging from 33 percent (Veterinary Department)to 41 percent (Statistics Department). However, if the assumption is madethat each set of figures is consistent within itself, it may be inferred thatthe structure of the herd is stable. Thus Appendix 1, Table 2, details thecomposition of the Upper Region herd over the period 1969-74 showing a verystable relationship between each class of stock and the herd as a whole. Anindication of marketed offtake rates is provided by comparing the VeterinaryDepartment's annual record of urban slaughter, minus imports, with the sameDepartment's herd size figures for each year. These are summarized below:

Table 1: BEEF CATTLE: HERD SIZE AND OFFTAKE RATE

Slaughter % of HerdHerd Minus Including Probable

Year Size Imports % of Herd Unofficial Slaughter

1970 599,424 32,745 5.5% 7.0%1971 614,049 40,452 6.6% 8.1%1972 661,255 62,458 9.5% 10.1%1973 708,210 47,741 6.7% 8.2%1974 744,602 61,697 8.2% 9.7%

Source: Department of Veterinary Services annual reports (seeAppendix 1, Table 1, and Appendix 2, Table 1).

ANNEX IIIPage 2

Whilst these figures are not reliable on a year to year basis, they indicateover the whole period a low offtake rate. Whilst official slaughter figuresiay understate actual slaughter by over 20 percent, the Statistics' Unitassessment of herd size would indicate a comparable marketed offtake rate.Over 90 percent of the national herd is of the West African short horn type,one of the smallest cattle breeds in the world. The remainder are Ndamas,Zebus and Sanghas.

3. Productivity under existing management conditions is poor. Calvingrates are estimated at about 55 percent 1/, whilst mortality rates are esti-mated at 5 percent for adults, 30 percent for calves and 8 percent for immatureanimals. The production characteristics of the main types of livestock may besummarized as follows:

Table 2: PRODUCTION CHARACTERISTICS OF MAINTYPES OF CATTLE

Age at Average Calf Average Weight of Average CarcassFirst Weight 3 yr. Old Animal Weight

Breed Calving (lb) (lb) (lb)Male Female Male Female

West AfricanShorthorn 3.5-4 40-43 550 425 275 225

Ndama 3-3.5 42 650 550 - -Sangha 3-3.5 53 725 675 - -

Sokoto Gudali 3.5 53-56 1,190 734

Source: USAID/Government of Ghana Livestock Handbook, Accra 1964.

4. Sheep and Goats. The following figures summarize the two estimatesof the sheep and goat population in 1974:

Goats Sheep

Veterinary Department 744,000 902,000M.O.A. Stats. Unit 1,612,000 1,386,000

These discrepancies are so great that doubt must be case on the value of eachof them as an indication of the rate of growth of the flock size. However,the Veterinary Department figures suggest that the rate of growth for bothflocks is between 5 percent and 6 percent per year. The uncertainty abouttotal flock size and the absence of detailed data on individual village flocksmakes it difficult to arrive at an accurate assessment of marketed offtake.

1/ FAO Country Perspective Study 1976 (draft).

ANNEX IIIPage 3

5. The predominant sheep is the West African Dwarf, with a matureliveweight of about 40 lbs. These are sometimes crossed with the biggerSudan sheep. The local sheep has an average lambing rate of 90 percent 1/ anda fast rate of growth but is susceptible to health problems such as internalparasites and pneumonia. Ownership of sheep is spread very widely through-out the country and is not restricted to beef cattle owners. During thelast few years, there has been an increasing tendency for peri-urban farmersto develop small sheep flocks, often using communal grazing facilities andholding the animals in pens overnight. The largest flocks of sheep, however,are found in the Northern and Upper Regions where the bulk of the nationallivestock herd is concentrated.

6. The indigenous dwarf goat weighs about 35 lbs at maturity. Itis very fertile and frequently produces twins and triplets and is capableof reproducing more than once a year under favorable conditions. Infantmortality rates are high, at up to 30 percent, mainly as a result of internalparasites and pneumonia. The ownership structure of the national goatherd is similar to that of sheep but commercial development is even lessadvanced and is restricted by severe management problems under controlledconditions.

The Organization of Production: Private and Public

7. Most of the cattle population is owned by sedentary farmers orurban dwellers and grazed on land which is available communally. Thereare very few semi-nomadic or nomadic livestock owners of the type foundthroughout the Sahel. However, many of the larger herds found throughoutthe country are divided into smaller herds for grazing purposes and herdedby Fulani herders on behalf of their owners. This leads to an inefficientsystem of production since the Fulani are paid with milk, for consumptionor sale for cash, to the detriment of the calf.

8. Several commercial beef ranches exist all of which are in theearly stages of development. Their ownership, capacity and stage ofdevelopment are summarized below:

1/ FAO Country Perspective Study 1976 (draft).

ANNEX IIIPage 4

Table 3: COMMERCIAL BEEF RANCHES

Ranch Developer Acreage Development Stage

Shai Hills Bank of Ghana 18,000 1,200 head; 11 paddocks,2 dams

Branam Ghana Livestock Co. 32,000 UndevelopedTadzewu Ghana Livestock Co. 2,000 50% stocked; partly

developedPong Tamale GLC/MOA 0 GLC withdrawing from

operationsWenchi ADB 0 PreliminaryTongu ADB 66,000 850 head; understocked

Of these ranches, the Shai Hills ranch, managed by Gunn Rural Ltd. is themost developed. It is, at present, successful, earning satisfactory finan-cial returns from the purchase of both breeding and fattening stock inUpper Volta, and the subsequent resale of the fattening stock on the Accramarket, benefiting from the undervalued rate of exchange between CFA francand the cedi and the very high beef price prevailing in Accra (two and ahalf times above the world price, at the official exchange rate).

9. The ADB Ranch at Tongu covers 66,000 acres, with a target carryingcapacity of 8,000 animal units. It is designed as a cooperative venturewith livestock owners from outside the ranch contributing cattle but withranch development being handled by ADB. ADB's return is limited to receivingone third of the sales value of marketed stock. At present, of the ranch's850 head, 550 are owned by 36 cooperators and 300 by ADB: it is understockedand suffers from an inability to buy breeding stock in neighboring countriesas a result of the foreign exchange constraint. The ranch is facing severeproblems of financial liquidity and the understocking factor combined withthe sale arrangements whereby ADB only receive one third of sale price ofstock will result in a negative cash flow. Plans to develop a new ranch ona similar basis at Wenchi will probably be held back until Tongu is in amore satisfactory position.

10. Whilst the development performance of the Shai Hills Ranch issatisfactory, and the prospects for both the GLC and ADB ranches may bereasonable, all of these been ranching ventures face a severe problem inobtaining breeding stock within the country. Consequently, GLC and ShaiHills have resorted to the purchase of stock in CFA countries such as UpperVolta, Mali and Senegal. The feasibility of this is dependent not only onthe continued availability of foreign exchange, but also on avoiding thedisease hazards associated with moving cattle from as far away as Senegal.Since all the ranches are in the process of development, it is too early tojudge their long-term viability.

ANNEX III

Page 5

11. Sheep Ranches. Several small sheep farms have been developed in

Ghana by the Ministry of Agriculture, the Cargo Handling Co. Ltd., RegionalDevelopment Corporations and private individuals. These usually include afew goats but the physical problem of handling these animals has, so far,limited the numbers held in commercial conditions. The best developedsheep farms are the Ministry Ranch at Ejura in Ashanti Region and theCargo Farms Ranch near Tema. The Ejura Ranch was incorporated in anFAO/UNDP/Government of Ghana project in 1975. Its objective is both to

assess the costs and returns of different management systems (e.g., the

extent to which pasture development is a profitable proposition), and toproduce breeding stock for sale to local sheep farmers. The total availablearea is now about 1,700 acres of which about 45 acres have been planted to

improved pasture 1/ and about 10 acres to maize.

12. At present, sheep numbers total about 300 (including 200 ewes).The development priority is to establish additional pasture, purchase in-creased numbers of breeding ewes, and construct staff housing and officebuildings. The existing animal health situation on the ranch is good, and a

lambing rate of 100 percent has been achieved. The farm remains in the early

period of development but provides a reliable indication of probable coeffi-cients for sheep development under comparable conditions.

13. The Cargo Farms enterprise was first developed in 1973 when 1,360head were bought from the Eastern and Ashanti Regions; serious diseaseproblems were experienced and early mortality levels were high. The farmnow maintains a flock of about 600 head and the disease situation is undercontrol, although it would appear that the feed regime is still inadequateand that the farm is not yet commercially viable.

Animal Health

14. Most of the animal diseases found in West Africa are found inGhana. For cattle these include: contagious bovine pleuropneumonia, try-panosomiasis, rinderpest, parasitic gastro-enteritis, haemorrhagic septicaemia,streptothricosis, anthrax, blackleg, brucellosis and tick borne diseasessuch as heartwater and babesiosis. In the case of sheep and goats, they

include pseudo rinderpest, worm infestation, diarrhoea, pneumonia and mange(from ticks and lice). For poultry, they include Newcastle Disease, worminfestation, ectoparasites, coccidiosis and fowl pox.

15. The objective of the Department of Veterinary Services is to

organize annual vaccination campaigns against CBPP, Rinderpest, anthrax andbrucellosis, although it is severely hampered by inadequate vaccine supplies.In the case of pleuropneumonia, vaccinations are given twice a year, but thedisease is difficult to detect in its clinical stage and outbreaks occur.The problem of controlling the disease is heightened by the reluctance of

1/ The improved grass species include Giant Star (Cynodon plestostachyus),Andropogon gayanus, Pangola (Digitaria decumbens). The legumes includeCentrosema pubescens, Styolsanthes and Flemingia.

ANNEX IIIPage 6

livestock owners to slaughter their animals. The Department has assessedthe threat from brucellosis by conducting surveys of isolated groups ofcattle, and these have indicated an incidence of between 30 and 40 percent.As a result, the Department's policy is to vaccinate for the disease, butthis is not effective at present due to limited vaccine supplies. Anthraxand blackwater are controlled by an annual vaccination using 'Blanthax' avaccine which controls both diseases. Ticks are controlled by the provisionof a large number of dips throughout the northern part of the country,though a few exist elsewhere. However, where regular dipping has beenpractised, the benefits have been noticeable, especially on the controlof streptothricosis.

16. Much of the country is infested with tsetse fly including: Glossinamorsitans, Palpalis, Tachinoides, Longipalpalis and Fusca. The above figuresfor the number of vaccinations given annually indicate that only about 2.5percent of the total beef herd is given any prophylatic against trypanosomiasis.Whilst the disease is not regarded by the Veterinary Department as a priorityproblem, it may be a more serious constraint on the profitability of thebeef herd than is generally recognized.

17. Effective control of the diseases affecting sheep and goats dependson regular anthelmintic treatment; regular dipping, and vaccination againstclostridial disease and anthrax. At present, the Veterinary Services'resources do not allow them to devote much attention to these animals. How-ever, it is recognized that under commercial operations, the disease factorwill be critical to the success of the enterprise.

Livestock Marketing System

18. The wholesale marketing of beef cattle is in the hands of privatetraders who purchase animals mainly in the Northern and Upper Regions andsell to retailer butchers at urban abattoirs in the southern towns andcities. The Kumasi cattle market acts partly as a resale market for butcherand traders operating farther south. Cattle movements are by truck; slaugh-tering is conducted in municipal abattoirs by butchers' assistants. Theconditions prevailing in these abattoirs are extremely unsatisfactory andmilitate against adequate meat inspection by veterinarians.

19. Beef has been in short supply during the period from March 1975as imports from Upper Volta have been negligible. In the past, these werehandled by traders who continue to be responsible for in-country wholesales;from 1972/73, however, imports have been handled by the Cattle DevelopmentBoard which has been established to 'purchase, handle and transport allcattle imported for consumption in Ghana'. The Board has, however, beenbadly hampered by Ghana's foreign exchange problems and the increase incattle prices in Upper Volta have risen following the drought. For thisreason, trading was suspended in March 1975. The Board now concentrates onthe importation of carcass and processed meat from overseas sources rangingfrom Argentina to West Germany, and redistributes this meat to high incomegroup commercial outlets. (For a detailed breakdown of these imports, seeAppendix 2, Tables 1 and 2).

ANNEX IIIPage 7

20. The marketing of sheep and goats is handled by a different groupof traders who buy in provincial markets where farmers with a need for cash

bring their stock for sale. These traders then resell to specialist whole-salers who maintain up to 20 animals at locations within or just outsideurban centers and at which the local butchers purchase. The animals arekept tied to stakes with access to limited grazing.

21. The capacity to produce processed beef, in the form of cornedbeef, stews, soups, etc., exists at an abattoir at Boigatanga in UpperRegion developed by the Ghana Industrial Holding Corporation (GIHOC). How-ever, the throughput of this factory has always been low as is indicated bythe following figures when compared with a capacity of 25,000 head per year:

Table 4: THROUGHPUT AT GIHOC ABATTOIR AT BOLGATANGA

Year Cattle Pigs Sheep(head) (nos) (nos)

1973 4,222 455 7251974 3,250 355 151975 1,336 411 931976 987 n.a. n.a.

Source: GIHOC

In 1976 and early 1977, the factory was offering a price of only 30 Pessewaper lb liveweight, which was not competitive with the local market price of50 to 60 Pessewa (current price is ¢1 per lb l.w.) and is certainly belowthe market price in Upper Volta. Consequently, its throughput has beenfalling continuously and at present, there seems little possibility of thisbeing reversed, although canned corned beef continues to be imported intoGhana. The factory is processing imported frozen quarters into corned beeffor the local market. The problems of the plant were reviewed by the con-sulting company of Gunn Rural Ltd. in 1976 at the request of GIHOC and theBank of Ghana, and it is likely that the company's marketing infrastructurewill be improved and pricing policy revised. GIHOC also owns and managesthe town abattoir of Tema which is the only other automated abattoir inGhana, from which very limited quantities of by-products such as blood andhorn meal are available.

POULTRY AND PIG PRODUCTION

The Organization of Production: 'Village' and 'Commercial'

22. Poultry production exists in two entirely separate production andmarketing circuits: one operating within the rural or village economy, and

ANNEX IIIPage 8

one within the peri-urban and commercial economy. The former is largelyself-perpetuating, relying mainly on indigenous birds, and its main functionis to produce eggs and meat for the rural population at no cash cost to thepoultry owners; the latter is a derivative of the post World War II poultryproduction revolution and is a modern industry dependent on imported exoticparent stock and a sophisticated feed regime. Production in the latter caseis mainly in the hands of civil servants and businessmen and women for whompoultry production is a secondary source of income. The pig industry issimilarly divided between village production based on the indigenous 'AshantiBlack' pig, and imported exotic stock often managed in peri-urban productionunits.

23. Village Production. The size of the village poultry flock is notknown with any accuracy: the figures of neither the Veterinary Departmentnor the MOA statistics unit separate the village flock from the commercialflock. Their aggregate estimates are, however, 4.2 million (Vet. Dept.)and 8.4 million (Stats.). However since commercial production of day oldchicks totals about 4.6 million birds per year (see para 24 below) theVeterinary Department figure is clearly too low. The residual figure of3.8 million village birds implied by the Statistics unit would also appearrather low, since the total one million rural families probably averagebetween 5 and 10 birds each and urban and peri-urban families also keepindigenous birds on a scavenger basis. A total 'village' poultry populationof 8 million head would, therefore, seem quite likely. These birds aremainly indigenous but now include important strains of exotic stock such asWhite Leghorn and Rhode Island Red.

24. Figures for the productivity of this flock are not available, buta figure of about 50 eggs per year per laying hen is likely (compared to 200per year in the case of the commercial sector). The output from the flockwhich is not required for family consumption is marketed in urban areas atprices comparable to the output from the commercial sector, the marketingfunction being handled by specialist egg and cull bird traders (see Chart 1).

25. Commercial Production. The commercial poultry sector has grownvery fast since its inception in the mid-1960s when the first commercialhatchery was set up by the State Farms organization at Odokor near Accra.For some time, both before and after this, day old chicks were importeddirect from Europe and North American, but these imports are now minimalsince the country's four commercial hatcheries import day old parent stockand multiply these for distribution within the country. Production fromthese hatcheries now totals about 4.6 million day old chicks per year. Thelayer birds produced from these hatcheries are kept in units averaging about1,000 birds but there are some layer producers with units of up to 20,000.The broiler stock are kept in units averaging about 20,000 birds per year,but with some larger units of up to 100,000. The industry is concentratedon the urban areas of southern Ghana and, in particular, on the two largeconurbations of Accra and Kumasi, with the majority of layer stock aroundKumasi.

ANNEX IIIPage 9

26. Pig production from exotic stock has not grown equally fast due to avariety of factors of which consumer taste resistance is the most important.Whilst the most important resistance comes from the Moslem population, thereis also a distaste for pigs, regarded as an unclean animal, from many socialgroups within Ghana. A 'guesstimate' would suggest that there are about 200commercial pig producers with an average of about 10 sows. There is aninter-producer market for the sale of breeding stock which complements thebreeding stock produced from the University and MOA farms.

Animal Health

27. The main health problems for the poultry industry remain Newcastledisease and fowl pox. The former is most often treated by an injection of'Hitchner B 1' at 2 weeks, and of 'Lasota' at 6 weeks, with a final injectionof 'Lasota' at 16 weeks. Recently, there has been an increased threat fromGumboro disease which is being met by vaccination at 21 days. However, atpresent this vaccine is not considered to be entirely effective. Vaccinationfor fowl pox is also given separately or jointly with Newcastle vaccine, oralternatively a coccidiostat is mixed in with feed supplies. The principalveterinary requirement for the commercial pig sector is an iron injectionagainst anaemia. In addition to this, deworming treatment and a vitamin andmineral supplement are required.

Supporting Services

28. Day-Old Chick Production. Four hatcheries now supply commercialchicken producers with day old chicks. The largest of these is PomadzePoultry Enterprises Ltd., which is publicly owned, followed by Darko FarmsLtd. of Kumasi, which is privately owned. The output of these, and of twosmaller hatcheries, is shown below:

AINEX III

Page 10

Table 5: DAY-OLD CHICK PRODUCTION

OutputHatchery Type of Bird Year (Million Chicks)

Pomadze Layers 1973/74 0.81974/75 1.11975/76 1.0

Broilers 1973/74 1.11974/75 1.41975/76 2.4

Darko Farms Layers 1975/76 0.8 1/Chanachix )State Farms) 1975/76 0.4 2/Total Layers 1975/76 2.2

Broilers 1975/76 2.4

Total 4.6

1/ Estimated from parent flocks.2/ Based on 1975 figures.

Production in late 1976 fell below these levels as a result of the seriousshortage of maize available to the poultry industry.

29. Darko Farms is the most successful of these commercial hatcheriesand has been expanding continually for the last five years. The companynow has 11,000 parent stock, and will be increasing the number. Its ex-pansion plans include the development of a new feedmill in the Kumasi area,the production of irrigated maize at Abebubu (in conjunction with a privateAmerican company) and the provision of an 'integrated package' of inputs topoultry growers in the Ashanti area.

30. Pomadze Poultry Enterprises has been in operation since 1968/69and was launched with an incubator capacity to produce 10 million chicks peryear. It has expanded production at an annual rate of 30 percent per yearover the period 1973/76 to the 1975/76 total of 3.3 million birds. Originallydeveloped within the Department of Animal Husbandry, it is now incorporated asa publicly-owned company financed by the banks and the Government. In commer-cial terms, its performance has been poor and its continued expansion isdependent on its refinancing and improved management.

31. The State Farms' hatchery has been in production since the mid-1960s and produces about 250,000 birds per year of which two-thirds arelayers. About two thirds of the total output of chicks is transferred tothe organization's fourteen layer and broiler production units which aredistributed throughout the country. The hatchery is not, therefore, an

ANNEX IIIPage 11

important supplier of chicks to the private sector. Ghanachix is a privatelyowned company which at one time initiated the production of parent stock inGhana, but found its management inadequate for this task. It now operateson a reduced scale as a supplier of day old chicks to the private sector.

32. The aggregate capacity of these hatcheries is adequate to meet theneeds of the national poultry industry. However, the service they provideto growers is inefficient measured in terms of delays in the distribution ofchicks, and the quality of chicks which growers often complain are subjectto paralysis, etc. (a by-product of the feeding regime). These two factorscontribute to the high production costs prevailing in the national poultryindustry.

33. Feed Milling. There are, at present, a total of six feed mills inGhana: Agricare Ltd. in Kumasi, the Tema Food Complex, °MUUS' Ltd., GhanaPoultry Feeds Ltd.; State Farms in Accra and the Pomadze Mill at Winneba. Inaddition to these units, both the breweries and the floor mills sell some oftheir by-products directly to poultry growers. Section D (paras. 40 - 42below) summarizes the availability of raw materials for feed processing. In1976, the shortage of inputs reached crisis proportions and several millstemporarily suspended production. Figures for the milling and storagecapacity and 1975 output of the mills mentioned above are shown below:

Table 6: CAPACITY AND OUTPUT OF FEEDMILLS (1975)

Milling CapacityMill per Hour 1975 Output Storage Capacity

(t) (t) (t)

Agricare 4 c. 7,000 l/ 1,500Tema Food Complex 4 11,750 2/ 5,000Winneba 4 c. 9,000 2/ 3,500Odokor State Farms 3 n.a. 1,500MUUS 2-1/2 c. 6,000 2/ n.a.Ghana Poultry Feeds 1 n.a. n.a.

1/ Concentrate only.2/ Concentrate + complete meal.

34. The Agricare mill was established in 1968, and Pfizer Ltd. remainsthe majority shareholder, though this majority holding will probably bepurchased by Ghanaian institutions or individuals in 1977, in accordancewith the National Investment Decree. Agricare produce a concentrate ratherthan a complete meal since the farmers in the Kumasi area, where maize

ANNEX IIIPage 12

suppliers are usually plentiful, prefer to purchase the concentrate and mixin maize, brewers' grains and wheat bran. 25 percent of the concentrateingredients are imported. A coccidiostat is mixed in with the poultry 'starter'and 'grower' rations. The company is at present hoping to expand its opera-tions and provide a complete meal as well as a concentrate. Partly to supportthis, it is planning to invest in increased storage capacity.

35. The Tema Feed Mill is part of the Tema Food Complex which includesprocessing facilities to produce vegetable oil, flour, fish meal and cannedfish as well as animal feed. The feed mill is designed to draw on the by-products of the other processes, but is only partly able to do this in viewof an inadequate turnover in the groundnut processing and fish meal plants.The plant produces both a complete meal and a concentrate.

36. The Winneba mill was constructed in 1971 as part of the operationsof Pomadze Poultry Enterprises Ltd.; it is a continuous mixer mill suppliesby Messrs. Amandus Kahl of Hamburg at a total cost of ¢ 240,000. Of themill's two silos one has a capacity of 2,500 t and is linked to a conveyorbelt; the other has a capacity of 1,000 t with no conveyor belt.

37. The figures indicate that all of the mills are operating wellbelow their capacity. In 1976, the serious national shortage of maizecaused output to fall severely. The mills suffer from inadequate storagecapacity which makes it impossible for them to purchase maize and otherinputs in large quantities at the end of the harvest season, and so to haveadequate control over input supplies and their own pricing policy. Never-theless, production cost figures 1/ indicate that the Pomadze mill wasmaking a profit for the first nine months of 1975/76 (before maize becamealmost unobtainable). Agricare was also making a profit during this period.Information has not been obtained on the profitability of the other mills, butit is likely that they were making a profit until mid-1976. The quality ofthe feed produced varies, and growers regularly complain of its inadequacythough their complaints are seldom subjected to scientific analysis. However,the Standards Board of Ghana is about to introduce a feed standards systemwhich will be backed by law.

38. The main problem faced by smaller growers is that they must collectfrom the mills or their regional distribution centers themselves with con-sequent high outlays on transport, and the probability of a break in theregularity of feeding as a result.

39. Veterinary Supplies. Poultry and pig growers rely mainly on theDepartment of Veterinary Services for their drug supplies, but also pur-chase from private commercial suppliers such as "Vetrico Ltd". Since boththe Department and the private suppliers have inadequate access to importpermits they are unable to guarantee a reliable supply to growers andproductivity suffers as a result.

1/ See UNDP/FAO Meat Development Project Study (Annex 5, Table 1), Rome1977.

ANNEX IIIPage 13

The Feed Supply Base

40. Appendix 3, Table 3 indicates the total estimated feed requirementof the livestock sector in 1975/76. This is summarized below:

Table 7: ESTIMATED FEED REQUIREMENT OF LIVESTOCK SECTOR (1975/76)

OtherMaize Ingredients Total

…----------------…(tons)--

Layers 30,000 30,000 60,000Broilers 2,000 3,000 5,000Pigs 5,000 7,000 12,000

Total 37,000 40,000 c. 80,000

The figures are estimates derived from day old chick production, assumedmortality, and feed mixing practice.

41. Maize. Ghana's ability to sustain production of both energy andprotein foods at a sufficient level to meet human requirements, and theanimal requirements identified above is questionable. Maize supplies inGhana are volatile, and in 1976, were at a level too low to justify thechannelling of 40,000 tons into the feed sector, since in that year Govern-ment had to import 10,000 tons through USAID for human consumption innorthern Ghana and the Bank of Ghana imported a further 10,500 tons foranimal consumption. An additional 40,000 tons will be imported by Govern-ment in early 1977 for the feed sector, and it is expected that a further20,000 tons will be imported for human consumption. A summary of maizeproduction and utilization figures in recent years is given below:

Table 8: MAIZE PRODUCTION AND UTILIZATION

1966 1970 1974 1975 1976

Production ('000 t) 353 452 444 343 (300) 1/Used in Feed ('000 t) n.a. n.a. 40 40 30Feed as % of Total n.a. n.a. 9% 12% 10%Exports/Imports

1/ Guesstimate.

ANNEX IIIPage 14

Although the production figure for 1976 is not yet known with any certaintyit is clear that there has been a very serious fall in total output, to alevel below that achieved in 1966. Until production returns to at least1974 levels, the poultry industry's demand for feed will be competing withthe demand for human consumption, and forcing up the domestic price level.The availability of other feed ingredients is more satisfactory but in somecases problematic.

42. Other Feed Ingredients. 1975 wheat imports for Ghana's three flourmills totalled 150,800 tons. A flour extraction rate of 74 percent indicatestotal wheat bran availability of 40,000 tons, an important part of which isnot exported in order to increase the flour mills' capacity to obtain taxbenefits available under the Government's export incentive scheme. However,with a limited adjustment to Government policy in this respect adequatequantities of feed would be available. The total availability of driedspent brewers' grains is about 20,000 tons per year. The four breweriesoperating in Ghana are all expanding production and two of them are installinga spent grains drying plant. Production of groundnuts in the shell totalled108,000 tons in 1975; a cake extraction rate of 43 percent indicates a totalgroundnut cake availability of 46,000 tons. However, in practice the millersfind it difficult to obtain groundnut cake and rely partly on imports fromother West African countries. Ghana imports roughly one quarter of her totalfish requirement and fish meal is, therefore, a scarce commodity. A limitedamount of fish meal is processed by the Tema Food Complex but this is allutilized by its own feed milling division. Other companies use local suppliesof anchovies.

Marketing

43. Poultry. The wholesale market for poultry products is wellorganized by trading women, dubbed 'queens', who provide the key link betweenproducer and consumer, and may be involved in retailing as well as whole-saling. The traders deal with regular producer and retail clients. A sig-nificant part of Kumasi's egg production is railed to Accra through the'queens', some of whom have been financed by ADB. The limitation of thissystem is mainly its inability to handle short-term market surpluses sincethe traders do not generally own or rent cold stores. Alternative marketingchannels have been developed in Kumasi and Accra on a cooperative basis. InKumasi, the Ashanti Poultry Farmers' Association has existed since 1970-71.The latter includes about 1,000 members in different parts of Ghana whodespatch a part of their output to Accra. Its turnover has, however, fallenevery year since its inception: from 444,000 dozen eggs in 1970/71 to132,000 in 1974/75 (figures for 1975/76 are not available). In 1974/75,it also sold about 70,000 dressed birds; it has a cold store capacity forabout 40,000 dozen eggs. It appears that the Association has been lockedinto a low throughput/high overheads situation and has never been able tooffer growers an attractive price.

44. Pigs. In both Accra and Kumasi pig processing is dominated by afew large buyers who cater for the high income market. In the case of Accra,

ANNEX IIIPage 15

this is the "Accra Ice Company" which kills, processes and wholesales to thelarger department stores, selling out the trotters, etc. to the mass market.A joint NIB/ADB project is now being developed, using World Bank funds 1/channelled to NIB, to establish the 'Quality MIeat Co.' which will have thecapacity to slaughter 24,000 head per year in Tema. This company would buyon contract from producers especially ADB and NIB borrowers, and wholesaleto high income retailers.

DAIRY PRODUCTION

Milk Production

45. There is no developed dairy sector in Ghana although over the last20 years exotic dairy stock have been imported in different batches both bythe Ministry of Agriculture and by the University farms. There are no dairyunits at Amrahia near Accra (developed by the Animal Husbandry Department ofMOA), Nungua near Accra (developed by the University of Legon Farm), andKumasi (developed by the University of Science and Technology).

46. Amrahia Dairy Farm. This farm was the first significant dairydevelopment in Ghana dating from the early 1960s, and originally stockedwith heifers imported from Holland. It now includes 650 head of which 80are milked daily; the farm extends to 1,395 acres, 70 percent of which aredeveloped as pasture. Between 4 and 5 pounds of concentrate are fed for eachgallon produced. All calves are reared on whole milk, but milk yields are lowand sales suspended. These are normally made at 30 Pessewa per litre, bothto private individuals and to the two dairies in Accra. The annual cost ofthe farm is now ¢ 70,000.

47. University of Legon Farm, Nungua. For some years, the UniversityAnimal Science Department has been assessing the productivity of variouscrosses between local beef animals and imported dairy stock. The farm nowhas a total of 120 in its dairy herd, of which 40 are milked; most of theproduce is sold to University staff. The following results summarize thefarm's experience in its cross breeding program:

1/ Loan 1181-GH.

ANNEX IIIPage 16

Table 9: UNIVERSITY OF LEGON FARM - CROSS BREEDING PROGRAM

Jersey Jersey Jerseyx X x

WAS 1/ N'dama Sokoto GudaliFl Fl Fl

(1-7 lactations) (1-5 lactations) (1-4 lactations)

Lactation Days 295 291 291Milk yield/day (lb) 13.3 12.6 15.4Total milk yield (lb) 3,926.2 3,678.6 4,476.2Fat % 5.24 5.50 5.46

Total Fat (lb) 205.5 202.4 244.6

1/ West African Shorthorn.

Source: Department of Animal Science, University of Legon; 1966/67.

48. UST Dairy Farm, Kumasi. This unit has been developed by theUniversity in conjunction with CIDA and now includes 27 cows. Productionaverages 200 litres per week most of which is sold in plastic cartons bothin Kumasi and in other urban centers at a price of 70 Pessewas per litre.The project's directors hope to expand this program by importing an addi-tional 100 cows from Canada in 1977 and developing a number of local small-scale dairy men whose output would be processed and marketed by the UniversityFarm. This would be linked to an extension and credit distribution program.Even though the present operation is intensively managed, it has not estab-lished the basis for commercial viability. Its further expansion and theadoption of dairying by local dairymen should, therefore, be carefullyquestioned.

Dairy Processing

49. The largest demand for dairy products in Ghana is for tinned 'IdealMilk'. Fifty million litres of this are produced annually by Food Specialistsof Ghana Ltd. at Tema, made up entirely from imported milk powder. The twoother dairy processing units which exist in the Accra area are those of FanMilk Ltd., and of Messrs. Sam and Sam Ltd. The former company was establishedin 1961/62 by a Danish/Ghanaian partnership and it now treats 5-6 millionlitres per year; the largest part of its sales is in the form of UHT milk intetrapaks, followed by Ice Cream and 'lollies'. The company has pioneeredthe urban market for dairy products in Accra multiplying its sales tenfoldsince its establishment, an is now confident that it could immediately expandsales by a further 30 percent if it had access to the necessary import permitsfor milk powder.

ANNEX IIIPage 17

50. Fan Milk has, in the past, relied on the Amrahia Dairy Farm tosupply a small part of its required milk supply. Since Amrahia is no longermarketing milk commercially, the company is considering investment in a 50cow unit, which would rely on Fl exotic crosses with local stock, and forwhich a feasibility study has been completed by a Danish consultant. Thecompany also expects to purchase fresh milk from the 'Kwahu Hills DairyProject' planned by the Ministry of Agriculture whose planned output is atotal 4.8 million litres annually. The second dairying plant of Messrs.Sam and Sam Ltd. is a much smaller unit which collects fresh milk fromabout 60 beef herds grazed on the Accra Plains and processes most of thisinto butter. In the wet season, this totals about 1,000 gallons per week,and in the dry season about 2,000 gallons. The producers are paid 30 Pessewafor a pint bottle, which retails at V 1.0. This practice is discouraged bythe Department of Animal Husbandry since it is detrimental to the nutritionof the calves. However, the company which in the past has also been partlydependent on Amrahia, is now considering investment in a direct dairy pro-duction unit with exotic stock imported from Austria, if import permits canbe obtained.

51. Alternative Cost of Imports. Utilization of locally produced freshmilk is expensive for the dairy processing plants since current prices forimported skimmed milk powder and butter milk powder could facilitate the saleat cost of reconstituted milk at about US10 per litre (11.5 Pessewa) ex-cluding import duties, and about USJ13 (15 Pessewa) per litre includingduties. These 'break-even' prices compare very favorably with the currentSam and Sam price of ¢ 2 per litre. A threefold increase in the price ofimported dairy products would increase the cost of one litre of reconstitutedmilk to about USU30 or 35 Pessewa per litre. (See Appendix 1, Table 4).

RABBIT PRODUCTION

52. For the past five years, the 'National Rabbit Project' outsideAccra has pioneered the production of rabbits under Ghanaian conditions,importing exotic breeding stock 1/ and crossing these with indigenous animals.The main objective of the project has been to supply breeding stock to localproducers, but it has also supplied carcasses in limited quantities to themarket. It now includes a total 8,000 rabbits of which 3,500 are does, andis financed through the Department of Animal Husbandry.

53. There are no reliable figures on the total number of commercialor of 'backyard' rabbit producers in Ghana but empirical evidence suggeststhat they are growing, in response to rabbits' rapid reproduction rate.The production parameters achieved at the National Rabbit Project are,however, relatively disappointing by international standards. The average

1/ Including New Zealand White, Checkered Giant, Flemish Giant, Thruinger,Blue Vienna, Alaska, Yellow Silver, California, Champagne Silver andFrench Lop.

ANNEX IIIPage 18

litter size is about 4.5, with a 5 percent mortality between birth andweaning, 1/ and an average annual production per doe per year of about 14iryers" or chree litters per year. The average liveweight of slaughter stocklis between 3 and 3-1/2 lb at between four and five months old. In the case ofslaughter stock, concentrate, valued at 30P per kg, is fed between weaning axtwo months and slaughter at five months at a daily rate of.150 grams. Thesefigures imply a feed conversion ratio of 9:1 and feed costs of ¢ 4.3 perrabbit compared to a farmgate sales price of ¢ 4.8. Given the existence ofhigh overhead costs at the project, (total annual costs are ¢ 70,000) thismargin is inadequate.

54. The unsatisfactory feed conversion ratio has arisen as a result ofthe project's policy of feeding high quantities of concentrate, rather thanrelying on a heavier use of grass and other feed crops. The project includes80 acres of land on which it grows potatoes, cassava, guinea grass, tridax,pueraria-javanica and giant star grass, and a much higher proportion of thesecrops should be included in the ration, even if this implies a slower rate ofgrowth. Further, the size of the project is too large for efficient manage-ment and in the view of the 'Officer Administering the Project' a flock of1,000 would be more appropriate. Although it appears disease problems havebeen contained for most of the project's life, its size makes it potentiallysusceptible to animal health problems.

55. The objective of the breeding farm is to supply small-scale growerswith quality breeding stock. The 'target' small unit includes about eightdoes and two bucks, and it is envisaged that growers would rely much moreheavily than the project does itself on grass as a part of the ration.Ideally, the rabbit producer would develop about one acre of panicum or asimilar appropriate grass. Although the number of such small units in in-creasing the industry remains unorganized and has no adequate marketing,extension or training service. It appears that with an adjusted feedration, the prospects for rabbit production are good, and that the existingproject with a reduced flock should continue to be developed as the nucleusfor a national industry, initially supplying breeding stock to multiplicationunits in different regions.

THE MARKET FOR LIVESTOCK PRODUCTS

Role of Livestock Products in Human Nutrition

56. Average per capita consumption of animal protein products in Ghanais adequate except in the Upper and Northern Regions, and on the coastalplain (excluding the coastal cities). The consumption of all protein foods

1/ Figures analyzed for the two periods: August 8, 1974 to November 22,1974, and December 4, 1974 to June 21, 1975.

ANNEX IIIPage 19

is also adequate on an average basis, although certainly skewed in favor of

higher income groups, and of adults as against children. On the other hand,energy food intake (cereals and root crops) is inadequate in all parts ofthe country. These conclusions are drawn from the major National IYtritionSurvey of 1961/62 and supported by twice yearly surveys of specific com-munities undertaken by the University of Legon, Department of Nutritionand Food Science. The relevant data are discussed at greater length inAppendix 3. They show an average intake of between 15 and 25 grams of animalprotein per head per day in the forest and urban coastal areas, of 12 gramsper day on the coastal plain, and of 5.5 in the northern zone. Over 90percent of this total consumption of animal protein is derived from fish andgame meat, and marketed meat supplies, therefore, make only a small contribu-tion to fulfilling this need.

57. Investment designed to increase the output of marketed meat must,therefore, be assessed against this background, and it should be recognizedthat increases in production of 20 or 30 percent above present levels willonly increase total animal protein supplies by 2 or 3 percent in aggregate,and will be hardly significant on a per capita basis. The nutritLon datahas particular significance in the assessment of investment in poultry produc-tion, and to a lesser extent in pig production, since the channelling ofenergy feed such as maize into animal production can only be done at theexpense of human consumption. The requirement of maize generated by thepoultry and pig industries is now about 40,000 tons per year, which from1974-76 was between 9 percent and 12 percent of total maize production. Sincetotal production in 1976 was about 140,000 tons lower than in 1974 thisrequirement is a major burden on supplies and contributed to the seven foldincrease in the maize price between early 1975 and late 1976. Further devel-opment of the poultry industry which increased the demand for maize for feedwould be in direct contradiction to the nutritional priorities of the country,although this should not exclude the development of the poultry industry basedon imported maize. (See para 83).

58. The nutritional arguments indicate that investment in livestockproduction should be treated as a means of creating incomes and employmentfor those involved in production, and of increasing the quality of life ofthose relatively high income consumers able to purchase the output. Itshould not be justified as reducing the 'protein gap' or as solving thenutritional problems of the urban population.

Supply and Demand for Livestock Products

59. Accepting this limited role for marketed meat supplies, it isuseful to assess the present and projected supply and demand for differentmeat types (see Appendix 2). The meat supply situation has changed sharplysince early 1975 when Ghana ceased to import beef on-the-hoof from UpperVolta. Until that year, about 50 percent of all meat consumed was imported,of which about half was in carcass form and half live. A comparison of thesituation in 1974/75 and 1975/76 is given below:

ANNEX IIIPage 20

Table 10: MEAT SUPPLY, 1974/75 AND 1975/76

1974/75 1975/76Tons Market Share Tons Market Share

Beef 15,400 50.6% 11,000 39.2%Mutton & Lamb 2,074 6.8% 2,174 7.7%Goats 1,632 5.4% 1,729 6.6%Pigs 4,135 13.6% 4,292 15.3%Chickens 7,200 23.6% 8,800 31.2%

Total 30,441 100.0% 28,000 100.0%

Source: Appendix 2, Tables 1-4.

The most significant factors are the slight fall in total consumption, inspite of a rapidly growing urban population, and the substitution of chickenfor beef. The fall in beef supplies to 11,000 tons in 1975/76 reduced beefsupplies to the same level as in 1965/66, and reduced the contribution ofimports to total supplies to about 20 percent.

60. The demand projections for 1980 and 1985 are based on assumptionsdetailed in para 8 of Appendix 3. These imply a total demand for all typesof meat of 47,000 tons in 1980 and 61,000 in 1985. The incremental demandof 19,000 and 33,000 tons respectively could theoretically be met from arapid increase in poultry production. However, for the purpose of thisanalysis, it is assumed that both imports and poultry production remainstatic, constrained by foreign exchange and maize supplies respectively,but that domestic supplies of goat, sheep and pig meat continue to growat the rate experienced over the past decade. On this basis, there will bea 'deficit' of about 17,000 tons in 1980 and 29,000 tons in 1985. Thisimplies annual urban consumption per head would fall from the currentestimate of 8.7 kg to 5.5 kg in 1980 and 4.7 in 1985 and consumption ofanimal protein derived from meat products would fall from about 4.7 gramsper day to about 2.6 grams.

Prices

61. Prices of all animal products have increased as fast, or fasterthan the retail price index over the last two to three years. The indexof consumer food prices increased by 180 percent over the period 1972-75,and this rate has accelerated in 1976 and 1977. Relevant prices prevailingin October 1976 at farmgate, wholesale and retail levels are summarizedbelow:

ANNEX IIIPage 21

Table 11: PRICES OF MEAT PRODUCTS (OCTOBER 1976)

Farmgate Wholesale RetailCommodity Unit Price Price Margin Price Margin

Eggs Doz 2.35 2.50 6% 2.70 8%Sheep Meat Kg cdw 6.40 _I - 7.00 10%Beef Kg cdw 2.60 3.00 15% 3.50 15%Pig Meat Kg cdw 3.10 3.30 6% 3.80 15%Chicken Meat Kg cdw 4.70 5.00 6% 5.75 15%

62. The rate of increase in the price level in early 1977 is indicatedby the following comparison of retial prices in October 1976 and February 1977:

Table 12: CHANGE IN MEAT PRICES, OCTOBER 1976 TO FEBRUARY 1977

Annual RateItem Unit October 1976 February 1977 % Change of Change

Eggs Doz 2.70 3.60 33% 100%Beef Kg cdw 3.50 4.50 29% 87%Pig Meat Kg cdw 3.80 3.96 4% 12%ChickenMeat Kg cdw 5.75 8.90 55% 165%

These rates of increase are rather higher than for the retail price levelas a whole. The rates for eggs and poultry meat are also higher than theincrease in the price of maize which was about 25 percent over the Octoberto February period, and it may be assumed that producers and retailers wereusing the rate of inflation to take a wider profit margin. Any reduction inthese rates of price change will be dependent on action to reduce the rateof inflation taken throughout the economy, and in the meantime it may beassumed that they will continue at a comparable rate.

LIVESTOCK SECTOR INSTITUTIONS

Ministry of Agriculture

63. Department of Veterinary Services. The Department employs a largestaff to conduct:

(i) mass vaccination against epidemic and endemic diseases;

(ii) mass dipping, spraying and deworming against internal andexternal parasites;

ANNEX IIIPage 22

(iii) the diagnosis and treatment of all animal diseases;

(iv) the control and movement of livestock within Ghana; and

(v) the inspection of animals and carcasses.

The Department's principal diagnostic facilities are at Pong Tamale in theNorthern Region and Accra. A larger and better equipped laboratory is beingestablished in Kumasi and one is planned for Takoradi. At present, theDepartment employes over 1,000 staff, including 60 veterinarians with degrees,250 trained diploma holding assistants and 400 field assistants.

64. The training of professional level staff takes place in Europe,USA and the University of Ahmadu Bello at Zaria, Nigeria. About four degreeholders are returning annually for work in the Department, which is as manyas can be absorbed. Technical officers are trained both at a three-yearcourse at Pong Tamale, with an annual output of thirty, and a two-yeardiploma course at Legon. Technical Assistants are trained on a six-weekcourse at the Veterinary College at Pong Tamale. These training facilitiesappear to be adequate and the Department at present possess the skillsrequired to maintain an adequate animal disease control regime in Ghana.

65. The problems faced by the Department stem from Ghana's presentimport permit system which adversely affects the availability of drugs, vehi-cles and other inputs. In 1975, when a claim was made for import permitstotalling 2.5 million cedis only I million cedis worth were provided. TheDepartment provides its services free except for poultry and trypanosomiasisvaccinations. This policy is being reviewed and charges may be introducedfor the use of drugs or vaccines.

66. Department of Animal Husbandry. The Animal Husbandry Departmenthas the following official objectives:

(i) the breeding and improvement of genetic stock of livestockand poultry;

(ii) coordinating programs for the supply to farmers at reasonableprices from the Department's own facilities of superiorstocks of livestock and poultry;

(iii) the importation of semen of superior breeding stock forartificial insemination;

(iv) stimulating the widespread development of poultry and smallanimals as a more effective strategy for increasing theamount of animal protein available to consumers; and

(v) improving the feeding of livestock in the dry season andorganizing the production of mixed feeds.

ANNEX IIIPage 23

It is significant that 'extension' advice is not amongst these officialobjectives. The Department operates a total of 32 livestock production unitsspread throughout the country, which are a mixture of cattle, sneep and pig

enterprises. In addition to these production units, the Department maintainsa cadre of extension staff in the field whose main function is the provisionof extension advice to farmers. This service is inadequately staffed. Myfany

are incompetent and their work is hampered by shortage of transport. TheDepartment's headquarters staff in Accra is probably amongst the poorest in

West Africa, typified by inefficiency, low morale, and absenteeism (which is

not due to farm visits as hardly any of the Departments farms are visitedby headquarters staff). Information on the Department's work is difficult

to obtain, and no annual report has been published since 1972/73.

67. The Department has a professional staff of 220 and a supportingstaff of between 400 and 500, although the exact figures are not available

at headquarters. Amongst the professional staff, 72 have a BSc or higherqualification. Training of all Animal Husbandry staff takes place within

Ghana at the degree, diploma and technical assistant levels, though a largenumber of graduates have received further training abroad, mainly in the UK,USA, Canada and Australia. Unfortunately, many have Lransferred temperateclimate technology to Ghanaian conditions with poor results. Degree leveltraining takes place at Legon University near Accra and at Lhe Universityof Science and Technology (UST) at Kumasi. The yearly output from each ofthe Faculties of Agriculture in Legon and UST is about 50 of which 10 are

in Animal Science. This is sufficient to meet the Department's presentrequirements.

68. Both universities also give a two-year diploma course for TechnicalAssistants for officers who have been working in the field for at least threeyears. The Legon University is also active in training field staff under a

program, supported by CIDA, which has carried out 40 courses in the last twoyears. Lower level training takes place at the Ministry of Agriculture'sthree agricultural colleges of Kwadaso, Ohawu and Nyankpala, where TechnicalOfficers receive a three-year training in general agriculture of which thethird is in the field. The total output of these colleges in 1976 was 236students of which 153 went to the Ministry of Agriculture and only 11 to theDepartment of Animal Husbandry.

Research

69. Animal research is conducted at three centers: Legon University,UST at Ku-masi, and the Animal Research Institute at Achimota near Accra.The Departments of Animal Husbandry and Veterinary Services also carry outlimited research. For a number of years, valuable work has been done andresults published but the dissemination of these results has not beeneffective and has had little impact on the development of the livestockindustry. It is essential that a feed back system is developed if the

investment in research is to be justified. Further, more of the work shouldbe conducted at a regional level in order to take account of local conditions.

ANNEX IIIPage 24

70. Legon University's livestock research program takes place at Nunguanea- Accra and its work program extends to beef and dairy cattle, sheep,goats, pigs and poultry. The station has a herd of 400 beef cattle, 50 dairycac.Ile 300 sheep, 200 goats, 200 pigs and 7,000 birds. The dairy unit hasbeen working on the evaluation of the performance of Jerseys crossed withN'dama, Sokota Gudali, and West African shorthorn for testing milk yields andthe duration of lactation, etc. Experiments have also included the use ofsun dried cassava peels as a supplementary sheep feed, the replacement ofmaize by cassava in pig rations, the supplementary feeding of roasted cocoabean shells, wheat bran and dried brewers' spent malt to lambs. Work hasalso been conducted on helminth parasites in sheep and goats. The work onthe station has come to emphasize the training of extension staff and farmers,and in the last two years, the University's Department of Agriculture Exten-sion has conducted 40 short courses at the Nungua Farm.

71. UST at Kumasi has a faculty farm of 300 acres which is used forboth research and demonstration to students and local farmers. A dairy farmwith 40 imported Canadian Frisian cattle has been established as part of theUniversity Farm. The cattle are kept in a confined environment, stall feedingwith green fodder and concentrates. The project is mainly financed by CIDAwhich has also supplied technical assistance in the form of two expatriates.

72. The Animal Research Institute at Achimota was founded in 1964; Thefacilities for practical research work are not adequate. However, the Insti-tute has turned out a number of scientific publications, for example, onpoultry production (egg laying tests and broiler mashes), on pig and ruminantproduction, and animal diseases. The latter includes some work on tsetseresearch (laboratory colonization of Glossina Tachinoides). The researchwork is conducted at the Institute's farm at Achimota and at Pokoase andNyakpala stations. At present, there are 12 research workers and 5 technicalstaff.

Finance for Livestock Production

73. Each of the six commercial banks in Ghana provides some credit forlivestock development as part of their agricultural sector lending program.Aggregate loans to agriculture are, however, not as high as the banks them-selves would like to make as a result of both the security problems associatedwith lending to small-scale agriculture, and of the lack of large-scale proj-ects with detailed feasibility studies and reliable management. Livestockloans are considered particularly risk-prone as part of the credit requirementis medium or long term and security cannot be achieved through control of themarketed output.

ANNEX IIIPage 25

Table 13: INSTITUTIONAL CREDIT TO LIVESTOCK SECTOR (1975)

Total Agricultural Livestock asLoans Livestock Loans % of Total

------------million cedis------------

Bank

Agricultural DevelopmentBank 21.04 0.83 3.9%

National Investment Bank 8.20 0.42 5.1%Standard Bank 8.10 0.03 0.4%Barclays Bank 7.67 0.27 3.5%Ghana Commercial Bank 17.49 1.14 6.5%Cooperative Bank 0.77 0.02 2.6%

Total 63.27 2.71 4.9%

74. Although a detailed breakdown of the types of livestock productionsupported by each bank is not available, ADB's figures suggest that abouttwo-thirds of the total investment is concentrated in poultry production.These loans are in theory secured by a lien over the growers' assets but onlyrarely have poultry units been repossessed and managed on behalf of the banks.Repayment rates for poultry loans made by ADB in Ashanti Region are between 60percent and 70 percent. ADB also finances some poultry product marketingassociations and for instance in Kumasi has made a three-year loan to an 'EggMarketing Association' of women traders. It also regularly makes seasonalloans to individual traders.

75. Supervision of the banks' existing livestock portfolio is notadequate, and coordination on supporting services between the banks and theDepartments of Animal Husbandry and Veterinary Services is negligible. WhilstADB would like its professional staff to visit producers once per month, inpractice, the frequency is closer to once every six months.

76. Bank of Ghana Agricultural Development Fund. The Government hasfor some time been concerned at the current contradictory situation wherebythe commercial banks have funds on deposit for which they cannot find asatisfactory outlet but the supply of loan finance to agricultural projectsis inadequate. The Bank of Ghana has, therefore, established an AgriculturalFund, on the pattern of the 'Fondo' of the Mexican Central Bank, which takesdeposits from the commercial banks, offers a fixed rate of interest, and aguaranteed repayment at the end of a specified term, and invests the fundsin productive projects. This Fund was first established in January 1977 andnow has a total of ¢ 30 million on deposit for which it is attempting toidentify projects. The Bank of Ghana expects that livestock will constitute

ANNEX IIIPage 26

an important part of the Fund's operations, and has already hired the con-sulting firm on Gunn Rural Ltd. to identify possible sheep and beef projectsLL Lhe norLLil of Ghana.

7orld Bank Credit to Ghana Livestock Company. Credit 500-GH wasthe first World Bank Group lending to Ghana's livestock sector. The creditwas signed in July 1974 and became effective in May 1975. The project hassuffered from inanagement and financial problems and in May 1976, was revisedand reduced in scope. The credit is channelled to the Ghana Livestock Companyand, as revised, is limited to development of two commercial ranches (Branamand Tadzewu), the promotion through provision of credit of 20 private ranches,a training component and provision for a Phase II Livestock Development Proj-ect. Total project costs are estimated at US$3.6 million of which US$2.0million is IDA credit. The project has not yet indicated lines for futurenational livestock development. Development of the large-scale ranches isjust commencing; private cattle owners have not yet been identified. Breedingstock for the GLC ranches are being obtained from Upper Volta and Senegal;fattening stock have been obtained from Upper Volta but the satisfactorydealings in trade stock which are bought at approximately 0 0.40 per lbliveweight and sold for 0 1.00 per lb liveweight reflect profit taking onforeign exchange availability rather than fattening as such.

DEVELOPMENT PROJECTS AND POLICIES

Government Policy Under the Five-Year Plan

78. The current Five-Year Plan extends from 1975-80 and will not bepublished until early 1977; its contents were finalized only in late 1976.The livestock component envisages as massive increase in the production ofall types of meat including a tripling of the national beef herd, and theproduction of 30 million broilers per year (an increase of 15 times thepresent level requiring an additional 75,000 tons of maize). Its targetsare, therefore, technically nonsense, and it must be regarded essentiallyas a public relations document designed to dispel public alarm at thefalling levels of meat supply.

79. However, the Plan's capital expenditure provisions will remainthe basis for the annual budget estimates until and unless it is officiallychanged. Its major capital development items include:

(i) a grand-parent poultry farm, designed to produce parentstock for hatcheries in Ghana and in other parts of WestAfrica;

(ii) a 'pre-mix' plant designed to manufacture the premixcurrently imported from Europe and used by local feedmills;

(iii) a 1,200 cow dairy project under controlled environmentdesigned to produce 2.5 million litres per year of UHT milkfor urban markets; and

ANNEX IIIPage 27

(iv) the importation of several hundred head of beef breedingstock from Brazil for use on MOA breeding stations.

Reliable feasibility studies for these projects do not exist. RouDh budgetshave been prepared by the European suppliers for the grand-parent poultryfarm (UK6 500,000) and the 1,200 cow dairy unit (US$15.0 million), but thesedo not provide an adequate assessment of capital or recurrent costs, andconsequently of a cash flow expectation.

80. The responsibility for the management of these projects and themethod of financing them has not been decided, but it is clear that anyequity contribution from the suppliers will be taken. Although it shouldnot be assumed that foreign exchange will be made available by the Bank ofGhana for these projects when required, it is clearly the case that theimplementation of two or three of the projects will preempt the availabilityof finance for more soundly based projects.

Livestock Development Outside the Ministry of Agriculture

81. Partly in reaction to the Ministry's lack of effective activity,several other agencies are considering or actually developing investments inlivestock production. The more significant of these are summarized below:

(i) Bank of Ghana. The Bank has recently commissioned theconsultants Gunn Rural Ltd. to identify investmentpossibilities in beef, and sheep in the Northern andUpper Regions, and expects to finance these in 1977 or1978.

(ii) Agricultural Development Bank. The Bank has alreadyfinanced development of the Tongu Ranch in Volta Regionand will probably finance a similar ranch at Wenchi in1977/78.

(iii) Regional Development Corporation. Several of these, withfinance from the commercial banks, have on-going or plannedbeef, sheep and poultry projects.

(iv) Darko Farms Ltd. will expand its parent flock at Kumasifrom about 11,000 to about 30,000; construct a feedmill with a capacity of four tons per hour; and estab-lish an irrigated maize farm at Atebubu to supply thefeed mill.

(v) National Investment Bank will finance the Quality MeatCompany at Tema as a pork processing unit and will linkthis to direct production of pigs at a farm it now ownsin the area.

ANNEX IIIPage 28

(vi) UST, Kumasi will develop its own commercial hatcheryto supply additional day old chicks to growers in theKumasi area.

Whilst these projects may all face important managerial and cash flow prob-lems, it is certain that they will be implemented in part in the next two tothree years.

Coordination of Livestock Policy

82. The haphazard nature of these projects indicates that a livestockdevelopment strategy cannot be said to exist in Ghana. There is, however,general agreement amongst all investing agencies, including the Ministry ofAgriculture itself, that coordination is required. It has not been achievedto date owing to: (a) disagreement over the form it should take; and (b) theinability of the Ministry of Agriculture to implement policy of which itnominally approves. The previous Commissioner for Agriculture proposed inlate 1976 that a 'Livestock Development Commission' should be establishedwhich would fulfill the function of monitoring on-going livestock projects,proposing new ones, and acting as the initiative taker in matching foreignand local manpower and finance to new projects. It would not, however,either manage projects itself, or act as a holding company for other companies.It would be expected to work closely with the livestock section of the Bankof Ghana's Agricultural Fund and to propose projects for finance to it. Itwas built into the proposed UNDP/FAO Meat Development Project, and its possi-ble role is indicated in Chart 2 to this report. It is essential that avehicle of this kind is developed and the proposed commission could fulfillthe function. It remains to be seen if it will continue to be supported bythe new Commissioner and is approved by the Supreme Military Council.

Development Policy Options

83. The basic development policy choices which would confront sucha coordinating agency are determined by a number of critical variablesincluding (i) the supply of beef and sheep breeding stock; (ii) the avail-ability of management expertise; (iii) the availability of maize and otherfeed ingredients either from domestic or imported sources; and (iv) theavailability of veterinary drugs. Different assumptions about these factorsand about their interaction suggest that the principal policy alternativesfall into four main categories which are identified below:

(i) No meat development program. Recognizing the priorityobjective of increasing food supplies, incremental invest-ment in meat production would be suspended for two to threeyears; imports of carcass meat and existing domestic live-stock production would be maintained at current levels ofoutput; the fall in per capita meat consumption would beaccepted since its implication on human nutrition would notbe serious. (See Appendix 3). The policy would be reviewedin two years time.

ANNEX IIIPage 29

(ii) Meat development program with no poultry component. Inorder to avoid placing pressure on maize supplies, nofurther investment would be made in poultry production, andexisti.g hatchery production would be cut back; meat importswould be maintained at present levels; further investmentwould be made in beef, sheep, rabbit and pig production(in the latter case feeding minimal maize).

(iii) Meat development program, including poultry with importedmaize substituted for imported meat carcasses. In order tofoster the employment and income generating effects of anexpanding domestic poultry industry, its requirement formaize would for as long as necessary be imported as a sub-stitute for the red carcass meat which increased poultryproduction would replace. In this way, the total importbill on the meat account would be contained at approximatelycurrent levels. The complete replacement of imported beefand sheep meat (1,500 tons in 1974) by broiler meat pro-duced from imported maize would be feasible. It wouldreduce the foreign exchange component of each ton of meatby roughly ten times (from 40 percent to 4 percent). Inparallel with this policy investment in other types of meatproduction would be made as in (ii).

(iv) Meat development program including poultry with short-termmaize imports only. An optimistic view would be taken ofthe 'underlying' maize supply situation, 1970 and 1974output levels of 480,000 tons taken as a 'norm' and thechannelling of 50,000 tons per year of energy food intothe feed sector accepted as a product of income distri-bution. Maize imports would be accepted as a short-termnecessity for 1976/77 only. Investment in other types ofmeat production would continue as in (ii).

Whilst each of the main policy choices is capable of adaptation and adjust-ment the available decision patterns fall into one of the four categoriesidentified above.

FAO/UNDP Meat Development Project

84. In late 1976, a fairly large-scale 'Meat Development Project'was prepared by the FAO/UNDP Agricultural Planning Project attached to theMinistry of Agriculture in Accra. This proposed a total investment of aboutd 30.0 million (30 percent foreign exchange) which would be concentrated onthe development of a 'core group' of small-scale and large-scale poultry,pig and sheep producers who would constitute an efficient nucleus to therest of the industry. The project would finance supporting services to thisgroup by re-equipping the hatchery and feedmill of Pomadze Poultry Enter-prises and providing an 'integrated' input supply and marketing service.

ANNEX IIIPage 30

It would also finance the development of parastatal broiler production(500,000 bird per year unit), layer production and sheep production (four1,000 ha ranches).

85. The project was premised on the two assumptions that: (a) existinginvestment in beef production (e.g., by GLC, the Bank of Ghana and ADB)should prove its commercial viability before additional funds were channelledinto beef; and (b) that the only means to a short-term increase in the supplyof marketed meat to the urban population was through a rapid expansion ofpoultry and pig production. It proposed that the latter would be bestachieved by the reorganization of the existing servicing industry (the divi-sion of Pomadze and the creation of new input distribution service), andsuggested that the 'underlying' rate of growth of maize supplies from 1971to 1974 (5 percent per year) made it likely that sufficient maize would beavailable to supply feed to the industry when production recovered from thetwo bad harvest years of 1975 and 1976. The actual very low ouput from the1976 maize harvest (probably about 300,000 tons) made the latter assumptionappear optimistic by early 1977, and it has become clear that the only basison which the project could be developed in the next two years would be thatof imported maize. It, therefore, fits into policy Category 3 identifiedabove. However, it is more likely that it will be appropriate to considerfinancing a project of this kind after at least two years of maize productionhave indicated whether 1974 levels of production are likely to recur.

Recommended Bank Policy

86. The policy options confronting the Bank are also defined by thechoices identified in para 83. The 'early development' stage of investmentin GLC suggests that additional investment in beef production should bedependent upon the satisfactory commercial development of these ranches.However, private cattle owners who are credit worthy can be identified andsupport would best be channelled through regional development projects.The possibility of developing a poultry, pig, and sheep production project,along the lines proposed by the UNDP/FAO Feasibility Study and in parallelto the existing beef project should be delayed until domestic maize pro-duction is satisfactory, unless recourse is made to imported maize. Ifthis is done with a compensatory reduction in carcass meat imports such aproject could save foreign exchange and create incomes and employment.However, given the probability that this compensatory reduction wouldprobably be unacceptable to Government or impractical even if agreed inprinciple, it would probably be wiser to delay further investment in theGhanaian livestock sector for at least two years.

DISTRIBUT1ON OF LIVES'I'OCK BY DISTRICT AND

CLASS OF S'T'OCK

Section Bulls Young Herd

(Regfon) Bulls Bulls Bullocks Cows Heifers Calves Total HIorses Donkeys Sheep Coats Swnine Dogs Cats Poultry

N.E.V.S. 4,916 8,103 9,772 25,735 12,608 11,287 72,412 1,146 2,065 40,900 33,673 7,656 6,129 2,597 64,097N.C.V.S. 7,841 11,095 10,686 33,517 18,732 14,651 96,704 514 5,139 116,603 92,385 8,089 15,109 4,361 254,773N,W.V.S. 5,107 13,982 4,525 61,989 31,711 21,933 139,247 90 83 94,271 103,866 17,520 12,139 2,943 217,889

Upper Reglon 17,864 33,180 25,165 121,241 63,051 47,862 308,363 1,760 7,287 251,774 229,924 33,265 33,377 9,901 536,759

E.D.N.V.S. u.a n.a U.S n.a n.a U.S 94,736 218 29 46,526 39,187 8,942 7,590 2,641 110,192

W.D.N.V.S. 4,419 11,175 6,684 49,024 18,077 23,870 113,249 833 824 73,376 71,343 12,847 8,244 6,571 292,132C.V.S. 54,929 49 4 61,195 56,349 8,132 14,533 3,576 126,664

Northetn Region n,a. n.a, n.s. n.a. n,a. n.a. 262,914 1,096 857 181,097 166,879 29,921 30,367 12,788 528,988

B.A.V.S. 776 1,804 667 8,912 2,914 3,321 18,394 43 - 80,035 56,510 10,131 13,454 4,775 387,799

A.V.S. 275 404 251 1,540 717 737 3,924 77 - 81,308 49,346 5,951 13,956 6,106 661,178E.R.V.S. 505 2,565 1,854 10,402 5,140 4,110 24,576 - - 45,415 44,553 4,947 12,204 3,588 258,847C.V.S. 957 4,210 2,680 17,964 10,681 8,902 45,394 380 61 15,127 10,215 5,636 4,955 591 901,641V.R.V.S. 1,457 6,062 4,469 35,905 13,747 13,215 74,855 . - 76,403 62,165 15,678 11,888 9,210 282,384C,.R.V.S, 84 589 98 1,581 682 668 3,702 - - 106,778 102,209 15,923 10,362 8,804 461,267W.R.V.S. 102 231 130 1,154 438 425 2,480 - - 64,299 22,313 3,042 9 555 4,884 206,386

National Grand

Total n.a. U.S. n.a. n.a. U.S. .. a. 744,602 3,346 8,205 902,236 744,114 124,494 140,118 60,647 4,225,249

Source: Department of Veterinary Services, 1974 Census.

(D troe

I.-

STRUCTURE OF UPPER REGION

BEEF CATTLE HIERD 1969-74

% of % of % of % of % of % ofBulls Total Young Biulls Total Bullocks Totzi Cows Total lleifers Total Calves Total Total

1969 15,864 5.8 31,240 11.4 21,752 7.9 107,003 38.8 53,883 19.6 45,978 16.7 275,540

1970 13,585 5.3 30,106 11.7 17,647 6.9 101,112 39.3 53,196 20.7 41,773 16.3 257,419

1971 14,035 5.3 30,048 11.3 19,188 7.2 103,918 38.9 56,930 21.3 42,983 i6.1 267,101

1972 12,689 4.6 29,575 10.7 18,129 6.6 107,981 39.3 58,046 21.1 48,683 17.1 275,103

1973 n.B n.a n.a n.a. n.a n.a. n.a n.a. n.a n.a. n.a n.a. n.a

1974 17,864 5.8 33,180 10.7 25,165 8.2 121,241 39.3 63,051 20.4 47,862 15.5 308,363

Annual Rateof Growth

1969-74 2.4% 1.2% 3.0% 2.5% 3.2% 0.8% 2.3%

Source: Department of Veterinary Services Annual Census 1973. 1973 figures exclude one district and, therefore, have not been included here.

CD

F,

APPENDIX 1Table 3

ANIMAL HUSBANDRY DEPARTMENT STATIONS

BeefRegion Station Dairy Cattle Sheep Pigs Poultry

Brong Ahafo Wenchi )Atebubu /Kintampo /Prang /

North Pong Tamale / I I

Dabaya /Bimbila /Damango /

Upper Babile /WaBusa /Doba /Basoa /

Greater Accra Amrahia / /Nungua / / /Maledjor /

Eastern Forifori /Okwenya /Nkwakebew /Kwahu Ridge / /

Volta Amelorkope /Adidome /Adakpo /Vakpo /Nkwanta /

Central Winneba /Pershie /

Western Anyinese /Pershie /

Ashanti Ejura /Drobonso /

APPENDIX 1

Table 4

COST OF IMPORTED RECONSTITUTED MILK

Purchase, Production and Overhead Costfor 1,000 Litres

Unit Price No, Cost

(US$) (US$)

A. Milk Inputs 1/

Milk Fat kg. 0.85 30 25.5

Skim Milk Powder +Butter Oil kg 0.40 90 36.0

B. Recurrent Costs 2/

Operating Costs litre 0.20 1,000 20.0

Amortization ofInvestment litre 0.02 1,000 20.0

TOTAL (A+B) litre n.a. 1,000 100.0

'Breakeven' sale price is US¢10 per litre

1/ Product is 9% skimmed milk powder and 3% milk fat. Early 1976 prices.

2/ Based experience of CPS staff.

APPENDIX 2Page 1

SUPPLY AND DEMAND FOR ALL MEAT TYPES

Size and Composition of the Market

1. This analysis assumes that rural consumption of meat is mainlyderived from on-farm slaughter of small stock and poultry which is unrecorded.It therefore, concerns itself with supplies to the market (defined as theurban population) for which cash payments are made. Its definition of urbanfollows that of the Government of Ghana census and includes small towns.The relative importance of the two sources of meat is indicated in Chart 1.

2. The market for meat products is a small proportion of the marketfor all animal protein products since the total fish catch marketed for cashexceeds 300,000 tons per year, 1/ whereas total meat supplies are about30,000 tons (see para 5 below). The supply of game meat marketed for cashhas also been placed as high as 30,000 tons. 2/ Relatively small fluctuationin the combined supply of fish and game meat could, therefore, theoraticallyaccount for "deficits" in the supply of other meat types of the order of20,000 to 30,000 tons. However, in practice higher income groups in Ghanaare not prepared to substitute fish and game for beef, sheep and chicken andit is therefore useful to assess the present and projected supply and demandfor these meats. It should be noted that the maintenance or increase inthe supply of these meats will free fish and game meat supplies for con-sumption by lower income groups.

3. Table 1 to this appendix provides a detailed breakdown of thelocal movement of stock, recorded slaughter, and live and carcass imports byhead and by weight over the period 1965-75. Table 2 provides a breakdown ofimports by value. The local movement and slaughter figures are those ofthe Veterinary Department; the importation figures are those of the CustomsDepartment. The figures are least reliable for beef and poultry. In thecase of beef, the figures shown for local movement and live imports shouldbear a closer relationship to the figure for total slaughter, since nearlyall live imports are of slaughter stock. However, there is in practice adiscrepancy of up to 15 percent and it is not possible to determine accuratelywhat proportion of beef consumed has been imported. It will be necessaryto make a guesstimate of this figure.

4. In the case of poultry production, estimates are also difficultin view of the problem of assessing the size of the village flock. How-ever, the figure of eight million birds suggested as "most likely" has

1/ 1974: Imports: 86,974 tonsLocal: 226,947 tonsTotal 313,823 tons

2/ FAO Project Country Perspective Study (Draft) Rome 1976.

APPENDIX 2Page 2

been used here. Estimates of output from the "commercial" sector have tobe made from day old chick production figures and a certain level of mor-tality between production and sale to the market assumed. These assumptionshave been made in the figures for total meat supplies shown in Table 3 butthey remain "quesstimates". It is also necessary to assume a certain levelof "unrecorded" slaughter for urban markets by peri-urban butchers and thishas been placed at 10 percent for beef, and 15 percent for sheep and goats.

5. The following figures summarize the market shares of the differentmeat types, including imported meat, in 1974 and their relative rate ofgrowth over the period 1967/68 to 1973/74:

Table 1: MEAT SUPPLY (1974) AND RATE OF GROWTH

1974 1967/68-1973/74tons Market share Rate of Growth

(%) (%)

Beef 15,400 50.6 5.0Mutton and lamb 2,074 6.8 -6.5Goats 1,632 5.4 3.9Pigs 4,135 13.6 2.5Chicken 7,200 23.6 n.a.

Total 30,441 100.0

The rate of growth of mutton and lamb is distorted by the fact that importsfell significantly over the period. Domestic supplies in fact increased byabout 3.8 percent during this time. It is also not possible to assess accu-rately the rate of growth of chicken supplies since there are no reliablebaseline data for 1967/68.

6. The picture suggested by these figures has changed considerablysince 1975, since imports of meat from Upper Volta were suspended in Marchof that year, when the Cattle Development Board stopped buying. The effectof this is shown in Table 4, which summarizes estimated 1975/76 supply anddemand and projects the market to 1980 and 1985. The figures indicate thattotal beef supplies (i.e., imported carcass meat and domestic supplies) wereroughly the same in 1965/66 as in 1975/76, at about 11,000 tons. As a resultof the suspension of live beef cattle imports total imports of all meat typesaccounted for only about 18 percent of total consumption in 1975/76 The "TotalDemand for Marketed Meat" is shown as 34,000 tons, and includes the 6,000tons/year average imports which ceased in 1975. The current "deficit" istherefore shown as 6,000 tons.

The Future Level of Demand for All Meat

7. The projections to 1980 and 1985 assume on the supply side that:(i) beef imports from Upper Volta will not resume; (ii) that the presentlevel of imports of all types of carcass and processed meat will bemaintained at a static level; (iii) that domestic supplies of goat,

APPENDIX 2Page 3

sheep and pig meat will grow at the rate experienced over the previouseight years; and (iv) that chicken production will remain static. On thedemand side, the figures assume that: (i) the urban population is grow-ing at 4.8 percent per year 17; (ii) consumption expenditure per head isgrowing at 1 perzent per year 2/; (iii) that the expenditure elasticity of theurban population in relation to meat products is 1.5 3/. These demand assump-tions indicate an increase in demand for meat products of 6.3 percent peryear at present prices.

8. On the above assumptions the figures indicate a 'potential'deficit of 16,700 tons in 1980 and 28,700 tons in 1985. On this basis,consumption per head would fall from the current estimate of 8.7 kg to5.5 kg in 1980 and 4.7 in 1985. On the other hand, if chicken supplieswere projected to grow at the rate of 20 percent per year 4/, the 1985"deficit" would become a surplus of 12,500 tons, and effectively prices wouldbe reduced and consumption per head increased. This rate of growth is,however, very unlikely to be achieved both because it would imply a marketshare for chicken meat of over 60 percent, and because of severe feed supplylimitations. The net position is more likely to be one of increasing pressureon limited supplies, and of an increasing deficit.

1/ 1960-70 population census.2/ Current five-year plan estimate.3/ Current five-year plan estimate.4/ Equivalent to rate of growth of day old chick production,

1970-75.

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IMPORTS OF MEAT 1965-75

BREAKDOWN BY VALUE, PRICE AND TYPE

BEEF AND VEAL SHEEP AND LAME MUTTON AND LAMB GOATS AND KIDS POULTRY

Live Animals Chilled or Frozen Dried or Salted Live Animals Chilled or Frozen Live Animals Live Animals Chilled or Frozen

Year No. Head Value No. Tons Value No. Tons Value No. Head Value No. Tons Value No. Head Value No. Head Value No. Tons Value

1965 56,398 5,317,405 306 253,911 125 72,516 19,646 235,881 1,353 528,441 30,027 359,950 458,250 220,479 1,052 511,310

1966 n.a. n.a. nua. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

1967 62,395 5,239,912 326 235,352 616 333,699 23,793 280,590 1,513 491,804 30,565 319,942 307,652 203,666 282 129,134

1968 47,665 5,431,237 134 157,832 591 340,645 16,265 232,476 1,739 642,734 31,577 452,669 265,724 183,140 173 95,013

1969 66,891 7,640,191 187 187,250 587 328,700 19,325 275,767 2,100 766,648 31,984 454,823 136,413 124,661 149 81,950

1970 61,882 6,943,344 271 275,616 502 295,256 10,904 154,936 3,004 1,131,052 29,398 421,707 57,520 57,870 526 238,133

1971 55,713 5,342,108 117 127,653 674 512,771 15,621 213,191 1,937 818,785 30,440 415,251 119,505 161,203 333 176,240

1972 37,014 4,571,980 74 97,307 101 121,967 6,371 78,409 645 411,930 8,103 115,570 87,866 206,612 89 77,070

1973 33,721 4,839,017 11 33,396 282 445,246 8,118 148,540 456 400,456 13,627 232,020 134,888 194,652 21 19,974

1974 47,326 8,677,416 69 136,149 708 974,217 10,784 208,967 807 923,459 15,981 236,806 155,895 147,770 273 250,619

PIG MEAT OTHER MaAT TOTAL MEATSausages and

Chilled or Frozen Bacon Ham Dried Salted Pork Corned Beef Percentage Composition

No. Tons Value No. Tons Value No. Tons Value No. Tons Value No. Tons Value Value Beef Sheep Goats Poultry Pork °Z Other Meat 7.

8 ¢ 8 8 e e % % % %

1965 33 22,050 39 45,006 19 30,583 67 12,480 3,753 3,961,561 11,571,579 48.77 6.60 3.11 6.32 0.10 35.10

1966 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

1967 8 6,828 23 26,914 38 52,254 852 172,308 Z,925 2,003,084 9,495,487 61.17 8.13 3.36 3,50 2.72 21.12

1968 51 28,154 5 9,007 16 27,304 1,727 451,678 1,160 905,568 8,957,457 66.19 9.77 5.05 3.10 5.76 10.13

1969 11 8,477 5 7,334 11 20,831 1,444 311,805 2,107 1,586,081 11,794,518 69.15 8.83 3.85 1.75 2.95 13.47

1970 47 19,783 35 31,564 7 16,508 1,793 468,252 2,910 583,428 10,637,449 70.63 12.08 3.96 2.78 5.03 5.52

1971 2 3,856 15 20,308 16 34,426 1,297 378,777 2,159 1,468,381 5,672,950 61.84 10.66 4.29 3.48 4.52 15.21

1972 11 6,488 2 4,587 4 10,098 432 188,791 1,236 1,742,299 7,633,108 62.76 6.42 1.51 3.71 2.75 22.85

1973 28 17,043 2 6,285 6 17,005 1,257 680,397 497 733,295 7,767,326 68.46 7.06 2.98 2.76 9.27 9.47

1974 1 3,907 9 27,026 22 54,043 1,925 1,425,553 1,994 3,654,076 16,483,802 59.36 6.86 1.43 2.41 9.16 20.78

HF-

MARKETED SUPPLIES OF ALL MEAT TYPES - 1967-74 1/

(t)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)Carcass

Carcass Imports CarcassMutton and Imports as % of Total Total Imports Total Total Meat

Beef Lamb Goats Pips Total (1) - (5) Total Poultry (5) + (8) as % of (9) Fish 2/ and Fish

1. MARKETED SUPPLIES INCLUDINGIMPORTS IN CARCASS FROM

1967 10,851 2,426 1,261 2,723 17,261 6,301 36% - - - -

1968 11,035 2,801 1,389 4,201 19,426 5,423 28% - - - - -

1969 11,800 3,264 1,272 3,812 20,148 6,452 32% - - - - -

1970 12,598 4,111 1,309 3,770 21,788 8,569 39% - - - - -

1971 13,261 3,049 1,229 3,167 20,706 6,217 30% - - - - -

1972 12,761 1,861 1,280 2,644 18,546 2,505 13% - - - - -

1973 12,720 1,760 1,562 3,727 19,769 2,589 13% - - - - -

1974 15,413 2,074 1,632 4,135 23,254 5,536 24% 7,200 3/ 30,454 18% 313,823 345,777

Percentage of total (9) in 1974 50.6% 6.8% 5.4% 13.6% - - - 23.6% 100.0=/

Rate of growth 1967/68-1973/74 +5% -6.5% 4/ +3.9% +2.5% +3.2% -7.75% - - -

2. MARKETED SUPPLIES EXCLUDING

IMPORTS IN CARCASS FROM

1967 9,909 913 1,261 1,802 13,885 - - - -

1968 10,310 1,142 1,389 2,402 15,243 - - - -

1969 11,026 1,164 1,272 2,341 15,803 - - - -

1970 11,825 1,107 1,309 1,888 16,129 - - - -

1971 12,470 1,112 1,229 1,837 16,648 - - -

1972 12,586 1,216 1,280 2,195 17,277 - - - -

1973 12,427 1,304 1,562 2,434 17,727 - - - -

1974 14,636 1,267 1,632 2,178 19,713 - - 7,200 3/ 26,913

Percentage of total (9) in 1974 54.4% 4.7% 6.1% 8.0% - - - 26.8% 100 .0%

Rate of growth 1967/68-1973/74 4.9% 3.8% 3.2% 1.5% 4.3% - - - -

Source: Table I

1/ Excludes supplies of all bush meat (which estimates have placed as high as 37,000 t) and also excludes offals which would increase total in (10) by about 10%.2/ Department of Fisheries figures including imports of 87,000 t.3/ Guesstimate based on 1975 figures shown in Table 1, reduced by 10% to account for lower coamsercial hatchery output in 1974.

H' 10

(DzH'

APPENDIX 2Table 4

CURRENT AND PROJECTED SUPPLY AND DEMAND FOR MARKETED MEAT - 1967/68-85

Actual Projected

AnnualGrowthRate

Unit 1967/68 1975/76 Z 1980 1985

1. DEMAND DETERMINATIONS

Total population 1/ '000 head 8,028.3 9,851.4 2.6 11,063.6 12,578.6Meat purchasing population 2/ '000 head 2,199.9 3,200.0 4.8 3,951.1 4,994.5Consumption expenditure perhead 3/ Index n.a. 100 n.a. 105.5 110.5Expenditure elasticity 3/ - n.a. 1.5 - 1.5 1.5

Demand Index Index - 100 6.3 139 179

2. TOTAL DEMAND FOR MARKETED MEAT t n.a. 34,000 n.a. 47,260 60,860

3. MARKETED MEAT SUPPLY 4/

Beef t 10,943 11,000 - 11,000 11,000Goats t 1,325 1,729 3.9 2,053 2,485Sheep 5/ t 2,613 2,174 (3.2) 3,873 4,531Pigs t 3,462 4,292 2.5 4,794 5,422Chicken 6/ t n.a. 8,800 - - -

Total: 1. Including chicken t n.a. 28,000 - - -2. Of which imports t 12,500 5,000 -20 5,000 5,0003. Total 1. excluding

chicken kg - 19,100 - 21,720 23,438Consumption per head l. incl.chicken kg - 8.7 - - -

2. excl.chicken kg - 6.0 - 5.5 4.7

4. NET DEFICIT/SURPLUS

(a) Excluding chickens t n.a. - - (25,500) (37,500)(b) Chicken supply constant t n.a. 6,000 - (16,700) (28,700)(c) Chicken supply increasing at

20% p.a. 7/ t n.a. - - (5,480 +12,500

1/ Derived from 1960-70 Population Census. 1960-70 trends assumed to continue.2/ Total urban population as defined by census; true rural population assumed to rely on household

produce for animal protein.3/ Projections based 'low estimate' in 'Guidelines for the Five-year Development Plan'. Ghana. January 1975.4/ Derived from Table 2, Section A. 1975/76 figures assume projection of 1974 figures at indicated rates.

1980 and 1985 projections also based indicated rates.5/ Table 2 figures indicate sheep meat supplies falling but this reflects high import content. Therefore,

total meat supply growth rate of 3.2% has been applied to sheep. Indigenous supplies have been growing at about3.8%.

6/ Reliable figures for village chicken supplies in 1967/68 do not exist, hence it is not possible to derivean annual growth rate for 1967/68-1974/75 which can be projected to 1980 and 1985. Figure shown here for1974/75 is a guesstimate including both 'commercial' chickens and village chickens (33% of total): See Table 2.

7/ Equal to rate of growth in productiqn of day old chicks from Pomadze 1969/70 - 1974/75. Base year is 1974/75.

APPENDIX 3Page 1

LIVESTOCK PRODUCTION AND NUTRITIONAL PRIORITIES

1. In both 1976 and 1977 Ghana imported maize 1/ for both human andanimal consumption, in the former case in response to near famine conditionsin Upper Region. Investment in Livestock production 2/, which in Ghanaincludes grain fed poultry and pig production, should, therefore be assessedagainst a background of a shortage of grains for human consumption. Thisannex will explore the implications of that shortage for livestock develop-ment policy.

Availability of Energy and Protein Food in Ghana

2. A comprehensive region by region survey of the national nutritionsituation was conducted in 1961/62, and its results can be cross checkedby biannual studies of specific communities conducted by the Department ofNutrition and Food Science at the University of Ghana, Legon. The latterstudies tend to confirm the general findings of the 1961/62 survey whichindicated a very serious deficiency in energy foods (principally cereal androot crops) and a less serious deficiency in protein foods, and particularlyof animal protein foods. This pattern could be discerned in spite of majordifferences between regions, socio-economic classes and within families.The figures demonstrating this are shown in Table 1 to this annex and aresummarized below:

1/ 1976: USAID supplied 10,000 tons for famine relief in Upper Region,and the Bank of Ghana purchased 10,500 tons for the feedsector.

1977: Government has committed funds to import a total 40,000 tonsof yellow maize for the feed industry (ex Canada), and USAIDis understood to be willing to supply a further 20,000 tonsfor famine relief in Upper Region.

2/ Poultry production accounts for 40% of the marketed output by valueof livestock sector (see Chart 1).

APPENDIX 3Page 2

Table 1: ENERGY AND PROTEIN CONSUMPTION

Energy Food Protein Food Animal Protein Food% of Need Met % of Need Met % of Target Met

National Average 82 119 n.a.Northern Zone 79 156 37Southern Zone

A. Forest 81 119 120Coastal Plain 69 93 79

B. Rural 77 110 102Urban 76 139 170

3. Measured in grams of protein per head per day, consumption ofanimal protein in the Southern Zone of the country (i.e., both the forestand coastal plain belts) was shown to range from 11.8 grams on the coastalto 25.5 grams in the urban areas. This figure may be useful compared tothe 1975 national figure for mean average consumption of animal proteinderived from marketed fish and meat which is 17-18 grams per head per day.Over 90 percent of this total animal protein consumption is derived from fish:the marketed fish catch in 1975 exceeded 300,000 tons 1/ whereas marketedmeat supplies were about 30,000 tons.

4. The National Nutrition Survey figures indicate a serious deficitof energy foods in all areas, but an adequacy of protein foods in all areasexcept the coastal plain. Consumption of animal protein has been expressedas a percentage of a "target" rather than a "need" since animal protein isa desirable but not an essential part of an adequate diet. The desirablenorm is considered to be about 15 grams per head per day. 2/ Measuredagainst this norm, consumption is shown to be deficient in the Coastal Plainand the Northern Zone, but adequate in the forest and urban areas of thesouth. The figures indicate that whereas consumption of protein foods insouthern urban areas is about 140 percent of need, consumption of animalprotein products is about 170 percent of the desirable norm. These figurescertainly disguise important imbalances between socio-economic classes, andthe widely recognized fact that family heads consume protein foods at theexpense of growing children whose nutritional needs should have priority.Thus, although protein consumption expressed as an average is more thanadequate this should not disguise the fact that its skewed distributionpermits protein malnutrition to exist.

1/ 1974 catch: Imports: 86,974 tonsLocal: 226,899 tonsTotal: 313,823 tons.

2/ See "Engergy and Protein Requirements" WHO/FAO Rome 1973.

APPENDIX 3Page 3

Implications for Agricultural and Livestock Development Strategy

5. The predominance of fish in comparison to meat as a componentof animal protein consumption indicates the small contribution which ismade by marketed meat supplies to total protein consumption. Further, thegeneral adequacy of protein supplies, particularly in comparison to calorysupplies, suggests that marginal additions to per capita urban consumption ofmeat products will not significantly improve the nutritional status of thepopulation. In particular there is no reason to believe that such increaseswill correct the existing maldistribution of animal protein supplies which area product of income distribution and family cultural patterns.

6. The figures indicate the severe need for an increase in the supplyof energy feeds throughout the country. In fact, the demands of the poultryindustry for feed including maize have been growing at a rate of at least 30percent per year since 1970 and from 1974 to 1976 have accounted for at least40,000 tons per year or between 9 percent and 12 percent of local produc-tion. In the tight supply years of 1975 and 1976, this will have been animportant contributive factor to the steep rise in the maize price (from0 14 in early 1975 to e 100 in late 1976). Given the market situation formaize and the character of the nutrition problem, it would appear wrong tofurther increase the livestock sector's demand for feed at this time.

'ICALORY, PROTEIN AND ANIMAL PROTEIN CONSUMPTION IN GHANA

* RNTRryV PROTEIN Z AnizAl ANIMAL PROTEINMean kcls Mean g. Per Protein Calorie Products on Mean 8.- Per 7. of TargetPer Head Per Day % of Need Met Head Per Day % of Need Met %__ Protein Intake Head Per Day Consutmption

National Average 1,7,26 82 39.3 119 9.1 n.a. n.a. n.a.

Northern Zone

Average 1,655 79 51.8 156 12.5 10.6 5.5 37

Northern Region 1,737 83 50.3 156 11.6 n.a. n.a. n.a.

Upper Region 1,573 75 53.2 161 13.5 n.a n.a n.a

Seasonal Variation

March 1,096 52 38.0 115 13.9 n.a. n.a. n.a.

September 1,600 80 52.0 157 12.4 n.a. n.a. n.a.

Southern Zone

Average 1,585 76 38.2 115 9.6 n.a. n.a. n.a.

A. Forest 1,701 81 39.4 119 9.3 45.4 17.9 120

Coastal Plain 1,437 69 30.8 93 8.6 38.3 11.8 79

B. Rural 1,612 77 36.5 110 9.1 41.8 15.3 102

Urban 1,593 76 46.1 139 11.6 55.4 25.5 170

Source: National Nutrition Survey data of 1960-62, re-interperted by Dr. John Mason of FAO in "Perspective Study of Agricultural Developmentfor Ghana: Nutrition", FAO, Rome, 1976 (draft) and CPS Nutrition Unit.

F-Z

1975/76 TOTAL ANIMAL FEED UTILIZATION 1/

A. POULTRY 1/ Aggregate figures: only accurate to nearest 5,000 t.

Layers 2/ *Assumes 900,000 day old chicks sold by Pomadze and700,000 by Darko Hatcheries; in addition 250,000

No. of chicks sold 2/ 1,900,000 produced by other suppliers (Ghanachix, State farms)Mortality rate 40% and imported.Average no. of birds to feed 1,520,000Feed per bird per year 40 kg 3/ Arbitrary assumption: Pomadze feed mill uses 70%Total feed consumed 60,800 t maize but over 50% of poultry feed is mixed byMaize component at 50% 3/ 30,400 t farmers who substitute other cereals, wheat bran and

brewers' grains for maize.Broilers

4/"°85% supplies by Pomadze. Other hatcheries concentrateNo. of chicks sold 4/ 1,600,000 on layers.Mortality 25%Average no. of birds to feed 1,400,000 51 See 3/ above.Feed per bird 4 kgTotal feed consumed 5,600 t 6/ To nearest 1,000 t.Maize component at 40% 5/ 2,240 t

7/ Average of Veterinary Department slaughter figures forTotal poultry feed 6/ 66,400 t 1973, 1974, 1975.of which maize 26,600 t

8/ Based on field survey data, confirmed by AnimalB. PIGS Research Institute Survey, 1972.

No. of pigs slaughtered 7/ 33,600 9/ Based on field survey data, confirmed by AnimalAverage carcass weight 8/ 60 kg Research Institute Survey, 1972.Tons of pig meat 2,016 tAverage feed conversion ratio 9/ 6: 1 10/ Reflects practices of farmers mixing own meal.Feed consumed 12,000 tMaize component at 40% 10/ 4,800 t 11/ Additional 5% for other livestock; uainly sheep, andWheat bran component at 40% 4,800 t 'traditional' pig industry and 'backyard' poultry.

Say 50% maize.C. OTHER LIVESTOCK 11/ 2,000

Total feed c.75,000 tOf which maize c.40,000 t

F4

a Mt'i3

APPENDIX 3Table 3

COMPARISON OF FOREIGN EXCHANGE COMPONENT OF IMPORTEDCARCASS MEAT AND POULTRY BROILER MEAT PRODUCED FROM

IMPORTED MAIZE

Imported Beef Broiler Meat

…--------------…$/ton-1/ 3/

C.I.F. Value 1,500 2102/ 4/

Retail Value 3,600 4,350

FE Component 42% 5%

1/ Approximate late 1976 price of Australian frozen, bone-out 85% visiblelean, cow meat

2/ Assumes retail price of ¢ 1.90 per lb for boneless beef.

3/ Assumes feed conversion ratio of 2.5:1; 75% killing out percentage; 50%maize component of ration, c.i.f. price for feeding Yellow Maize of$210/ton; $10 domestic storage and transport cost for maize; $20 foreignexchange component of imported premix and protein supplement.

4/ Assumes retail price of ¢ 5.0 per kg.

GHANA LIVESTOCK SYSTEM 1975/6INPUTS AND OUTPUT VS. TYPE OF PRODUCT & VALUE

CEDIS

GRAZINGLAND

53 M ACRESMO.OA. FEED DAY OLD

BUDGET M.OA.25.0M CHICKS VET

. | DRUGS i tl.7 M M3.5 M | M

FEED VTBEDN0 2.5M DUSSL

VILLAGE COMMERCIAL VILLAGESDOMESTIC CASH DOM CASH DOMESTIC SECTOR SECTOR SECTOR DOMESTIC

CONSUMPTION SALE CON SALE CONSUMPTION T CONSUMPTION

TRADITIONAL BEE 2O M t2O M iSM e1ll m 25M 40HERDMILK TIONEEF SOLDFORCASH: t65M SOLDFORCASH: t30M 3 M

11%. 030M M5:95

SHEEP & GOATS PIGS EGGS CHICKEN MEAT11% t40M 7% t2OM 32%: t 90 M 18%: t 50 M

' t~~~~~~~~~~~~~~~~~~~280M

World Bank-17198

:7I

PROPOSED ORGANIZATION OF THE LIVESTOCKSECTOR UNDER FAO/UNDP

MEAT DEVELOPMENT PROJECT

MINISTRY LIVESTOCK DEVELOPMENT SANK OF GOF COMMISSION _ _ _ _____ Livestook Development

-mluroner ~ I _ _ _ dTechnicalDictorDirtor f Animal Financial Analyrt Fund Manager

I I l I l ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~r-j--j ,-- -j--j r--j--1 r-j,~GHANA SHEEP GHANA PIG POMADZE |GHANAFEED LIVESTOCK GRANDPARENT GHANA SHAIHILLS Banfl |

LT=D POIG ILLVESOCKOCKnn. - _ _ . IWinebeWinneba Mill coOON PRODUCTION CO ATTLE RANCH Prhp n d

41000 Ho Ronch Paren Stock CiPrOnin Regionaol Mills -- CO NOLONUpper4t, 0 HJ Ranches NuDING ~ Y In°nedb~ L a . Ac ra Kumasi L _ _ _ _ 4 t _ _ _ ] t _ _r_ _umali__egi|nR hes

L…… Tamale C Coast L

mroiaer Nottee Esgt| Supply s 1 rioA Y | Marketing

Production Production Purchates & Loans Services80.000 Birds 22,500 Birds Distribution Assessment & Deportment

' ~ ~~ ~~I I _ _ , -20 Smallholders

100 Ewe Flocks I I 500 Bird I 1 2500 Bird { 1 10.000 Bird | | 10,000 Bird | | 40 rCiOG Bind | |212 Sow Pig | S| Bdw Pig I

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ANNEX IVPage 1

THE INSTITUTIONAL FRAMEWORK

1. The responsibility for the formulation and implementation ofthe Government's agricultural policy rests with the Ministry of Agricul-ture (MOA). its authority also extends to the following boards andcorporations:

-- State Farms Corporation

-- Ghana Community Farms (formerly Food Production Corporation)-- Food Distribution Corporation

-- Grains and Legumes Development Board

-- Cotton Development Board-- Bast Fibre Development Board

-- Rice Mills Unit

-- State Fishing Corporation-- Ghana Tobacco Company Ltd.

-- National Rabbit Development Project.

2. The Ministry has had a turbulent history. For many years it washeld in low esteem and during the Nkrumah regime it was virtually dismantled.Only since 1972, with the initiation of the "Operation Feed Yourself", hasit received proper attention. It has been subject to a number of reorganiza-tions, the latest in mid-1975. To a certain extent this may account for someof the weaknesses of the Ministry at the moment. Now that the agriculturalsector has been given top priority in the development of the country, whichis reflected in a rapid increase in budgetary allocations, it is vital thatMOA is capable of making this change in strategy a success. There are twofactors, however, that make it difficult for it to meet the challenge. Thefirst is a lack of qualified and motivated staff; the second concerns theextent and the organization of the Government's involvement in the agricul-tural sector.

3. The Ministry has difficulty in engaging and retaining qualifiedstaff. A low level of pay, relative to that of the various boards and cor-porations as well as to the private sector, renders employment in MOA un-attractive 1/. MOA's recruitment is further hindered by a number of otherfactors: traditionally low prestige, hardship of postings away from Accra,and low morale among staff. There is a widespread sense of frustrationcreated by a lack of guidance, in-fighting among the various departmentsbecause of inadequate coordination, and poor use of available skills andmanpower. The roots of many of these problems lie in deficiencies in theorganization of MOA; changes in the latter that might improve the situationare discussed below.

4. In addition to its effect on staffing, the current organizationof MOA in itself shares responsibility for many of the present difficultiesin the sector. The Ministry was reorganized in 1975 and now comprises sixprofessional departments -- general agriculture, veterinary services, animalhusbandry, fisheries, irrigation and mechanization -- each headed at thenational level, by a director (see organization chart). Attached to the

1/ This applies of course to civil service employment as a whole.

ANNEX IV

MINISTRY OF AGRICULTURE - ORGANI%ATION CIIART Page 2

I. Existing organization

E~~~ionerJF-Commi-ss__]r

Senior Principal Secretary

Economic Research

and Planning Service

Igeneral animal -veterinary l||mechanization ||agriculture ||husbandry services | irgto and transport

gen. animal vet. mech.REGION agric. husb. serv. irrig. fish. &

transp.

II. Proposed organization

Commissioner

Senior Principal Secretary

Policy Preparation,Planning and Budgeting

Chief ChiefTechnical Officer [- -- Field Operations

Specialist services l

Training _ _ _ _ _ RegionalTResaing Director of AgricultureResearch

Market Intelligence

gen. animal vet. smech.agric. husb. serv. irrig. fish. &

trans

ANNEX IVPage 3

office of the Senior Principal Secretary (SPS) is the Economic Research andPlanning Service (ERPS), also with a director at its head. Most of the depart-ments, as well as the ERPS, have regional offices whose heads are directlyresponsible to their directors in Accra 1/. The difficulties created by thenew set-up, as well as by the lack of control on the growth of the functionsof MOA and the parastatal bodies, can roughly be grouped under four mainheads. They concern: (i) the degree of centralization; (ii) policy prep-aration, planning and coordination; (iii) the role of the boards and corpo-rations; and (iv) the extent of direct government involvement in productionand marketing.

The Need for Decentralization

5. Decision making in the public sector in general is highly central-ized, born out of a shortage of skilled and experienced people. In agricul-ture, all, except minor, operational decisions are taken in Accra. The dis-advantages of such a system when communications are bad, and operationalsupport has to be both widespread and flexible, are obvious: long delaysoccur in decision taking; headquarters -- because of their remoteness -- are

unfamiliar with local issues; there is little operational flexibility in theuse of resources in response to sudden problems; and the lack of responsibil-ity at the local level does not provide a challenge to staff. Most of thesenior staff are concentrated in Accra and the quality of the operationalwork at local level leaves much to be desired.

6. We recommend a shift of all operational responsibility from head-quarters to the regions, and a further delegation to district level wherepossible. This would require the appointment of a regional director of agri-culture in each region, responsible for all operational activity of MOA andfor the coordination of the work of the various departments whose headswould report directly to him instead of to their professional head in Accra.Regional directors would report to a "chief of field operations" (CFO) inAccra, who would supervise and assist with the implementation of regionalprograms. A "chief technical officer" (CTO), responsible for specializedservices, research, training, market intelligence, etc., would help theregions with the planning and preparation of projects and provide them withassistance of a technical nature. Both CFO and CTO should report directlyto the Senior Principal Secretary (SPS). Qualified staff would have to betransferred from Accra to the regions. The prestige attached to regionalpostings would have to be increased, perhaps through better pay or quickerpromotion.

1/ The Fisheries department has no regional extensions and some departmentsare not represented in all regions.

ANNEX IVPage 4

Policy Preparation, Planning and Budgeting

7. The complement to operational decentralization is a strong policymaking and planning body at the center. Due to a preoccupation with opera-tional matters, MOA is giving insufficient attention to policy and planningmatters at the moment. The planning division is more concerned with datacollection, much of which is never used, than with the development of a con-sistent framework in which production targets are set and concrete policymeasures are outlined. The work of this division is hindered by the factthat it receives insufficient cooperation from the other departments.

8. The lack of coordination and cooperation between the departmentsis a major weakness of the present structure. Furthermore, budgeting andfinancial control are of a very low standard. In fact, it is one of theworst ministries in terms of budgetary control, yet it is also the one wheretiming of operations is crucial and proper coordination of the budgetaryprocess with operational work therefore most needed.

9. The new planning, budgeting and policy formulation unit (PBP) wouldbe an advisory body to the SPS. A strong and effective PBP can only existif its functions and those of the CTO and CFO are set out in specific anddetailed terms of reference. These three senior professionals have to coop-erate closely and their activities have to be well coordinated.

Role of the Public Sector

10. The direct involvement of the public sector in production and mar-keting has a long history in Ghana. Numerous boards and corporations havebeen set up over the years, many with the object of developing or marketingcertain crops (cocoa, cotton, tobacco, etc.), and in addition MOA itself isengaged in various activities of a commercial nature. Over the past yearseveral measures were announced that indicate an expanded role for the publicsector. Blaming the private sector partly for the current food crisis, theGovernment apparently decided that it should itself become more active andshould intensify and widen its efforts relating to production and marketing.Recent examples are: (i) the establishment of a Marketing Unit in MOA,which would be actively involved in crop movement and exert some controlover supplies passing through farmers' markets (see Annex V); (ii) the startof coffee and cocoa plantations by the CMB; and (iii) the setting up of theNational Reconstruction Corps, which is supposed to be engaged to some ex-tent in agricultural operations. There are two main objections against thisapproach: (i) it does not address itself to the causes of the present stateof affairs; and (ii) it does not take into account the poor record of many ofthe Government's activities in these fields. The Ghanaian experience so farpoints to the need for the Government to reduce rather than expand itsinvolvement in operations that are essentially of a commercial nature, andto concentrate instead on strengthening its supporting role.

ANNEX IVPage 5

Boards and Corporations

11. A total of twelve boards and corporations now operate in the agri-cultural sector (para. 1). 1/ They have the advantage of working outsidethe large ministerial bureaucracy with its inherent inefficiency, which isessential for a proper commercial operation. However, the benefits of sucha delegation of functions generally has failed to materialize; instead, theGovernment seems to reap most of the disadvantages associated with the ex-istence of such a large number of institutions in terms of lack of controland coordination.

12. What has become evident, especially over the last few months,is the absence of a clear policy regarding the role of these institutions.Their operations have gradually expanded, encouraged by the Government,often into areas they were not originally meant to be active in. The gen-eral picture is one of a lack of direction, coordination and proper finan-cial control. Considering the large funds that every year are allocatedto these institutions, the absence of financial and other information toassess the economic merit of such expenditures is extremely serious in thepresent fiscal situation. 2/

13. Insufficient attention to policy preparation has led to confusionand conflicts. E.g. the Government has financed new mills for the RiceMills Unit (RMU) but, at the same time, by requiring the RMU to adhere toa purchase price for paddy well below the market price, has brought millingoperations to a virtual standstill. Another example of a lack of coordina-tion is the present organization of extension services (see Appendix). Afarmer may in theory be visited by extension staff from the Grains Board,the Cotton Development Board and MOA. 3/ Each extension agent is supposedto advise only with regard to the crop for which his unit is responsible.Since all agents have the same training this is a most inefficient set-up.

1/ The ten institutions listed in para 1, the Cocoa Marketing Board, whichcomes under the Ministry of Cocoa Affairs, and the Grains WarehousingCompany. The latter and the Food Distribution Corporation are discussedin more detail in Annex V, while the activities of the Cotton DevelopmentBoard and the Rice Mills Unit are described in Annex XI.

2/ The 1976/77 budget for MOA includes ¢18 million for various boards andcorporations, about half of which is classified as capital expenditure.In addition a loan of V34 million was granted to the State Farms Corpo-ration, which was partly used to clear debts.

3/ Within MOA the departments of General Agriculture and of Animal Husbandryeach have their own extension staff.

ANNEX IVPage 6

14. The apparent failure of the private sector to increase agriculturaloutput has induced institutions such as the Cocoa Marketing Board and the.iI>e Hills Units, which have a marketing or processing functicn, to move intoproduction as well. More recently the Government has required all boards andcorporations, including those operating outside the agricultural sector, toset up farms to feed their employees. The latter looks like an emergencymeasure and ignores what lies at the roots of the food crisis. It also dis-regards the fact that even the corporations that were specifically set up tofarm are notoriously inefficient. Losses by the State Farms Corporation (SFC)and the Food Production Corporation (FPC) amount to millions of cedis eachyear. 1/ In the case of FPC this may partly be due to its dual role as pro-ducer as well as employment and training center. Nevertheless, the fact thatthe value of its output amounts to a fraction of its total costs, ought to beenough to discourage any further attempts to raise agricultural output alongthese lines.

Table 1: FOOD PRODUCTION CORPORATION-FINANCIAL RESULTS(thousands of cedis)

6 months ending Year ending Year ending Year ending3/31/72 3/31/73 3/31/74 3/31/75

Income 126.6 516.6 535.9 800Sales of produce 73.6 218.7 472.2 603Other 53.0 297.9 63.7 197

Expenditure 2082.9 4221.3 4698.9 6936Production cost 1306.2 1554.7 3343.9 4700Other costs 776.7 1838.7 1355.0 2236

Gross Operating Loss 1956.3 3704.7 4163.0 6136Less increase in stocks 174.2 380.0 253.9 14

Net Operating Loss 1782.1 2496.8 3909.1 6122

Source: Annual Reports Food Production Corporation.

15. It is suggested that in its policies vis-a-vis the parastatals theGovernment observe the following basic guidelines:

(i) reduce public sector involvement in operations of acommercial nature;

(ii) insist on improved financial accounting and reporting;

1/ The combined loss of these two corporations alone amounted to nearly¢6 million in 1974 and close to ¢10 million in 1975.

ANNEX IVPage 7

(iii) provide institutions with a healthy framework withinwhich to operate; and

(iv) avoid overlapping and try to combine parallel functions.

16. More specifically, the following measures relating to the opera-tion of the boards and corporations are recommended:

(i) consider the concentration of all extension servicesand demonstrations under MOA; this would affect inparticular the Grains Board and the Cotton Develop-ment Board. The Grains Board might in return takeover the seed multiplication activities of the SeedMultiplication Unit (SMU) and combine them with itsown work in this field. The CDB would become a purelyprocessing and marketing organization. The recommenda-tions with regard to the organization of extension andseed production are set out in more detail in an appendixto this annex;

(ii) improve financial control over the operations of theparastatals. This should include the establishment ofproper financial accounting and reporting standards; 1/

(iii) halt further expansion of public sector involvement inproduction and marketing and gradually transfer viablefarms to the private sector; this applies particularlyto food crops, where the performance of state farmsappears to be worse than for industrial crops. Trainingthrough the FPC should aim at preparing and encouragingprospective farmers to start for themselves;

(iv) encourage institutions such as RMU and SFC to operate ona commercial basis through sensible pricing policies;

(v) restrict role of Food Distribution Corporation to thatof an intervention agency to support a system of minimumprices and discontinue its present policy of competingwith private traders; and

(vi) examine the need to continue the operations of theBest Fibre Development Board; there are indications

1/ E.g. the annual report of the Food Production Corporation lists -- byname -- the employees who went on maternity leave, but fails to explainthe huge difference between expected and realized income.

ANNEX IVPage 8

that growing kenaf is not an economic propositionin Ghana and that resources could be better usedfor other crops. 1/

17. Restricting the role of MOA. Several functions of a commercialnature that at the moment are the responsibility of MOA, would be betterleft to the private sector. The manpower shortage, the lack of commercialskills and the bureaucratic unwieldiness make the MOA an unsuitable body forthe efficient performance of functions such as input distribution, seedmultiplication, mechanization services and transport of produce. One reasonfor the inadequacy of extension services is that extension agents are usingscarce transport facilities to move inputs, yet there is an efficient privatedistribution system that could handle this (see Annex V). Similarly, asthere is no justification for subsidizing mechanization, there is no reasonwhy the MOA should get involved in tractor hire services; most of the equip-ment now in the hands of the mechanization department should therefore betransferred to private agencies who are able to provide a more efficientservice (Annex VIII). This also applies to the newly established "marketingunit" which is being equipped with a large fleet of vehicles to assist themovement of produce from farms to urban centers. Though the lack of trans-port capacity is certainly a major bottleneck, efforts and resources couldbe more usefully directed through assisting private operators than by fittingout and manning an entirely new unit in MOA (Annex V). A reduction of MOA'sinvolvement in these areas would enable it to assume responsibility for thefull range of extension services - and improve their effectiveness - and playa greater role in planning and policy formulation.

1/ The BFDB lost a total of ¢1.8 million over the four years 1971/72 to1974/75, the annual loss from almost V200,000 in 1971/72 to ¢740,000 in1974/75.

APPENDIXPage 1

ORGANIZATION OF EXTENSION SERVICES

Organizations Involved

1. General extension is carried out by MOA's departments of GeneralAgriculture and Animal Husbandry, whereas crop specific extension is theresponsibility of the various boards (Grains and Legumes Development Board(GDB), Cotton Development Board (CDB) and the Bast Fibre Development Board.In addition, private firms, such as the Ghana Tobacco Company, have theirown crop specific extension staff.

Staff

2. The Technical Officer (TO) forms the backbone of the general exten-sion staff of MOA. Selected from middle school leavers he undergoes initialfield training as field assistant, followed by three years in an AgriculturalCollege. The TO is generally responsible for one subdistrict with FA'sattached to him according to the importance of the district. Staff/Farmersratios vary considerably ranging from 1:472 in the Volta region to 1:139 inthe Eastern region, reflecting the highest density in cocoa production.Numerically extension density and ratio of supervisory staff to extensionstaff appear adequate for the present level of technology. The presentsubstantial extension force should therefore permit a considerable intensifi-cation of production if backed up by sufficient means and adequate programs.

Programs

3. Ministry of Agriculture. In addition to his extension duties theTechnical Officer is also responsible for provision and distribution ofimproved seed, fertilizers, and chemicals. He is supposed to form "groupfarms" (Nnoboa groups) for joint activities to allow modernized practices, and"crop associations" to obtain a group loan from ADB for the joint purchase ofseasonal inputs on credit. Besides there are a number of special programsundertaken in each region, including establishment of:

- seed nurseries for various tree crops

- plantain plantations for the production of suckers

- trials with special crops (tomatoes)

- small processing plants (gari)

4. Due to its involvement with input distribution and special programsthe extension staff has little time left for actual advice to farmers.Hardly any demonstrations are carried out. Moreover, lack of transport andmeans has further narrowed the staff's activity and lowered staff morale inview of their inability to carry out a meaningful extension program. No

APPENDIXPage 2

refresher and retraining is provided for. Under these conditions the contri-bution of extension to production has remained limited and ineffective, andaverage yields of cereals, grain legumes and starchy roots in Ghana indicatelittle progress.

5. Cotton Development Board. Up to the present CDB. has retained allactivities for production promotion under its own management. These includemechanical land preparation for block farms, organization of crop spraying andadvice on cultivation techniques. Depending on the extent of cotton cultiva-tion in the area, CDB has a number of buying teams in the district that areresponsible for organization of spraying and advice during the growing season.

6. Although a rapid increase in cotton cultivation has taken place,average yields of 500 kg/ha remained low and neither justify extensive spray-ing nor mechanized land preparation. A considerable extension effort istherefore needed to raise yields under intensified cotton production toeconomic levels. In addition, pure cotton extension, like all crop specificextension in a multi-cropping farming system, can lead to overlapping ofactivities and confustion of farmers by conflicting advice from differentagencies. The solution adopted under the Upper Region Agricultural Develop-ment Project, to entrust the project staff of MOA with all cotton extension(thereby limiting CDB's functions to marketing and processing) allows forthe necessary intensification of the extension effort while safeguardingthat cotton is well placed within the farming system. It is recommendedthat a strengtheened extension service in MOA be made responsible for allcotton extension as well.

7. Grain and Legumes Development Board. In line with its objectiveto bridge the gap between research and the farmers in providing cereals andgrain legumes, GDB has embarked on a variety of activities that are partlyoverlapping with those of MOA staff:

- GDB carries out a number of demonstrations on improvedcultivation practices throughout the regions. In1976, 600 demonstrations on maize, rice, sorghum,and groundnut cultivation were carried out witha demonstration-staff of 60. For 1977, staff anddemonstrations are planned to be doubled.

- Realizing the weakness of MOA's seed production pro-gram, GDB has also established a network of foundationseed farms. In 1976, 86 ha producing about 100 tonsof grain and legumes seed had been established.

- In addition, GDB is involved in a number of programs,such as carting maize from inaccessible farming areasto purchasing depots, shelling services for maize,and staff and farmers training activities.

APPENDIXPage 3

8. The overlapping of GDB's present program in extension and seed pro-duction with the respective department of MOA is in danger of creating fric-tion and to have a demoralizing effect on MOA staff. On the other hand, GDBseems better equipped and more dynamic in the implementation of its programs.A clear division of functions between GDB activities and those of MOA properwould not only prevent overlapping and friction, but allow proper speciali-zation of each institution concerned. It is therefore proposed that GDB spe-cialize on seed production by taking over all activities of SMU, while MOAspecializes on extension and demonstration. Extension staff, backed up byrelevant retraining programs, would be able to devote full time to advice,once relieved of input distribution duties. GDB on the other hand wouldalso take over nurseries for tree crop production hitherto established byMOA staff (with the exception of cocoa) and could then be renamed "Seed andPlant Production Board." Such a reorientation of this organization wouldallow putting these essentially commercial functions on a gradually increas-ing self-financing basis.

SEED PRODUCTION

Ministry of Agriculture

9. Seed production and multiplication is the responsibility of theSeed Multiplication Unit (SMU) of the Ministry of Agriculture. SMU is groupedinto 3 sections: foundation seed production, registration of seed growers,and seed testing and certification.

Production of Foundation Seed

10. SMU's three farms, Winneba (64 ha), Kumasi (40 ha) and Ho (40 ha)produce mainly maize and groundnut seed. For rice seed production, 20 haeach on four irrigation schemes are foreseen, as well as a farm in Tamale.Production from the seed farms has steadily declined (from 200 tons in 1974to 135 tons in 1976), a reflection of the run down condition of the farmsas much as adverse weather conditions. The farms are therefore in need ofinvestments for modernization and proper management.

Production of Certified Seed

11. Foundation seed is multiplied by registered growers with farms ex-ceeding 20 ha of maize. There are presently 22 registered maize growers and20 rice growers. From their deliveries 912 tons of seed maize and 214 tonsof paddy, were distributed; no regional breakdown could be obtained. Formaize this would be hardly enough to plant 10 percent of the expected areawith improved seed. Non-availability of improved maize seed was thereforethe complaint in all maize growing areas. Apart from limitations in trans-port and distribution by agricultural staff, lack of binding contracts withseed growers and inflexibility in price policy were the reasons for the short-fall in performance. With maize prices rising rapidly towards ¢80 per bag,

APPENDIXPage 4

selling prices under the growers' contracts of C55 per bag were not competi-tive. Budgetary rigidness on the other hand prevented SMU from a flexibleadjustment to unforeseen price developments. Strengthening of SMU facili-ties for seed production, treatment, storage and inspection is foreseen underthe USAID financed MIDAS project.

12. Rice seed production is better since the German financed Agricul-tural Development Project in the Northern region established two large seedcleaning, dressing and storing units for 9,000 tons of paddy in the Northernand Upper region. Owing to adverse weather conditions, seed distributiondeclined from 3,000 tons in 1974 to 200 tons in 1976.

Seed Testing and Registration

13. This section is charged with enforcement of the Seed Law of 1972prescribing regular field inspections and laboratory tests to ensure seedpurity and quality. The section is presently understaffed and lacks properequipment.

Grains and Legumes Development Board

14. The unsatisfactory performance of SMU has developed into a bottle-neck for further production increase, inducing the Grains Development Boardto set up its own foundation seed farms for maize, paddy, groundnuts, soybeans, cow peas, and sorghum.

Grains and Legumes Development Board - Areas under Seed Crops(hectares)

1976 1977 (planned)

Maize 148 274

Rice 41 160

Groundnuts 83 86

Soy Beans 100 200

Cow Peas 8 8

Sorghum 80 52

15. This duplication of seed production efforts is wasteful and demandsa reorientation and reorganization of Government's seed production policy.Seed production and distribution is a commercial activity which governmentdepartments generally find difficult to perform efficiently. Seed testingand inspection on the other hand corresponds with a Ministry's regulativeand control functions. In view of the fact that Government has created a

APPENDIXPage 5

special agency charged with promotion of crop production - of which seedproduction is an essential part - it is suggested that the Grains Develop-ment Board be charged with all seed production and multiplication, whileseed inspection, testing and registration would remain the Ministry's re-sponsibility. This would allow the Grains Development Board with its moreflexible operational procedures to specialize on seed production rather thanduplicating MOA's efforts in seed production, demonstration, and extensionas at present. In this context, a more productive use for Ejura Farms,possessing drying and storage facilities for 20,000 tons, could be envisaged.Once its soil fertility problems are solved this farm could play the role ofa leading maize and grain legumes producer and distributor for which it wasoriginally established.

ANNEX V

MARKETING AND INPUT DISTRIBUTION

TABLE OF CONTENTS

Paragraph

INTRODUCTION 1-6

MARKET DEMAND FOR FOOD 7-16

The Extent of Demand 7

Dietary Preference 9

Food Demand 10

Market Demand 13

Comparison of demand and Production 15

MARKETING ORGANIZATION AND SYSTEM 17-43

Marketing Channels 17

Government Policy and Involvement 23

Crop Movement and Storage 34

PRICES AND MARKET INTELLIGENCE 44-48

INPUT SUPPLY AND DISTRIBUTION 49-55

JUDGEMENT AND CONCLUSIONS 56-69

APPENDIX: POPULATION PROJECTIONS

TABLES: 11 through 22

ANNEX VPage 1

MARKETING AND INPUT DISTRIBUTION

INTRODUCTION

1. Responsibility for the bulk of all food supply rests with smallfarmers, over 80 percent of whom market some proportion of their production.(See table below).

Table 1: DISTRIBUTION OF HOLDINGS BY SIZE ANDPROPORTION OF PRODUCTION SOLD - 1970

Holding Subsistence Selling Less Selling MoreSize Only than 50% of than 50% of Total(Acres) Production Production

No. YO No. % No. % No. % oftotal no.of -:oldings

0-3.9 81,103 18.3 188,305 42.5 173,892 39.2 443,300 55.1

4-9.9 25,553 11.6 78,219 35.4 117,2ib _3.i 221.048 27.4

10 + 4,444 3.2 23,176 i6.5 113,232 80.4 140,852 17.5

Total 111,100 14.0 289,700 36.0 404,400 50.0 805,200 100.0

Source: 1970 Sample Census of Agriculture

Available information indicates that about 50 percent of food crop productionis marketed.

2. Food supply for most of the urban centers has been largely self-generating since they are mainly fed from their immediate hinterland. Thisapplies even to large demand centers. For example, in 1970-71 it was foundthat about 53 percent of all food entering Cape Coast (Population 52,000) camefrom within a 20 mile radius and over 90 percent from the Central Region 1/.The major single market is Accra (1975 population 1.1 million) and traditionalheavy reliance on a narrow supply band is undoubtedly a major contributoryfactor to the difficulties now being encountered there, particularly as itscoastal situation tends to restrict access. The strong agricultural bias ofmany small towns results in much market activity effectively being an inter-change of surplus production rather than sales to permit purchases of non-fooditems. Large areas of the country are thus self-sufficient, with the usualexception of fish, although only Brong-Ahafo and Ashanti are consistentsurplus producers of staples. In the Upper Region there is usually inadequateproduction of cereals, the main staple, a deficiency resulting in chronicseasonal malnutrition, whicsh frequently reaches severe proportions (as in 1976and 1977).

1/ "The flow and marketing of agricultural produce in the Central Regionwith special reference to Cape Coast". E. Amonoo, University of CapeCoast, Centre for Development Studies, Research Report Series PaperNo. 15.

ANNEX VPage 2

3. While physical communications between main centers is generallygood, vehicle access to producing areas outside a rather small radius isoften poor to non-existent. Partially because of this there remains a massof small markets whose situation is related more to density of populationthan production. Consuming areas are therefore supplied from a large numberof points largely isolated from one another. Large intra and inter-marketprice discrepancies exist and seasonal price variations are substantial.The number of participants in the supply system results in hand to mouthtype operations which, with terminal or main market storage virtually un-known, contributes to the price fluctuation process and consequent distor-tion of the demand signals that finally reach producers.

4. In the past official involvement in food grain marketing has beenminimal and, except in the case of rice which is handled by the Rice MillsUnit (RMU), ineffective. Even for rice effectiveness has been only sporadicand dependent on the overall supply situation. Government is now seekingto become directly involved in primary marketing through the Marketing Unitin MOA and supplement the activities of the Food Distribution Corporationin this field.

5. While retailers are frequently organized into various commodityassociations, each under a "queen", cooperatives do not play a significantrole in marketing at either producer or retail level. The sector is domi-nated by the small trader, often inadequately capitalized and almost alwaysoperating in an adverse ambience in both urban and rural market places. Itis apparent that over the past two years domestically marketed productionhas declined against requirements. While weather conditions are undoubtedlya major reason, other contributory factors include the mutually aggravatingpoor roads and lack of suitable transport, more favorable alternative mar-kets, ineffectiveness or irrelevance of government intervention and, probablyabove all, the inability of a traditionally efficient system to adapt to in-creasing and changing needs within a static or deteriorating physical andadministrative environment.

6. The severity of the present situation is indicated by the ConsumerPrice Index which rose from 343.8 in January 1975 to 725.8 in November 1976(1963 = 100). During this period local food prices, weighted at 52 percent,rose from 384.6 to 930, standing at 544.9 in December 1975. The disruptiveeffects of such swinging increases do not need elaborating. With local foodprices consistently rising at a faster rate than the overall index, andproduction stagnant to declining, it is clear that infrastructural, organiza-tional or system factors are severely constraining farmers' responses toincreased consumer prices.

MARKET DEMAND FOR FOOD

The Extent of Demand

7. In present and foreseeable circumstances the extent and patternof demand is likely to be governed almost exclusively by population sizerather than income growth.

ANNEX V

Page 3

Table 2: GHANA: ESTIMATED POPULATION BY CATEGORY1970, 1975 and 1985

('000')

Annual Growth1970 1975 1985 1970-75 1975-85

Ghana 8559 9779 13142 2.7% 3.0%

Urban 2474 3202 5471 5.3% 5.5%

Rural 6085 6576 7671 1.55% 1.65%

Agricultural 5000 5511 6709 2.0% 2.0%

Non-Agricultural 3559 4268 6433 3.7% 4.2%

Source: Annex V tables 11 and 12.

8. Urbanization rates are believed to have increased since 1970, andthe trend is expected to continue (1960170: 4.8 percent, .1975/85: 5.5 percent).This would raise the proportion of urban population from 28.9 percent in 1970to 41.6 percent in 1985. The share of agricultural population is expected todecline from 58.4 percent to 51.1 percent over the same period. A character-istic of Ghana is the strongly agricultural nature of smaller towns 1/;consequently in the absence of other evidence it is likely that the rate ofgrowth of the non-agricultural sector rather than the urban sector provides abetter indication of change in the size of market dependent population (seeAppendix).

Dietary Preference

9. Eating habits range from the predominantly cereal based diet inthe North, to one heavily dependent on root crops in southern forest areas,while a more varied diet is apparent in the coastal plain (Table 15). Forthe purposes of this report demand has been zoned on a geographical basisreflecting dietary preferences; the zones provide a roundly comparable basewith that of the 1961/62 2/ National Nutrition Survey (NNS) and are detailedin Table 13. 'Nationally the 1961/62 Survey indicates insufficient intakeof energy foods (1730 kcal/head/day compared with a desirable 2092 kcal/head/day) and, on a similar average basis, an adequacy of protein at 39.3g/head/day. This latter figure is almost certainly skewed towards higher in-come and older groups, and due to calory deficits the available portion may

1/ In 1970 25% of all towns had over 50% of their employment in agricul-ture.

2/ Data from a 1974/75 Survey are not yet available.

ANNEX VPage 4

not in fact be adequate, being preferentially used as energy. The Survey doesnot reflect the deterioration in nutritional status that occurs from south tonorth, but this is probably largely accounted for by the substantial seasonalconsumption variations. (For the Upper Region an energy intake deficit inMarch of nearly 50 percent is revealed by the Survey).

Food Demand

10. Demand has been projected from estimated 1970-73 supply utilizationfigures. These give an average food supply of about 2300 kcals and 48.7grams of protein per head/day and should be adjusted downwards by about 10percent to allow for preparation and plate waste. The resultant 2092 kcalsand 43.8 grams of protein appear high when compared with the National Nutri-tion Survey, but are similar to the 1960-62 Food Balance Sheet which showedavailability of 2164 kcals and 45.6 grams of protein per head/day. Further-more, the resultant gross consumption of staples is still significantly lessthan official production figures.

11. In order to assess future movement and distribution requirements anattempt has been made to quantify zonal consumption (Tables 13 and 15). Theproportional contributions of major food groups have been derived from the NNSbut the tonnages, at best, should only be regarded as indicative of relativeorders of magnitude. The basis assumptions reflect the state of the economyand assume constant price ratios and no increase in private consumption ex-penditure. The figures are summarized in Table 3 where, a 'high' alterna-tive has been included for comparative purposes. This alternative assumesan annual 1 percent growth in consumption expenditure, 4.5 percent annualgrowth in market population and demand elasticities of 0.5 for coarse grains,0.6 rice, 0.7 wheat, 0.15 starchy staples, 0.4 fruit and vegetables, 0.3legumes and 0.8 oils.

12. Although differences clearly exist between urban and rural dietaryhabits, available information and the very crude nature of the demand projec-tions does not permit these to be quantified. In the Coastal Plain NNS re-vealed the main differences to be a reduced contribution of starchy staplesto the urban diet (by as much as 15 percent of the energy diet) accompanied byincreased consumption of animal products, fats and oils. Although dieteticallythese changes are important, they are not significant when considering rela-tive magnitudes of volumes being or to be handled through the marketingsystem. Any shift in eating habits will tend to be away from roots andtowards cereals. The better calorie/weight ratio 1/ of the latter wouldresult in less produce having to be handled for a given energy intake.

Market Demand

13. With few exceptions all individuals obtain some of their food re-quirements from a third party. There are no data to indicate what proportionof demand if filled in this way. Given the agricultural orientation of manytowns in Ghana as well as the large share of production that is marketed, it

1/ Cereals about 3.5:1; roots about 1.35:1.

ANNEX VPage 5

Table 3: ESTIMATED DEMAND FOR MAIN FOOD CROPS -- 1985

Low High'000 tons

Net- Gross-/ Net-/ Gross-/

Maize - human 418 597 436 623

- feed 40 53 75 128

Sorghum - millet 220 293 235 313

Rice (as Paddy) 143 168 145 171

Wheat Flour (as Wheat) 151 151 174 174

Starchy Staple 4587 6174 4745 6394

- Cassava 1975 2288 1991 2342- Plantain 1016 1563 1050 1615

Legumes 128 183 130 186

1/ "As purchased" basis

2/ Assumes following loss factors between field and timeand point of retail sale:-

Maize - human 30%

- feed 25%

Sorghum and Millet 25%Rice (as paddy) 15% (excluding conversion)Cassava 15% (excluding conversion)Plantain 35%Legumes 35%

ANNEX VPage 6

appears apposite to assume that the figures of non-agricultural populationprovided a better indicator of market size than those for urban population.This predicates a larger market size (1973: 3.56 million v. 2.89 million)with slower growth rate (1973-1985: 4.1 percent and 5.4 percent) than would bethe case if the contrary assumption was made.

14. On this basis market demand for cereals and starchy staples in-creased by about 50 percent between 1960 and 1970 to reach 1.5 million tonnes.By 1985 marketed volume of these food groups will exceed 2.65 million tonnes.In 1985 the average daily 1/ imports of cereals and starchy staples intoAccra markets can be expected to reach 2,200 tonnes having been around 1,000tonnes in 1973 and about 570 in 1960. In the same market anticipated demandfor the highly perishable produce (plantain, fruits and vegetables) willrequire a weekly throughput of about 3,300 tonnes in 1980 and 4,500 tonnesin 1985. Estimated market demand by zone is summarized in Table 16.

Comparison of Demand and Production

15. The base demand estimates used for projection purposes differ inseveral respects from official production figures for this period, althoughit should be noted that neither take into account field to market losses.In some cases this is due to the fact that zonal allocation of available cal-ories and sources was based on the proportions revealed in the NNS, whichare clearly subject to considerable seasonal variations. The rather evenzonal nutritional status would not appear justified from recent observation,but has been maintained in an effort to ensure that future demand for energyfood, particularly in the north, should not be understated.

16. The figures with respect to cereals are in reasonable agreementexcept for guinea corn and millet where estimated demand exceeds production.Considering the usual seasonal undernutrition in the Upper Region, which isnot reflected in the base diet, the production figures are probably moreaccurate. If production of starchy staples is intended to reflect amountsharvested, then these figures appear overstated, particularly for cassava.Even if allowance is made for substantial losses, the available bulk wouldprobably be beyond the average person's capacity to consume. It seems likelythat production reflects the amount believed to be available for harvestrather than that actually harvested. The figures for coconut and palm fruitare difficult to analyze due to the fact that both are consumed in variousforms. Consumption of fresh coconut is mainly confined to coastal areas andimmediate hiTterland of Western and Central Regions; although a large pro-portion of the crop is processed by traditional and modern methods, thedemand for fresh coconuts is probably underestimated. Given the generalstate and age of oil palm plantings, including wild groves, official pro-duction figures appear excessive. Both palm oil and palm fruits are usedfor making soups and stews and, after allowing for the proportion of the cropused for industrial purposes, it is likely that the demand figures are moreaccurate, although possibly they understate the position somewhat.

1/ Basis 315-day marketing year.

ANNEX VPage 7

Table 4: MAJOR FOOD CROPS: REPORTED PRODUCTION ANDESTIMATED DEMAND 1970-73

Production 1/ Demand Difference1970-73 Demand '000 tons 7a-/

Cereals

Maize 3/ 444 290 154 35Guinea Corn/Millet 145 163 - 18 - 12Rice 4/ 35 60 - 25 - 71

(63) 3 5

Starchy Staples 6307 3265 3042 48

Cassava 2620 1354 1266 48Plantain 1755 714 1041 59

Legumes and Nuts 381 92 289 76

Groundnuts 5/ 73 57 16 22Other 7 7 -Coconut 6/ 301 28 273 91

Vegetables 380 185 195 51

Fruits 161 145 16 10

Palm Fruits 7/ (a) 721 59 662 92(b) (134) (59) (75) 56

1/ Trends in the Area, Production and Yield of the Principal Crops Grown2/ Difference as percent of Production (in Ghana 1970-75, Ministry of

Agriculture, Accra 1976)3/ Excluding Feed4/ Milled equivalent, (Total including imports)5/ Shelled6/ In husk'7/ (a) Official figures

(b) Production as estimated in "Appraisal of the Oil Palm Project,Ghana: IBRD Report NO. 173a-GH, February 3, 1975.

AM4NEX VPage 8

MARKETING ORGANIZATION AND SYSTEM

Marketing Channels

17. The marketing system in Ghana has so far managed to maintain suppliesto the major urban areas but at increasingly high cost both to individuals andnationaly. Apparently the system has failed to stimulate production in accord-ance with market requirements. In fact, however, this may not be the simpleimperfection it sounds; there is evidence that in the past increased productionhas been stimulated but farmers and consumers have not benefited from this dueto high losses and spoilage from field level onwards. In other words producersjudged that prior to the 1976 planting season the returns for greater effortand investment were inadequate relative to the risks, despite steadily grow-ing demand and rising consumer prices. The unsatisfactory performance of agri-culture is not, of course, only due to shortcomings in the marketing system butthis system is a major contributory factor.

18. Despite the foregoing the basic food marketing system, which hasevolved over time, is suited to existing production patterns, consumer require-ments and available labor and capital resources. System development is, how-ever, subject to severe constraints, some of which are imposed by the partici-pants themselves, although most are beyond their control. Conceptually thereis little to distinguish the system from that common to much of West Africa,at least up to retail level. Marketing is above all an intensely personalizedbusiness. Wide quality variations and lack of any grading standards requiresthat everything is inspected at each level of trade, an operation which addsto the costs and complications of an apparently simple bulk or assembly opera-tion. As the radius of supply to individual markets grows larger it is prob-able that handling and inspection will constitute an increasing proportion ofoverall marketing costs. In the Cape Coast Study 1/ it was found that anaverage 67 percent of all sellers (wholesalers, retailers and food contractors)were supplied by other intermediaries. Within this figure the ratio of directto indirect purchases were 1:1.43 for produce emanating within a 6-20 mileradius but 1:10 on goods coming from further afield.

19. Difficulties of access and lack of transport result in a largeproportion of farmers selling their surpluses in the field, home or roadsiderather than in the markets, despite the abundance and frequency of thelatter 2/. Itinerant buyers have almost as much difficulty as farmers in se-curing transport to inaccessible places so timing of sales is usually outside

1/ The Flow and Marketing of Agricultural Produce in the Central Region,op. cit.

2/ In 1970 there were 274 periodic markets in the Upper and Northern Re-gions. Of these 12% had a daily attendance of less than 100; 59% 100-500and 15% more than 500, several reaching or exceeding 3000. There werealso 4 daily markets having a daily attendance of more than 50 sellers,and countless smaller ones. 'Markets in Ghana' Volume 1, G. J. vanApeldoorn, University of Ghana.

ANNEX VPage 9

farmers control. This situation is further aggravated by the fact that mosttraders and their sub-buyers operated in fairly rigid geographical bounds,thus reducing potential competition. There are a few large traders who dealmainly in grain and imported vegetables and operate through family networksfrom producer level through to wholesale. These participants make full useof the modern communication network to keep abreast of market developments.Frequently they are accused of making excessive margins through undesirable'monopolistic' practices. At this level of trade, however, the true positionis one of oligopsony, although monopsonists may exist in individual markets.The undesirable consequences of such market situations is exaggerated by thefailure of government's attempts to establish an effective market informationservice. Apart from this group, traders seem to have little capital avail-able to finance purchases or storage and a large but unquantifiable proportionof surplus production is stored on farm. Some production credit is providedby traders against a lien on the harvest. The importance of such credit asa proportion of total production costs is not known. The lien is frequentlyat a fixed price but unspecified termination. This ensures that the borroweralso carries a large proportion of the market risks through having to storethe produce until it is called. Credit is not all one way, however, and insome areas itinerant traders collect produce from farmers and market it on acommission basis.

20. The siting, facilities and development of the official rural andurban markets are generally inadequate for the volumes that have to be handlednow. Few have cement floors while loading, unloading, handling and storagespace is restricted and water and sanitation lacking. In consequence a numberof unofficial market places have been created, or small older rural marketsexpanded. These almost spontaneous developments are either in newly strategicareas or just outside existing urban limits, and are largely unplanned anduncontrolled. In both cases they are usually free of market tolls, the col-lection and rates of which lack uniformity, even in official markets. Tollsprovide a major revenue source for many local authorities, but those on whomthey are levied receive little or no benefit in the form of market improve-ments. Relative to the nature of the trade, retail market conditions aregenerally worse than in wholesale markets, particularly in the large urbancenters.

21. Retailing is almost exclusively the prerogative of women. In allmajor markets, market activities, participants' behavior.and to some extentprices are regulated by commodity "queens", who also arbitrate in cases ofdispute and frequently control the admission of new participants. A queenoften negotiates prices with delivering wholesalers, guarantees payment andensures fair distribution of available incoming supplies among her members.Queens also provide an important focal point of contact between the retailersand the municipal or local authority.

22. Queens are frequently accused of price fixing and setting excessivemargins. This may be true in part, particularly where market supplies arenegotiated on a lorry load basis. Obviously there will be occasions whereprofits are too high, but in general, margins tend to reflect risks. Con-tinuously excessive margins, where they exist, will usually be the product of

ANNEX VPage 10

a tight supply/demand situation compounded by or resulting from poor marketinformation services.

Government Policy and Involvement

23. Government has attempted to maintain a cheap food policy primarilydependent on continued increased production through the Operation Feed Your-self. Some crops, specifically rice and maize, were stimulated through aguaranteed minimum price system (see Annex VII) calculated on production costplus profit basis and implemented by parastatal organizations. The policy en-visaged a ceiling being set for consumer prices by these same organizationsreselling at low margins at wholesale and retail. Import controls and fixedprices for the marketings of other state bodies such as GIHOC, Food ProductionCorporation and State Farms, are intended to reinforce the ceiling. The FoodPrice Index (Table 22) which rose by over 140 percent during the 23 monthsending November 1976 indicates the extent to which policy implementation hasfailed.

24. A recent policy paper 1/ identified "The concentration of economicpower in the hands of the market queens and the traders on one hand and themultiplicity of food retailers who normally rely upon these powerful inter-mediaries for loans to finance their low volume operations" as a major con-straint on effective implementation of the cheap food policy. The paperoutlines new steps which are to be taken to make this policy effective. Theseinclude the establishment of Farmers Marketing Associations at producer leveland Retailer Associations in the urban markets. The two are to be comple-mented by produce collection points and farmers and urban wholesale markets(both of which will include stores), all linked by Food Evacuation teamscontrolled by a Marketing Unit now being set up in MOA.

25. Historically Government has been physically involved in food cropmarketing in a number of ways; presently the prime executive bodies are theFood Distribution Corporation (FDC) and the Rice Mills Unit (RMU). The para-statal Grains Warehousing Company also started business recently, while theMarketing Unit referred to above was authorized in November 1976 and is nowbeing set up. The Food Distribution Corporation was established in November1971 2/ through merging the Food Marketing Board with the Task Force Distri-bution Unit. Originally it was involved almost exclusively in marketing per-ishable foodstuffs but in 1975 FDC became involved in maize marketing throughtaking over the Marketing Division of GDB. FDC was capitalized to the extentof 05.6 million but reportedly 1972-74 losses totalled 04.2 million and thereis no evidence as to what this sum now represents in terms of assets. Govern-ment also provides an annual operating subvention (1975/76, 0400,000; 1976/77,

1/ Government Agricultural Marketing Policy. Economic Research andPlanning Service, Ministry of Agriculture, November 1976.

2/ Legislative Instrument No. 714.

ANNEX VPage 11

0440,000). Crop purchases are financed by the Bank of Ghana through a 02.5million revolving credit. No annual accounts are available for FDC as awhole. 1975/76 accounts for the Grains Division show an operating loss of0307,000 which was translated into a notional profit of 093,000 by the sub-vention from Government. Over 80 percent of the 03.9 million revenue wasgenerated by stock rundown, however, and it is impossible to get an indica-tion of true marketing costs per unit of produce from the available figures.

26. In perishable 1/ foodstuffs FDC attempts to implement governmentprice policies by competing at farm level and reselling through its own re-tail food kiosks and other outlets at a low percentage mark-up. In this roleit is simply another trader and there is no reason to believe that FDC has ahigh enough market share to influence overall prices in any way. The problemsof cash and stock control experienced by FDC underscore, however, the acutedifficulties of this type of operation.

27. FDC (GDB) grain marketing activities were originally confined toimplementing the minimum guaranteed price policy for maize, buying at farmgate when necessary. Here again market influence has been negligible, evenallowing for the slightly different role. The largest annual purchases havenot exceeded 12 percent of estimated total marketings and in 1974/75 whenthere was a substantial seasonal surplus, shortage of storage and lack offinance prevented the Grains Division from buying what was offered and ful-filling its floor price function. Prices fell some way below the officialminimum and stayed low for long enough to constitute a powerful productiondisincentive. The 1975 maize area fell by 25 percent which accounted for over84 percent of the reduction of 125,000 ha in the area planted to cereals thatyear. In 1976/77 soaring food prices and reported grossly excessive inter-mediary profit margins caused Government to change FDC's role. FDC wasinstructed to compete on price at farm gate with traders in addition to con-tinuing the free shelling and transport service FDC customarily provided 2/.These purchases were to be retailed with the usual low mark-up.

28. FDC owns or has the use of storage facilities in the main maizesurplus producing areas in Brong Ahafo and Ashanti. These comprise sixteen1000-ton butyl rubber silos now nearing or at the end of their useful life,and 5000-tons flat bulk store at Ejura Farms. A further about 10,000 tonsof varying suitability and location is also used. FDC also has a number ofserviceable grain driers and moisture extraction units, as well as pneumaticgrain conveyors at the butyl rubber silo sites. The only cleaning equipmentis installed at Ejura Farms, which also has a drier. There are no formal

1/ Defined by FDC as Plantain, Yam, Cocoyam, Cassava and Gari.

2/ This action may actually have fuelled food price inflation. FDC enteredthe market with a farm gate price of 080, nearly equal to the urbanwholesale price at that time. This coincided with the arrival of20,000 tons of maize imports for the poultry industry, which causedthese strong buyers to withdraw from the local menrket.

ANNEX VPage 12

stores at grain buying points, most of which have only a small shed, and thegreater part of purchases are stored in the open pending evacuation.

29. FDC has a large transport fleet for produce distribution but mostof this is off the road due to lack of spares or accident damage. At KumasiDepot for example, only 5 out of 24 trucks were able to operate in February.Tractors and trailers have to be used to evacuate maize from farms and pur-chasing points due to the appalling condition of most farm and feeder roads.Six tractors are allocated to Kumasi but of these there are only two in run-ning order to service twelve buying points.

30. Rice Mills Unit (RMU). Until 1975 RMU was part of GDB but isnow an autonomous body under a general manager responsible to the Commis-sioners for Agriculture. Headquarters and main milling center is at Tamale,with four other mills in the Northern and Upper Regions where 75 percent ofGhana's rice is produced. Milling facilities and operations are described inAnnex XI. RMU implements the floor pricing policy, buying paddy at an annuallyfixed price set by Government and selling milled rice at fixed prices wholesale.These prices are not necesarily linked to the costs of paddy and milling 1/.No accounts are available from which to gauge the costs of this operationbut, from observation these must be very high. RMU has to compete withsmall and large commercial mills and buying only at the floor price resultsin low machinery utilization during periods of relative scarcity 2/ whilestaff and other overhead remain constant.

31. The Grains Warehousing Company (GWC) was established in 1975 withCanadian Development Aid. GWC has an authorized paid up capital of 05.0million, all held by the Bank of Ghana. The Company commenced business inApril 1976 with a Canadian General Manager, this position is now held by anexperienced Ghanaian assisted by a small staff and a technical adviser onone year contract. The primary aims of GWC is to resolve some of the prob-lems associated with milled rice storage and distribution and to carry outcustom storage operations. One 320-ton capacity self propelled barge isbeing built for GWC by Tema Shipyard to run shuttle between Yapei andAkosombo. This service is expected to start in July 1977 and run six roundtrips monthly. A depot is being built at Tamale, transit sheds are plannedat Yapei and Akosombo and a flat store is rented in Tema from STC. Thishas an estimated capacity of 8,000 tons bagged grain. GWC operates five20-ton trucks and has adequate mechanical handling equipment for Tamaleand Tema and should make an impact on north/south and reverse traffic costsand flows when the barge is operational. Additional barge capacity will be

1/ At some stage the rice price was 150 percent of the milled equivalentof the paddy price.

2/ RMU annual purchases 1971/72-1973/74 averaged only 4,900 tons. In1974/75 the totalled 31, 815, 1975/76 crop purchases are believed tohave been nominal.

ANNEX VPage 13

required if justified by the ongoing Volta River traffic study. In themeantime experience is being gained by handling, storing and distributingmaize shipments made against the current import program. As conceived andpresently operated, GWC will concentrate on being storage specialists and itis not envisaged that the company should become involved in trading or own-ing produce. Nevertheless, consideration is being given to development of

bulk facility in Accra, which may be rehabilitated with CIDA assistance.

32. The Marketing Unit (MU) in the Ministry of Agriculture is not yetan effective entity and the planned extent of its organization and operationsis far from clear. Overall control coordination and direction of suppliespassing through farmers markets to be established by the Unit is implicit,but financial arrangements have not been outlined apart from a budgetaryprovision of ¢2.0 million allocated to purchase trucks and tractors for cropmovement and input distribution. During discussions Ministry officialsstated that crop movement and transport control would be the responsibilityof regional agricultural officers assisted by a technical officer especiallyappointed for this purpose. Initial organization of marketing associationswill concentrate on 'Nnoboa' groups and community farm participants whichare already structured in some degree. Responsibility for these activitiesand the establishment of Retailers Associations is to rest with MarketingOrganizers, appointed at the district level; three such appointments had beenmade by end February 1977. Market organizers are also expected to assistin price negotiations between farmers and buyers and the Economic Researchand Planning Service (in MOA) will provide information on prices and supplyas well as research support to the Unit.

33. Cooperatives are officially supported by Government. The bulk ofactivity is confined to cocoa marketing but there are three Regional Unionsand about 500 primary societies engaged in food production and marketing andrepresented by the Cooperative Agricultural Producers and Marketing Associ-ation Limited. Most of these societies cannot compete successfully withprivate traders, have inadequate financial resources and are poorly staffed.The Association was registered in 1974 but no accounts are available despitethe provisions of the Cooperative Act which requires that they be submittednot more than one month from the financial year. (July/June for agriculture,October/September for cocoa). Secretarial and other staff training iscarried out by the cooperative college at Kumasi which has a maximum capa-city of 50 candidates every three months. Assistance over staff salariesis given by the Ghana Cooperative Council which receives a ¢100,000 annualsubvention from Government. As presently constituted and organized coopera-tives are unimportant in produce marketing; this situation will continue forso long as available and financial resources are dispersed over such a widearea. Success can only be measured by the performance of individual soci-eties, not the number of societies created.

Crop Movement and Storage

34. Severe transport problems are a continually recurring theme indiscussions and observation of crop marketing at all levels. This is a

ANNEX VPage 14

two dimensional problem comprising difficulty of access and shortage ofsuitable transport. It has been estimated 1/ that 70 percent of farmers haveto headload produce from their farms and that 38 percent of the movement alongfeeder roads (10 percent of total movement in ton miles) was also by headload-ir.g. Not only does this constitute a powerful market disincentive, but itimplies a low ceiling to the quantity of produce that can reach the markets.There are about 31,500 km of made-up roads in Ghana of which 13,000 km aretrunk roads (Table 5). The main towns of Accra, Kumasi and Takoradi areconnected by the railway system which also serves Tema port and the mines.The railway is specialized on four commodities; timber, cocoa, manganese oreand bauxite. Food crops are seldom carried and road tranport is steadilyeroding railways' share of total haul.

Table 5: GHANA ROAD NETWORK

Trunk Roads---------- km ----------- Local RoadsRegion Total Bitumen Gravel Total Bitumen Earth/Gravel

Western 1392 270 1122 1278 - 1278

Central 1162 843 319 1271 205 1066

Greater Accra 560 477* 83 289 21 268

Eastern 1720 891 829 1060 - 1060

Volta 1403 525 883 1086 - 1086

Ashanti 1403 882 521 2265 8 2257

Brong Ahafo 1420 401 1019 1358 - 1358

Northern 2575 449 2126 892 - 892

Upper 1347 117 1230 1108 - 1108

Total Ghana 12987 4855 8132 10607 234 10373

* Includes 18.5 km of concrete road.

Source: Ghana Highway Authority.

1/ 'Highway Research Programme' Inception Report Building and Road ResearchInstitute, 1977

ANNEX VPage 15

35. Surface and general maintenance has fallen behind requirements, par-ticularly in the local or feeder road network. An important but unquantifi-able proportion of these roads is reported to be virtually unusable during therains. Even in the dry season their condition deters many transporters andhire charges for those vehicles that do operate fully reflect the scarcity andrisks involved. Obviously cost and availability of transport are supremely im-portant to farmers but of the two, only availability is critical. Transportdifficulties are compounded by increasing average age and lack of spare parts.Spares imports, expressed in current terms, were valued at ¢14.46 million in1975 having totalled ¢11.32 million in 1970. In real terms this representsa decline in available spares values of 40 percent. Under these circumstancesit is hardly surprising that transporters are reluctant to risk their vehicleson unsatisfactory roads.

36. Vehicle fleet statistics have not been maintained adequately since1970 when registration recording was limited to new vehicles and classifica-tion of published data became less precise. Annual changes in fleet sizehave been applying attrition rates equal to the annual averages for 1965-69(+ 10 percent). These rates are extremely low, and particularly so when thedeteriorating spares availability is considered, but their use does show a"best possible" situation. Even under these circumstances the position isalarming.

37. In order to show relative availability of goods vehicles totransport needs, fleet sizes have been indexed by relating number of vehiclesper 100,000 population. Over the period 1960-1975 the total vehicle indexrose irregularly to 118.8 (an average annual growth rate of less than halfthat of the population). During the same period the truck index fell by28.7 percent while the private car index rose by 89.9 percent. The truckposition since 1971 has deteriorated steadily; a fall of 16 percent during thefour subsequent years reducing the index to its lifetime low of 71.3. Carryingcapacity of individual vehicles has probably increased over the period and itcould be argued therefore that the position is not so bad as the indexes show.Against this it must be remembered that not only are the attrition ratesexcessively low but an unspecified yet growing proportion of the truck fleetcomprises military vehicles, unavailable for normal commercial purposes.Overall, when the agricultural nature of the economy is considered and thefact that in rural areas frequency (i.e. number of vehicles) is more importantthan size, the relative performance of the indexes probably reveals the truelevel of government's understanding of produce marketing requirements, as wellas showing the priority which personal transport has received in transportsector investment.

38. Transport rates have been rising sharply particularly in the ruralareas and vary considerably on a tonne/km basis. Only those organizationswith substantial bargaining power, able to confine most of their business tofirst class roads and big trucks or articulated vehicles, have been able tokeep costs within bounds. The most commonly quoted basis is the STC rateequal to ¢0.123 per tonne/km for distances up to 160 km and ¢0.111 pertonne/km thereafter. FDC has had difficulty in obtaining trucks at theserates and is seeking approval to pay up to V0.135 per tonne/km for journeys

ANNEX VPage 16

Table 6: ESTIMATED VEHICLE FLEET - 1960, 1966-1975

Total Vehicle Index 1/ Total Cars 2/ Index 1/ Total Trucks 3/ Index 1/Y2ar at Year End (1960-100) at Year End (1960-100) At Year End (195s-100)

1960 45,893 100.0 20,663 100.0 13,747 100.0

1966 46,711 88.1 26,250 109.9 11,873 74.7

1967 46,771 86.1 27,551 112.6 14,872 91.3

1968 53,601 96.3 29,450 117.5 12,464 74.8

1969 61,207 107.4 34,222 133.3 13,137 76.9

1970 64,251 110.0 42,094 160.1 15,194 84.6

1971 70,296 117.2 44,313 164.1 15,194 84.6

1972 71,458 116.0 43,691 157.6 14,437 78.2

1973 71,962 113.8 43,148 151.5 13,834 73.0

1974 76,103 117.2 44,500 152.1 14,169 72.8

1975 79,261 118.8 45,910 152.8 14,246 71.3

Source: From vehicle registration statistics 1960-69. Thereafter calculatedto be previous closing stock plus non-registrations (for trucks only,imports of trucks and complete chassis) less attrition at averagefor 1965-1969.

1/ Index of vehicles per 100,000 population.

2/ Attrition rate assured to continue at 10 percent to average for 1965-69.

3/ Excludes road tractor trailer units.

ANNEX VPage 17

involving both paved and gravel/earth surfaces. CMB is paying up to 00.117per tonne/km for cocoa, but charging farmers the equivalent of 00.117 pertonne/km for moving cocoa 80 km to Kumasi. In contrast CDB, which distri-butes quantities of seed and fertilizer over a wide area, pays the c4uivalentof 00.035 and 00.049 per tonne/km for guaranteed quantities over an average300 km radius. In the rural areas passengers are preferred freight and up to00.10 per passenger km is charged for short hauls in Brong Ahafo. Any accom-panied goods are rated at up to 00.40 extra per load or bag. In Atebubu ratesup to the equivalent of 01.75 per tonne/km are being charged on short farm tomarket or farm to main road routes. For comparison, financial operating costscalculated by GHA are shown below in Table 7. The full range of financialand economic costs are shown in Tables 17 and 18.

Table 7: TYPICAL FINANCIAL VEHICLE OPERATING COSTS(pessewas/km, September 1976)

Road and Speed Mammy Wagon Goods = tonne/km Goods = tonne/km(5 ton) (16 ton)

Bitumen - 64 kph 18.9 23.5 4.7 62.3 3.9

Gravel - 64 kph 20.1 26.2 5.2 68.4 4.3

Gravel/Earth - 32 kph 29.6 41.9 8.4 119.4 7.5

Source: Ghana Highway Authority.

39. Storage. Most of the official grain storage facilities have beendetailed in para. 28. They are mainly situated in Ashanti and Brong AhafoRegions and for ease of reference have been summarized in Table 19. Apartfrom the milling companies port silos and the silos and flat stores belongingto individual rice mills, private investment in purpose built storage isbelieved to be negligible. Store accommodation used by traders is almostexclusively very informal and short term. Few if any urban or rural marketsprovide storage facilities.

40. Traditional farm stores vary substantially in type, quality andeffectiveness. Losses are reported to be high but the extent to which theseare the result of insect or other damage as opposed to natural drying outis not known. In this respect only maize presents a major storage problemthrough excessive moisture content at harvest time.

ANNEX VPage 18

41. The effects of insufficient storage at all levels are increasedby the periodicity of rural markets and compounded by the unreliability oftransport to and from them. The most obvious and publicised demonstrationof these effects in the short term was the failure of the official maizebuying program in 1974/75. The longer term effects are among the factorswhich have contributed to the current market shortages.

42. As a first step to alleviating the lack of grain stores governmentis embarking on a storage investment program in which UK Technical Assistancefor the first phase has been sought and, it is understood, committed. Pro-ject implementation is scheduled over 1977-81 and involves the constructionof 30,000 tons of new stores (20,500 bulk, 9,500 tons bagged). UK expertsestimate that 12,100 tons of existing storage is suitable for continued usepart from the 10,000 ton capacity Accra silo which may be rehabilitated byCIDA. By 1981, therefore, 42,000 or 52,000 tons of space could be availabledepending on action taken over the Accra silo. The project anticipates thatthe stores would be used by an official (unidentified) intervention agency.Assuming target production increases are achieved and the marketed proportionof the crop remains at around 65-70 percent, the available storage would caterfor 10-12 percent of marketings, percent considerably less than the 25-35percent share that is normally necessary to maintain a positive market influ-ence. The reason for the difference appears to lie in the fact that projectrequirements have been arrived at by applying an annual 5 percent growthrate to the 30,000 tons purchases which consultants estimated would have beennecessary to influence prices during the latter part of the 1973/74 season.

43. Maize is a comparatively new cash crop and estimating futureproduction and marketings is hazardous. Whatever the eventual extent ofstorage necessary new construction under this project can only be beneficial.The extent and degree of benefit will depend on the manner in which it isused and any intervention policy and operations carried out. Storage faci-lities for perishable foodcrops are non-existent. Cold stores at Accra,Cape Coast, Tamale and Wa are being reactivated by FDC but the extent towhich these may help marketers is problematic. Fresh produce has to be innear perfect condition when entered into a chilling process; if it is not theprocess can actually accelerate deterioration.

D. PRICES AND MARKET INTELLIGENCE

44. Food prices are recorded in 170 urban, semi-urban and rural markets.Typical data quality is poor and insufficient attention is given to its collec-tion, transmittal, collation, preservation and dissemination. Lack of suit-able storage and filing systems results in raw data sheets often being lost ormislaid and always difficult to retrieve. Although published national averageprices go back to 1963 basic price lists for individual main markets are onlyavailable from 1970 and then with major gaps. What is available supports thecommonplace contention that seasonal price fluctuations are high and variablebetween commodities and years, while locational price differences vary widelyand inconsistently. Behavior of grain prices is particularly erratic in poor

ANNEX VPage 19

seasons and overall underscores the inelasticity of the market system, whichresults largely from lack of suitable storage and associated crop finance.Price differences in starchy staples tend to reflect market isolation and areprimarily due to localization of supply sources to individual markets, lackof communication and product perishability.

45. Table 8 shows reported wholesale prices of maize and gari in Accra,Kumasi and Sekondi-Takoradi which are connected by rail and paved roads andtherefore should have a high degree of market consonance. The bulk of maizesupplied to Accra and Sekondi Takoradi originates in or passes through Kumasibut the preponderance of gari in each market comes from a smaller radius.Both articles are important foods although gari constitutes a far larger shareof the diet in Sekondi-Takoradi than in Kumasi. The results of simple priceanalysis are contained in Table 9. These show a reasonable but steadily wor-sening relationship between maize prices, where the average differences greatlyexceed the transport differentials. The number of opposite price movementstends to endorse the market insularity hypothesis, but could reflect a transi-tory local production influence. The wide annual price ranges clearly demon-strate the potential benefits from adequate storage. The results for gari in-dicate an even greater market insularity, as might be expected. Reservationsabout the quality of the data must be repeated and the results of the analysisshould only be regarded as lending weight to largely intuitive conclusions.

Table 8: MAIZE: MONTHLY NEAN PRICES AND STANDARD DEVIATIONS 1973-1976

1973 1974 1975 1976

Mean S.D. Mean S.D. Mean S.D. Mean S.D.¢ tonne ¢ tonne ¢ tonne ¢ tonne

Accra 177.0 25.6 197.0 24.4 276.6 39.0 539.4 156.4

Kumasi 171.0 43.6 163.6 27.2 213.9 43.7 475.9 139.6

Sekondi-Takoradi 209.9 36.0 - - 246.2 44.4 528.1 151.3

Source: Table 20

Table 9: MAIZE: ANNUAL PRICE RANGES AS PERCENTAGE OF ANNUAL LOW

1973 1974 1975 1976

Accra 59 49 54 140

Kumasi 95 62 71 136

Sekondi Takoradi 58 - 74 143

Source: Table 21

ANNEX VPage 20

46. The government market intelligence as operated by the Economic Re-search and Planning Service (ERPS) in NOA has been subject to a number ofchanges and "expert" attention in its lifetime, but after fifteen years theservice cannot provide timely, practical and useful market intelligence. Lackof relevant information has contributed to the difficulties of the presentmarket situation and to some extent may even lie at the root of them. There-fore the service should redirect its efforts to practical essentials. The ne-cessary reappraisal will include:

- identifying main production areas for basic staples;

- identifying flow channels from these areas to major demand centers;

- identifying prime assembly/wholesale markets within these channels.

47. Reappraisal will result in a contraction in the scope of activities,which would allow greater concentration of resources and permit timely produc-tion and dissemination of the following basic information:

(a) Production estimates before, during and after the growingseason;

(b) Prices and trends for main staples in the prime supply channels;

(c) Road condition and area accessibility reports.

The main ERPS effort would be devoted to (b) and obtaining, checking andcollating (a) and (c) which should originate in the extension service.Production estimates would not be required more than monthly, while fort-nightly intervals on prices would be quite acceptable, but the informationmust be available and publicised promptly. If the service cannot operate on arapid, regular and reliable basis it will serve no purpose and should beclosed down. Removing coverage from some urban and rural markets may be seenas a step back. The present extended intelligence system does not work,however, and thus serves no useful purpose. Only by concentrating on essen-tials is there any hope of building a useful foundation from which expansionmay be possible in the future.

48. The problems of price recording are compounded by absence of stand-ardization in weights and measures. This is examplified by the retail pricesreported by Bank of Ghana and ERPS which for similar markets and periods areso different as to make both useless. This is a common and long standing prob-lem which must be tackled without delay.

INPUT SUPPLY AND DISTRIBUTION

49. Fertilizers account for the bulk of seasonal inputs; purchasing iscontrolled by Ghana National Procurement Agency, (GNPA) a government body, anddistribution by MOA, who also handled purchasing until end 1976. Imports haverisen sharply during the present decade viz:

ANNEX VPage 21

Table 10: FERTILIZER IMPORTS

Tonnes

1971 99801972 158901973 297301974 124701975 233601976 696301977 77950 (target)

Consumption, although rapidly accelerating, has not matched imports and 17.903tonnes were carried over into the 1977 season. Most fertilizers are consumedin the Northern Region where 1976 sales reached 27,411 tonnes -- more than2.5 times the sales for 1975 and 10 times those for 1971.

50. Fertilizer prices were subsidized by about 85 percent through 1976but past benefits were confined to relatively few farmers and the subsidy isnow being reduced progressively. The difficulties experienced by many smallfarmers in obtaining timely supplies were mainly due to late arrivals andpoor distribution, unduly bureaucratic procedures and unbridled competitionfrom larger commercial users. Despite the remarkable sales upsurge procure-ment and distribution leaves much to be desired. It is in fact probable thatthe highly subsidized price resulted in a proportion of the sales beinggenerated by an effective private redistribution service operating acrossnational borders. The possibilities and effects of such a situation areillustrated by the fact that in March 1977 the village market price being paidby small farmers within 35 km of Tamale was 09.00 per bag (official price02.00).

51. Fertilizer imports must arrive in time for distribution to be com-pleted not later than the beginning of the planting season (March/April inthe South, May/June in the North). In 1976 arrivals of carrying vesselsstarted in February and ran through June. In 1977 the first arrivals werenot expected before end March. Distribution from Tema is a chronic problemthat will only be partially alleviated by the GWC barge service. It is tobe hoped that procurement and primary distribution will be improved by GNPAwhich is being assisted in its work by a professional start up team from CrownAgents. The team includes a transport and distribution specialist.

52. Fertilizer sales are made for cash from Regional and District agri-cultural offices. These constitute a very small selling base from which toservice the mass of small farmers. Sales procedures vary but all tend tobe beset by inappropriate bureaucratic impediments. In the Northern Regionfor example there are only 12 selling points including the main depot, yetpotential purchasers have to get official authorization from the regionalagricultural officer (RAO) in Tamale before they can obtain any fertilizer.The effect of such a rule on a small farmer in, say, Damongo can be easilyimagined. This powerful disincentive process was introduced to prevent

ANNEX VPage 22

subsidy abuse; apart from removing the subsidy, an effective measure would beto enlarge the number of scales points. Such a step would also increaseconsumption and improve utilization. For organizational and logistic reasonssuch a step will probably not be possible while MOA has sole responsibilityfor distribution.

53. The main reasons advanced for MOA retaining fertilizer distributionrather than handing it to the commercial sector are: a) the degree of sub-sidy; b) the standard price; c) the extensive coverage required. None ofthese is valid. They ignore the fact that actual distribution costs are in-curred by MOA whatever the subsidy and whatever the price. Also, commercehas a more extensive network than government whose distribution costs areprobably higher and returns worse than would be the case for companies al-ready engaged in distributive business, while MOA stockholding practicesfall some way below accepted commercial norms. If commercial organizationswere to be appointed to act as agents for MOA or any other body it would takeno great accounting system or audit effort to ensure that this function wasefficiently and honestly discharged. For the bulk of the companies whichcould be involved fertilizer would be an attractive item and custom raiserin rural stores.

54. In their efforts to improve fertilizer procurement and distributiongovernment invited TVA to study Ghana's needs in this respect. As a resultof these studies government established the Ghana Fertilizer Company (GFC) in1975. It was intended that GFC would: develop an advance purchasing systemfor bulk fertilizers; blend and bag such fertilizers as appropriate; ensuretimely and orderly distribution of finished product. GFC was seen as a com-ponent part of the USAID assisted MIDAS Project, with share capital owned 60percent by government and 40 percent by a technically competent foreignpartner. Such a partner has still to be selected and GFC is non-operationalas yet although the Board of Directors has been appointed and some staffselected. Bulk handling and bagging equipment was purchased under the USAIDloan, and a similarly financed shipment of bulk fertilizer arranged during thesecond half of 1976. This appears to have been premature and a resoundingfailure. Bulk discharge proved extremely arduous and inordinately timeconsuming. The bagging equipment could not be operated at stated capacitydespite the efforts of technical assistance personnel, product losses werehigh and demurrage staggering. These traumatic experiences have deceleratedproject momentum in some degree. Shortlisting of potentially suitable foreignpartners is continuing but the precise future role of GFC is still underconsideration. As at March 1977 no change from the present GNPA/MOA procure-ment and distribution process was being planned.

55. Seeds and insecticides comprise the other major seasonal inputs,apart from credit. Seeds are distributed similarly to fertilizers andsimilar criticisms apply; insecticides procurement and distribution remainsin the hands of private companies (CDB for smallholder cotton) and avail-ability is constrained by import license considerations rather than distri-butional problems. Although utilization is far below potential supplies areboth inadequate and interrupted. This is particularly damaging to cropslike tobacco and cotton where build ups of disease and insect populationscan have long lasting repercussions.

ANNEX VPage 23

JUDGEMENT AND CONCLUSIONS

56. Market demand for cereals and starchy staples is roundly 1.9 milliontonnes annually. In 1960 it was one million tonnes, by 1985 it is expectedto exceed 2.6 millions. So far the traditional marketing system has beenable to satisfy these sharply rising requirements with minimal long terminvestment but at ever increasing cost. This significant achievementamid rather static infrastructural development delayed the effects of aconcurrent lack of critical system appraisal and improvement by successivegovernments. In consequence the causes of the presently acute food supplyand marketing difficulties are far deeper rooted than would be the case ifthe difficulties were simply the result of two climatically poor seasons.The short term emergency measures for crop extraction now being taken bygovernment may alleviate the situation in some degree, but permanent solu-tions require comprehensive remedial action which needs to be initiatedwithout delay. There are no easy answers. The system may have reached thestate where it cannot expand any further without massive infrastructuraldevelopment, which must take time. The seasonality of agriculture and thenatural lag in supply responses means that deterioration in the marketsupply position could well continue over the short term, regardless ofclimatic conditions or the introduction of infrastructural improvements.

57. The present problems primarily stem from past omissions and failuresby government. The private sector, of course, is by no means blameless, butthe natural reaction of traders is to seek profit from the environment inwhich they operate. More confidence must be created and education providedif participants in this sector are to accept that these profits should begenerated increasingly from their own long term capital commitment tomarketing and not so exclusively from seasonal activity.

Specifically, the government failed to:

- develop and maintain the road network or to encouragecommunal maintenance in rural areas;

- permit an adequate build up of the transport fleet tomatch anticipated requirements;

- establish an appropriate market intelligence service;.

- adhere to and implement official price and interventionpolicies once these had been announced;

- encourage or ensure the orderly development ofthe marketing system through providing necessaryfacilities and education;

The resulting deficiencies in infrastructure and environment constitutepositive disincentives to sustained increases in agricultural production.

ANNEX VPage 24

Roads and Transport

58. Road conditions have long been recognized as a marketing constraint.GHA is receiving assistance under the Second Highway Project for routinemaintenance of the main and feeder road network. The overall program orits rate of implementation does not seem adequate, however. Extreme dif-ficulty of access has been increasingly reported over the years while ina number of cases surfaces and surrounds have gone beyond the 'routinemaintenance' stage. There appears to be a need for a crash rehabilitation orconstruction program in many major producing arrears. A proportion of thiscould and should be on a conditional self-help basis for farm and local accessroads. Under such schemes GHA would provide the technical input such ascurrent work and grading but this would be conditional on the communityproviding the labor.

59. The road situation is exacerbated by the shortage of vehicles.Road conditions in turn increase the depreciation of the transport fleet.With spare parts increasingly hard to obtain the roadworthiness of this fleetis already very low. In any case on even the most optimistic attrition rateassumptions truck numbers are steadily declining against population. Thehigh rates charged and paid for transport, which greatly exceed the economiccosts, indicate the measure of the problem which is further exemplifiedby the fact that military assistance was required to move the below averagecocoa crop.

60. The feeder road study being financed under the Second Highway Projectshould provide a guide to the size and composition of the fleet required forproduce movement. This will not be ready for some years however and actionis required now. Therefore, government should ease existing constraintsby lifting import controls on spare parts and allowing substantial increasesin vehicle imports. These should be concentrated in the smaller size range(five to ten ton) which is better able to penetrate rural areas. Governmentshould also act to tighten vehicle licensing regulations to prohibit vehicleswith high axle loadings. The unnecessary damage caused by these vehiclescreates substantial extra maintenance expenses, disrupts repair programs andresults in increased wear and tear on other road users.

Market Intelligence

61. It is impossible to influence production, attempt to stabilize themarket or set minimum prices without adequate market information. All thesethings have been tried, with predictable results. It is of the utmostimportance that a pertinent intelligence service should be establishedwithout delay. Government must be brutally pragmatic in this, accept thatcollection of some apparently desirable data may well have to be ignored,and concentrate on obtaining basic essentials accurately and quickly.Until this is achieved there will continue to be no basis for decisions.A great deal of care must be exercised in disseminating seasonal or marketinformation. This should not be broadcast or published except under suchcircumstances or in such a manner as to ensure that those who receive itrealize its purpose and limitations.

ANNEX VPage 25

Market Intervention

62. Official intervention has been intended to influence both producerand consumer prices. It has been sporadic and, for domestically producedfoodstuffs largely ineffective. Where intervention has been by FDC at afixed minimum price ineffectiveness has been primarily due to lack of marketintelligence; lack of market coverage; lack of storage; poor quality control;and insufficient finance. FDC has never been able to influence consumerprices due to lack of market share and coverage where rice is concerned. RMUactivities and associated return on fixed investment have varied dramatically.During bountiful seasons RMU has bought a large proportion of the crop andprovided a floor. At other times RMU has been forced into virtual idleness.

63. Pricing policy considerations are covered fully in Annex VII. Froman operational point of view however, effective market intervention is impos-sible without adequate and properly sited storage, assured finance for pur-chases, a credible and defined policy concerning stock purpose and associatedfinancial considerations, market coverage and, above all, market intelligence.These conditions do not exist in Ghana and intervention should not be attempteduntil it does. Even when these conditions are achieved it must be question-able whether a large scale government organization with the inevitable highfixed costs is necessary to implement an intervention policy should one bedecided on. If the prime criterion of an efficient intelligence service ismet then any intervention policy could probably be implemented effectivelythrough an agency or LBA system, backed up if necessary by a small cadre ofmobile buying teams. Such an approach would have the benefit of governmentand private traders becoming more involved with each other, which is highlydesirable. In short, FDC as presently conceived serves little if any purposeas a market force and, given the store management capability of GWC, there islittle to commend continuation of it's existing role. There may be a needfor increased government activity in the urban market areas in which aderivation of FDC could play an important part.

Market Facilities

64. Market facilities are inadequate at all levels. As such theypromote inefficiency, generate undesirable practices and provide powerfularguments to those elements of the private sector who are determined toresist change. Many rural assembly and wholesale markets require formalizingand/or rebuilding. There is complete lack of storage at all these sites aswell as in urban wholesale markets. Although markets are the responsibilityof local councils, Regional Development Corporations could play an increasing-ly important role, particularly in the storage function. Here, for instance,they could own and operate multi-purpose stores perhaps letting out smallunits on a daily basis to farmers or itinerant traders, as well as providingfully secure larger facilities for bigger traders. Such stores would alsoprovide a basis for bonded warehousing systems, suitable for operating inconjunction with ADB and commercial and rural banks once an adequate intel-ligence system is operating. Although it is envisaged that storage would beperformed on an "as agents" basis, the development of properly planned storesand procedures at this level of the marketing chain provides a basis for the

ANNEX VPage 26

introduction of a produce grading system with certain minimum standards to bemet before goods are accepted for storage. Scales would also be mandatoryfor recording purposes and their use would lead to wider acceptance of weightas a unit of trade. Storage at wholesale would constitute a valuable nationalresource and as such its disposition and overall planning should be carriedout as part of a total storage program of which the elements contained in theproposed UK-aided project could form the first stage.

65. Marketing at retail level needs complete reappraisal. Rapid growthin the consumer section of the economy means that many of the existing marketlayouts and situations may not be appropriate to current or future needs normatch up to vitally important requirements of hygiene and space. There couldbe a case for intermediate covered markets bridging the gap between the tra-ditional and the sophisticated supermarket. A rounded development of thestill unused Kaneshie market in Accra might prove appropriate. It is in thisarea of urban distribution and marketing that FDC might play an important de-velopment role through being the implementing agent for suitably designedgovernment sponsored market projects.

66. Operation and licensing of all retail markets needs improvement andsteps should be taken to exploit the advantages of formalized markets by mak-ing the use of standard measures compulsory. Four or five measures of dif-ferent capacity would cover most if not all that would be required to coverretail sales of grains, spices and liquids. Measures would need to be offi-cially stamped and the property of individual sellers. Their purchasescould be offset against licence fees.

Rapport with the Private Sector

67. There can be little doubt that the present supply position is par-tially due to marketing risk constraints magnified by the experiences ofearlier seasons. Government's attempts to meet these effects head on bychanging the role of FDC and creating an 'action' Marketing Unit in MOA ig-nores many of the causes of present difficulties as well as the resourcesand capabilities of the private sector. The apparent past failures of theprivate sector from which many of the current difficulties are held to stem,are largely due to government's own failure to provide a suitable infrastruc-tural and legislative environment that permitted the system to functionproperly. The inefficient high cost nature of the limited operations of FDCand, to a lesser extent RMU, reveal the shallowness of government marketingresource and the limited managerial ability available to it.

68. Taken in isolation the operations of government marketing teams canonly affect a small proportion of the population. The magnitude and extentof the task would ensure a very high unit cost, however. Government musttherefore seek to establish a far better basis of mutual understanding withthe private sector and create a physical and legislative atmosphere whichencourages orderly improvement and development of this substantial nationalasset. Part of the problem in establishing a basis for understanding is thecellular and poorly connected structure of the marketing system and the

ANNEX VPage 27

large number of participants. It is thus very difficult if not impossibleto meet with fully representative trade bodies at regional level, let alonenationally. This situation should improve, however, if the essential de-velopments already outlined are implemented. These will lift a number ofconstraints and force the private traders into a more homogeneous body.There is no sound reason why private traders cannot be used to operate offi-cial pricing policies; the system is widely employed in cocoa marketing inGhana and for other crops elsewhere. Traders can become, and should be en-couraged to become, focal points for marketing groups. Provision of suitableofficially sponsored storage and encouraging private projects will help re-duce the marketing risks and bring greater price coherence. It is only byreducing risk through improving infrastructure that market performance canbe improved. Above all there is the need for regular reliable and speedy in-formation.

69. Finally it is important that farmers' market incentives should berestored. By attempting to overcome infrastructural defects and over-competeagainst traders, government bodies, particularly FDC and GDB, have erodedmarket incentives by providing more and more marketing services at farm gate,while still paying 'regular' market prices. This is a price inflatingpractice but, perhaps worse, through negating the higher prices at the nextmarket level it removes the incentive for farmers to perform a more positivemarketing function. It is important that marketing services provided tofarmers which increase produce value, such as maize shelling, should becharged at not less than cost. Alternatively, the price paid for that pro-duce should reflect services provided.

APPENDIX

POPULATION PROJECTIONS

1. Future population projections have been made from the published1970 census figures and assume an overall annual growth rate of 2.7 percentfor 1970-1975, 3.0 percent thereafter. In the National Development Plan,1975-1980, 2.7 percent is used throughout. Estimates of regional populationsreflect observed rates of change between 1960 and 1970. The resultant ratiosof regional to total population are therefore a simple extrapolation ofintercensal changes adjusted proportionally as necessary to sum to unity.

2. 1970 urban population accounted for only 28.9 percent of totalpopulation, reflecting an annual growth of about 4.8 percent since 1960. Thisrate is believed to be increasing sharply and figures of 5.3 percent and 5.5percent have been used through 1975 and 1985 respectively.

3. Crude activity rates have been established regionally and reflectthe proportion of economically active persons (employed + unemployed) inthe regional populations. Future Labor Force estimates assume that crudeactivity will remain constant at 1970 levels (adjusted for Upper and NorthernRegions to allow for seasonality). Agricultural Labor Force has been esti-mated on the assumption that the rate of change observed between 1960 and 1970will continue, i.e. the Agricultural Labor Force is a declining proportion ofTotal Labor Force.

4. The Agricultural Population has been calculated on the assumptionthat its proportion in the total population is equal to the proportion ofAgricultural Labor Force in Total Labor Force.

ANNEX VTable 11

ESTIMATED RURAL, URBAN AND AGRICULTURAL POPULATION 1970-1985

REGION 1970 1973 1975 1980 1985

WESTERN 770 825 862 973 1092Urban 207 229 245 292 347Rural 563 596 617 681 745Ag. Population 426 444 460 494 530

CENTRAL 890 941 972 1075 1178Urban 259 279 293 333 376Rural 631 662 679 742 802Ag. Population 573 593 607 641 681

GREATER ACCRA 851 1009 1128 1518 2042Urban 727 884 1002 1390 1912Rural 124 125 126 128 130Ag. Population 81 88 98 115 135

EASTERN 1262 1324 1369 1492 1620Urban 311 349 376 453 547Rural 951 975 993 1039 1073Ag. Population 716 741 766 814 872

VOLTA 947 1012 1056 1186 1325Urban 151 172 188 236 294Rural 796 840 868 950 1031Ag. Population 570 603 629 691 762

ASHANTI 1482 1624 1725 2032 2388Urban 441 512 566 727 933Rural 1041 1112 1159 1305 1450Ag. Population 866 935 987 1121 1288

BRONG AHAFO 766 833 881 1033 1205Urban 169 205 232 321 438Rural 597 628 649 712 767Ag. Population 593 633 669 757 864

NORTHERN 728 803 857 1015 1197Urban 148 185 216 315 457Rural 580 618 641 700 740Ag. Population 560 609 649 743 859

UPPER 863 901 929 1013 1100Urban 61 73 85 119 167Rural 802 828 844 894 933Ag. Population 615 630 646 677 718

GHANA 8559 9272 9779 11337 13142Urban 2474 2888 3202 4186 5471Rural 6085 6384 6576 7151 7671Ag. Population 5000 5276 5511 6053 6709

Source: Derived from Population Census 1960 and 1970

TOTAL AND AGRICULTURAL LABOR FORCE 1970/85('000)

Rates of GrowthRegion 1970 1973 1975 1980 1985 1970-75 1975-85

Western 770 825 862 973 1,092 2.3 2.4Total Labor Force 331 355 371 418 470 2.3 2.4Agricultural Labor Force 183 191 198 210 228 1.6 1.4

Central 890 941 972 1,075 1,178 1.8 1.9Total Labor Force 371 392 405 448 491 1.8 1.9Agricultural Labor Force 239 247 253 267 284 1.2 1.2

Greater Accra 851 1,009 1,128 1,518 2,042 5.8 6.1Total Labor Force 366 434 485 653 879 5.8 6.1Agricultural Labor Force 35 38 42 47 58 3.7 3.3

Eastern 1,262 1,324 1,369 1,492 1,620 1.6 1.7Total Labor Force 502 52527 545 594 645 1.6 1.7Agricultural Labor Force 285 295 305 324 347 1.4 1.3

Volta 947 1,012 1,056 1,186 1,325 2.2 2.3Total Labor Force 377 403 420 472 527 2.2 2.3Agricultural Labor Force 227 240 250 275 303 1.9 2.0

Ashanti 1,482 1,624 1,725 2,032 2,383 3.1 3.3Total Labor Force 585 641 680 801 940 3.1 3.3Agricultural Labor Force 342 369 389 442 508 2.6 2.7

Brong Ahafo 766 833 881 1,033 1,205 2.9 3.2Total Labor Force 314 341 361 423 494 2.9 3.2Agricultural Labor Force 243 259 274 310 354 2.4 2.6

Northern 728 803 857 1,015 1,197 3.3 3.4Total Labor Force 273 302 322 381 4S0 3.3 3.4Agricultural Labor Force 210 229 244 279 323 3.0 2.9

Upper 863 901 929 1,013 1,100 1.5 1.7 > >Total Labor Force 341 356 368 401 435 1.5 1.7Agricultural Labor Force 243 249 256 268 284 1.0 1.0 C c

Ghana 8,559 9,272 9,779 11,337 13,142 2.7 3.0

Total Labor Force 3,460 3,751 3,957 4,591 5,331 2.7 3.0Agricultural Labor Force 2,007 2,117 2,211 2,422 2,689 2.0 2.0

ANNEX VTable~ 13

COMPOSITION OF DEMAND ZONES

P O P U L A T I O N

Zone Region Urban Rural Agric. 197C 1973 1980 1985% ^ /.'. 1000 '000 '000 1000

Upper 100 100 100Northern 100 100 100

NORTH 1591 1704 2028 2297

of which Market Dependent % 26 29 30 31

'000 416 465 608 720

Brong Ahafo 100 100 100Ashanti 100 100 100Western 45 95 95Central 50 90 90Eastern 95 95 95Volta 40 50 50

SOUTH 5230 5589 6617 7458

of which Market Dependent % 36 37 39 4C

°000 1885 2059 2569 2981

Greater Accra 100 100 100Westerh 55 5 5Central 50 10 10Eastern 5 5 5Volta 60 50 50

COAST 1738 1979 2692 3387

of which 'liIet Lependent % 72 74 .o 81'000 13,8 1472 2109 2732

TOTAL Market Dependent % 42 43 47 49'000 3559 3996 5284 6433

ESTIMATED ANNUAL FOOD CONSUMPTION, 1970-1973-

Per Caput Consumption (as purchased)

Daily Annual Total Imported

Calories ProteinK Gms K '000 tons %

Cereals: 607 16.46 63.7 590 -

Maize 309 8.50 31.3 290 1

Millet/Guinea Corn 164 4.74 17.6 163 _

Milled Rice 64 1.23 6.5 60 70

Wheat Flour 2 70 1.99 7.3 68 100

Other 10 - 1.0 9 100

Starchy Staples: 1255 12.02 352.1 3265 -

Cassava 6C0 2.75 146.0 1354 -

Yam 145 2.79 50.9 472 -

Cocoyam 240 4.37 78.2 725 -

Plantain 270 2.11 77.0 714 -

Sugarcane and Sugar Preparation: 112 - 10.1 94 90

Nuts and Legumes: 72 3.01 9.9 92 -

Groundnuts 55 2.49 6.1 -

Coconuts 10 0.12 3.0

Other 7 0.40 0.8 -

Vegetables 12 0.49 19.9 185 1

Fruits 15 0.15 15.6 145 -

Meat and Meat Products 20 1.49 3.8 35 40

Eggs 1 0.08 0.2 2 -

Fish 75 13.68 26.8 248 30

Milk, fish equivalent 15 0.76 7.8 72 100

Oil Palm Fruits 35 0.58 63.9 59 -

Oils, Margarine, Butter 3/ 105 -_,__ 4.4 41 20 H >

2324 48.72 578,2

1/ Before Preparation losses and waste 2/ Flour Equivalents 3/ Food use only

Source: Mission Estimates and "The Future Demand for Food in Ghana" UNDP/FAO Agricultural

Planning Project GHA 72/007. Project Field Document No. 1, February 1976

1/ESTIMATED FQQD CQNSUMPTIQN 1973 AND PROJECTIONS 1980-1985

----------------------------------------- ' 000 Tons --------------------------------------------

1973 1980 1985

Commodity Gro North South Coast Ghana North South Coast Ghana North South Coast Ghana

Cereals 270 197 123 590 321 233 168 722 364 270 211 845

of which Maize 75 149 66 290 89 176 90 355 101 204 113 418

Guinea Corn/Millet 162 163 193 194 219 220

Milled Rice 17 11 32 60 20 13 44 77 23 15 55 93

Wheat flour 2/ 68 91 112

Starchy Staples 85 2570 610 3265 101 3040 832 3973 114 3429 1044 4587

of which Cassava 6 979 369 1354 7 1158 503 1668 8 1306 631 1945

Plantain 3 542 169 714 3 641 230 874 4 723 289 1016

Grain Legumes. Coconuts 37 40 15 92 44 47 20 1ll 50 53 25 128

Fruits and Vegetables 90 165 75 330 107 195 102 404 121 220 128 469

Meat and Animal Products 3 ~ 6 21 8 35 7 25 11 43 8 28 14 50

Milk 9 43 20 72 11 51 27 89 12 58 34 104

Fish 16 170 62 248 19 201 85 305 22 227 107 356

Sugar 12 59 24 95 14 70 33 117 16 79 41 136

Oils and Fats 4/ 9 72 19 100 11 85 26 122 13 96 34 143

Source: Tables 11 and 14 . Assumes no change in annual per capita demand.

1/ "As purchased" basis i.e. net of all losses between field and retail and excluding animal feed.

2/ Expressed as flour.

3/ Including eggs, excluding milk.

4/ Includes palm fruits.

>J

1/ESTIMATED MARKET DEMAND FOR FOOD 1973-1985 (000 tons)

Zone 1973 1985Food Group North South Coast Ghana North South Coast Ghana Increase

________ 1973 -85

Cereals 73 73 91 237 113 108 171 392 155of which: Maize 2/ 20 55 49 124 31 82 92 205 81

Guinea Corn/Millet 44 - 44 68 68 24

Starchy Staples 23 951 451 1425 35 1372 846 2253 828of which: Cassava 2 362 273 637 2 522 511 1035 398

Plantain 1 200 125 326 1 289 234 524 198Grain Legumes 10 15 11 36 16 21 20 57 21

Fruits and Vegetables 24 61 56 141 38 88 104 230 89Meat and Animal Products 3/ 2 8 6 16 3 11 11 25 9Milk 2 16 15 33 4 23 28 55 22Fish 4 63 46 113 7 91 87 185 72Sugar 3 22 18 43 5 32 33 70 27Oils and Fats 4/ 2 27 14 43 4 38 28 70 27

1/ On as purchased basis.2/ Exluding Maize for animal feed.3/ Including eggs, excluding milk.4/ Includes palm fruits.

(DX

0'c

BASE FINANCIAL VEHICL3 OPERATING COSTS, BITUIEN 60 MPH(p/mile)

V3EIICLE OPM.ATING COSTS CAR TAXI MINT- 191A'MfY IIED)IU LARGE GOODS GOODS GOODS GOODS TITTNER TANKER

Depreciation and Finance 13.57 10.17 6.02 5.72 11.93 41.46 5.83 13.83 21.12 30.23 43.01 35.66

Tyres and Tubes 1.23 1.23 1.40 3.43 5.45 6.35 5.45 10.55 10.08 15.40 19.8 15-4°

iIaintenance and Repairs 7.29 3.64 2.81 3.05 13.17 34.36 7.67 17.29 22.83 32.68 41.84 32.16

iuel 7.80 7.92 8.22 9.15 8.17 9.80 8.17 9.80 12.02 18.87 23.15 13.48

Oil 0.23 0.24 0.33 o.60 0.79 o.96 0.79 o.96 1.17 1.54 2.26 1.31

Driver and Assistant - 1.11 1.87 3.59 4.42 5.03 3.24 4.31 4.74 5.27 5.97 4.69

Insurance 2.99 0.83 0.88 2.88 2.38 7.88 1.79 6.43 8.74 18.21 30.47 23.97

Roadworthiness Cert. 0.14 0.03 0.03 0.06 0.04 0.04 0.10 0.11 0.10 0.10 0.11 0.09

Overheads - - - - 3.99 13.52 2.49 5.91 8.80 12.60 18.23 14.54

TOTAL 33.25 25.17 21.56 28.48 50.M3 119.40 35.53 69.19 89.68 134.90 184.84 141.30

NOTE: Based on September, 1976 prices.

SCURCE: Ghana Highway Authority

<1

ECONOMIC VEHICL OPERATING COSTS SEP1EMBER 1976

ROAD DESCRIPTION CAR TAXI NI- PICK- ld=1Ty MEDIU1 LARG3 GOCDS GOODS GOODS GOODS TIMBER TANKERCAAR STAXI BUS UP WAGON BUS BUS (5 TON) (10 TON) (16 TON) (25 TON) (35 TON) (6,000 GAL.)

Bitumen, 60 mph 37.4 28.1 25.0 19.7 36.3 61.4 139.5 44.6 81.5 103.8 149.4 207.3 156.1

Bitumen, 50 mph 37.0 27.5 24-5 19.3 36.3 62.6 145.1 44.6 81.5 106.9 155.4 21747 162.3

Bitumen, 40 mph 38.1 28.4 25.5 20.1 37.4 66.3 154.8 45.9 83.9 111.1 162.8 230.1 171.7

Bitumen, 30 mph 41-5 31.2 27.8 21.9 40.7 73.7 174.4 50.7 91.3 123.5 180.8 255.0 190.4

Bitumen, 20 mph 46.8 35.7. 31.8 25.0 47.6 89.0 213.4 58.8 106.0 144.3 212.1 300.6 224.8

Gravel, 50 mph 37.8 28.1 25.0 19.7 36.7 65.1 150.7 45.9 84.8 111.1 161.4 226.0 168.6

Gravel, 40 mph 41.5 30.9 27.5 21.7 40.3 73.7 171.6 51.6 94.5 123.5 182.3 252.9 188.9

Gravel/Earth, 30mph 48.6 35.4 31.8 25.0 46.8 91.4 221.8 62.0 116.5 156.7 233.1 329.6 245.1

Gravel/Earth, 20mph 62.8 44.7 39.8 31.3 58.4 122.8 312.5 80.8 154.9 213.8 322.7 474.7 341.9

NOTES: (a) Estimates include interest at 10% and a foreign exchange premium of 6O0%

(b) Standard vehicle speed relationships are assumed as per 1975 VOC Mannual

Source: Ghana Highway Authority

<i20 >

ANNEX VEXISTING AND PROPOSED GRAIN STORAGE Table 19

Region Present Availability '000 tons Future AvailabilityBulk 1/ Bag Suitability Location Existing Bulk Bag New Bulk Bag .Total

19631

WJESTERNAwaso 1,000 Fair Ideal - 1,000 500 500 2,000Dunkwa 500 Fair Good - 500 - - 500

Takoradi - -- - 1,000 1,000 2,000Takoradi-

CENTRALAgon Swedon 100 Unsuitable - -Breman Esikula 125 Unsuitable - -Assin Foso 220 Unsuitable - -Cape Coast - - - - 1,000 1,000

ACCRAGFDC Headquarters

- (1,000) 1,000 1,000GFDC Headquarters - - (11,000)

EASTERNNkawkaw 400 Fair Ideal - 400 2,000 1,000 3,400Kwahu Tafo 170 Unsuitable - -

VOLTAVakpo 1,600 Good Good - 1,600 - - 1,600Ho 1,000 1,000 2,000

ASHANTIAbnakwa 2,000 Good CMB - -Hampong 3,000 Fair Poor - _Sekodumasi 4,000 Fair Difficult - -Ejura 4,000 1,000 Ejura Farms only 4,000 1,000 5,000Bokwai 500 Fair Good 500 Short term only 500Afianso - - 4,000 1,000 5,000Kumasi - - 4,000 1,000 5,000

BRONG AHAFOBechew 1,000 Ideal CMB- 1,000 1,000Goaso 500 Unsuitable -Nkovanza 500 Good Good - 500 500Sunyani 4,000 Fair Ideal - - 4,000 1,000 5,000Techiman 5,000 Fair Good -' 4,000 1,000 5,000Wenchi 1,600 Good Good - 1,600 1,600

NORTHERNDamongo 200 UnsuitableTamale 2,250 26,500 Fair Good (25,500 t. temporary) 2,250Yendi 3,100 Good Fair No proposals at this stage l-

UpperBawku 600 Good GoodBolgakanga 12,000 Fair Good (9,500 t. temporary)Wa 600 Good Good

GHANA 20,000 542215 4,000 8,100 20,500-2/9_5002/42 1i002

(30.500)

1/ GFDC has the parts of four Butler Silos (2 x 5000 t., 2 x 3,000 t.) which, because of their size areprobably too large for maize but could be suitable for paddy.

2/ Excluding paddy storage in Northern and Upper Regions.

A-070 A 608 ,0 SA-1i/:7 - 01Sl 8

J-an..ry 'eray Mac 0

I May Icf y f cc ScyIc-bor Octber N-1-br cc-b-, M-ar S9oD-i-i.. R.a,,,,

1970 M.i-o A--r 31I7 7 412 589 29 70 073 606 633 - 539.4 9. 4.kcn,aci 0~~ ~ ~~~~ ~~~~78 322 33 37 943 620 65 584 980 470 4 75.9 1396 3071.0SlTako_di - 376 380 301 661 71I 721 503 501 599 -56: 528.1 151.3 4.10

Ca-S A-cc 656 789 770 709 888 926 1,0b 1,148 1,201 1,287 - -9b.0 027.0 61.0:...... 404 098 639 - 91 802 S70 073 815 1,21 I 71.117 182. 603.SI'T.ko-di - 840 6,60 933 887 735 1,0 90 955 955 955 976 900.1 193.17 510.00

1975 Male- A-cer 009 217 286 292 321 31 2 319 261 240 209 317 794 270.6 39.8 n12.0KO,o,t, 103 190 107 020 257 280 9 154 150 700 035 250 21~3.9 4 3. 13..S Tabc_a7i 190 203 205 200 747 7930 331 248 250 255 29 7 798 246.2 00.0 14'1 .0

Sari Ocr 98 316 265 310 419 423 433 078 487 565 573 603 436. 110. 338.8Oon,aal ~ ~ ~~~~ ~~~~~- 5104 66 367 30 40 79 304 309 3338478 074 102.0 353.0SITakr 0839 31323 332 32 437 51 51 514 504 590 021.3 108.629.

1974 Mciac -cc 210 230 230 200 210 210 1 75 135 160 188 1 97 199 191.-0 00.4 76.0KI, 11 ~~~~~184 17 175 188 185 199 185 195 823 100 101 135 103.6 03.2 75.0

Aar ,-.c 2 65 243 213 25 7 - 244 309 265 178 199 2795 29 7 251.4 41.8 131.0KIIII, ~~280 301 345 360 404 367 ----.

1973 M0cci- cc 167 198 18 160 180 15276 16 2 132 210 210 210 177.8 25.6 78.1Ooa.. 150 150 153 230 22 234 314 123 12 48 - 1397. 43.6 14.0S/Tak6...di 168 180 212 254 2540 764 551 07318 207 .18 209.9 36.0 97.0

247 208 2512 250 21 2326 2 79 346 282 2 79 2757 260.3 36.013.Kont77279 230 78 279 351 342 296 310 299 - 3248. 3.5 116.0SITakh..adi 316 333 357 332 330 329 294 317 325 324 329 334 327.0 14.8 63.0

So--: FRPS pri- da.a.bchcs-

PRICE PERFORMANCE, Accra, KumasiSeconde/Takoradi - 1973-1976

M A I Z E G A R IAmount Fr1,uenc-L/ Amount Frequencyl/

Maximum Price DiffeienceAccra over Kumasi 107 -406 -

S/Takoradi over Kumasi Z129 - J244 -

Average Price DifferenceAccra over Kumasi q 50 89% 4148 56%Kumasi over Accra d 51 11% 4 35 42%S/Takoradi over Kumasi F 62 81% 104 65%Kumasi over S/Takoradi j 49 16% 103 30%

Opposite Price Movements No. No.Accra/Kumasi 21 47% 15 42%S/Takoradi-Kumasi 11 37% 12 39%

1/ Expressed as a percentage of observations

ANNUAL PRICE RANGES 2/

1973 1974 1975 1976 1973 1974 1975 1976% Amount % Amount 7% Amount % Amount % Amount %/ Amount % Amount % Amount

Accra 59 78 49 76 54 112 140 445 66 138 66 131 128 265 96 631Kumasi 95 114 62 75 71 130 136 377 56 126 - - 114 309 150 607Sekonde/Takoradi 58 97 - - 74 141 143 431 20 63 - - 94 308 78 517

2/ Expressed in cedi per to-ne and as percentage of annual low.

(Xx

ANNEX V

Table 22

SELECTED CONSUMER PRICE INDEX NUMBERSMARCH 1963 = 100

NATIONAL URBAN RURALCombined Imported Local Food Local Food Local Food

___________________________ Index Food

1970 188.5 150.1 210.00 189.9 216.3

1971 206.0 146.5 236.1 217.5 241.9

1972 226.7 184.4 259.4 247.6 263.0

1973 266.4 214.2 313.4 312.1 313.8

1974 315.3 271.8 362.7 375.3 358.7

1975 Average 408.9 371.9 473.6 506.2 463.4

1975 December 469.0 409.1 544.9 615.3 523.0

1976 January 495.8 449.4 575.0 629.0 558.2

February 519.4 507.5 610.7 653.7 597.4

March 533.8 461.3 634.7 670.3 623.6

April 556.4 420.3 672.1 700.2 663.4

May 587.6 404.6 729.1 756.3 720.6

June 627.3 408.4 791.7 860.3 770.3

July 690.7 386.3 899.3 975.2 875.6

August 704.4 385.5 922.0 966.5 908.1

September 721.9 387.0 938.8 918.5 945.1

October 725.1 389.6 936.5 936.9 936.4

November 725.8 391.2 930.0 970.9 917.2

Source: Central Bureau of Statistics.

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