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An ambitious program of industrialization based on agriculture

Interview - July 2, 2014
Ghana has reached its peak in terms of cocoa production, but the Minister for Food and Agriculture Clement Kofi Humado talks about other opportunities, such as sesame, guar gum, legumes and cut flowers, and how Ghana is eradicating bottlenecks to foreign investment such as issues realted to land acquisition
The strong export prices of its main commodities helped Ghana counter the effects of the 2008/09 global economic crisis. However, it needs to further bolster its key sectors to promote sustainable growth.

Ghana has, over the past 10 to 15 years, come up with an ambitious program of industrialization which is based upon agriculture. We may have discovered oil recently, but agriculture remains the basis for our growth and industrialization. Agriculture has been fueling the increased industry and services. There is some concern as to why the contribution of agriculture to the overall GDP has been falling over the past 3 or 4 years, but I respond by saying that it is consistent with the country moving from being a low-income country category to a middle-income category. That transition always gives the picture of having the contribution of agriculture declines to make way for industry and services.

This goes in line with the government’s vision of decreasing the country’s import dependency.

Yes, it does. We are not saying that we will no longer import, because as a member of the international community, you need to buy and sell. However, if your import bills are so huge that they are threatening the stability of the economy, then you need to do something. The measures we are taking are only meant to narrow the gap and reduce import dependency.

For rice, we think that within the next 4 years, we will be able to reach a level of balance, because we are investing a lot in agri-business. We are facilitating investments of large agri-business of rice production. If you go to the right and left banks of the lower Volta River (VR), you will see huge rice production companies, some of which come from Brazil, and some are consortiums of banks. With rice, we think that by 2017 or 2018, we should be able to bridge the gap.

Is there a particular area that proves more difficult than most?

It is poultry that we are having real difficulty with. No matter how much we try, we believe we can only move from 20% domestic production to 40% of the domestic needs. 60% will still have to be imported. For horticulture, especially tomatoes, we are testing the variables and have done the adaptive research and have identified which kind of products to grow and how to grow them. We are coming out with the financial and technical feasibility brochure or manual that we intend to deploy to secondary schools, private groups and investors.

In your opinion, what major issue exists when it comes to foreign participation?

One major issue for foreign participation in agriculture is land. There is difficulty with land acquisition because of our attitudes towards the foreign ownership of land. We have put in place a department under the Ghana Commercial Agriculture Project (GCAP) which liaises with the land commission and landowners so that we can acquire lands for the foreign investors. We are trying a model now where the land owners will not ask for cash up front (because if you had to buy 1,000 hectares of land as a foreign investor, all your money will be gone). We then ask that land owners put the land as part of the business, so that you are entitled to 2.5% of the gross earnings. That is working very well.

With the Global Agro Trade Company (GATCO), for example, the first time we tried it out on about 600 hectares of rice, the community got about $200,000. Suddenly, they want to give more land. This current season, they are projected to receive $1.2 million.

How is the Ministry making the people more eager to enter the agricultural sector? How is it helping the general populace see that agriculture is a way to do business?

Agriculture has reached a certain volume of production that slight decreases in terms of percentage are not really affecting the total value of production. Even right now, the value of agriculture—the food crop sector alone has a greater value than the oil or cocoa sectors. If you look at all the subsectors, agriculture is still dominant. It is still the subsector that takes care of employment of the people and provides enough food to ensure our food security and nutrition. The agro-industry is coming up. The processing of nuts, of cereals, and the like, is now catching up. Unfortunately, those are not considered part of the agricultural sector’s contribution. They are considered as trade and industry. There are also a lot of financial services developing around agriculture—the SMS technologies payment, the cashless system of payment,

Which opportunities for diversification and value-addition would you like to highlight for the agricultural sector?

We need to diversify because most of the farmers and the ministries have stuck to some products for too long. I have been doing some homework on that. Sesame, for example, is a simple product which we can easily grow in Ghana, and the market for it is huge. There is also guar gum, a plant that is like a bean or legume, which is in high demand in the petrochemical industry. When ground up, it is used as an adhesive to draw crude oil from the ground. While India leads in its production, we have the conditions and climate to grow it too.

Cut flowers are also an option for diversification. We are 4 hours ahead of Kenya in terms of distance to Europe. We can beat them in the market once we are competitive. We have been meeting with the Cut Flower Society (CFS) to see how we can increase the production and export of cut flowers.

For cocoa, it seems that we have reached the peak in terms of returns. Unless we invest in new planting material, fertilizing, and the control of diseases and pests, then we may not go beyond 800,000 metric tons per year. Once we hit a million tons because of the situation in Côte d’Ivoire, and the excess cocoa that came into the border. Côte d’Ivoire produces about 1.5 million tons of cocoa a year. We think that for cocoa, we need to revamp the basics before we can exceed usual production.

We are, however, leading in quality—our cocoa beans are higher in quality because we have a quality assurance department (QAD). Also, at the farmer level, they are taught how to handle the beans and prevent damage to the beans during drying and processing.

What can Ghana learn from Nigeria, a country that is similar to Ghana in the sense that it is focused on its agriculture despite having discovered oil reserves in their territory?

We are already conscious of Nigeria’s experiences, and we do not wish to repeat it. In Nigeria, when they found the oil, they neglected the food sector.

You see, what oil does is that it brings you money, but it cannot bring jobs for everybody in the country. Agriculture, by the nature of things, can give livelihood and jobs to many people, especially those in the rural areas.

If you follow oil and neglect the agricultural sector, you have a Dutch disease where the country is said to be powerful in terms of petrol dollars but the distribution of that income to the people and the impact on overall living and welfare becomes a problem. That is the problem in most oil-rich countries—everybody knows that the country has money, but it is not properly distributed.

In Ghana, we want to avoid that, and we are still putting a premium on agriculture, especially smaller farms in rural areas.

Everybody wants to learn more about the people behind the organization. As Minister of the MFA, what philosophy motivates you in your day-to-day life?

What motivates me is the fact that for those of us who find ourselves in political positions and call ourselves “big men”, we all come from the rural areas. Our parents labored to see us through school and to where we are now. So when we become a so-called “big man”, it must be your responsibility to ensure that the wealth of your country trickles down to the grassroots to where our parents are. For me, most of my work is driven by the desire to improve the lives of people, especially in the rural areas; and to make Ghana look great through agriculture. If we are able to increase our export earnings, and we are able to provide raw materials for industry and the industrial sector is booming, then of course the other countries will look at Ghana as a great country.

Thirdly, democracy thrives in a society where people are well-fed and not struggling to provide for their basic needs. Agriculture has a role in democracy as well. When people are hungry, they can translate that into violence. No matter how much you want democracy, it will be a problem.

Agriculture also provides job and livelihood, and if most of the youth in the rural areas don’t have jobs, they can become violent and join violent groups, and they can create havoc. I see agriculture as fulfilling a number of roles to keep our democracy stable.

Those are the things that are motivating me to contribute my best to this country.

What is your message to the investors, to show them that Ghana is the best choice to invest in?

I think that Ghana has a competitive edge. First of all, we have reviewed our trade and investment policies in order to reduce the cost of doing business in Ghana. We have put up a number of projects like the GCAP and related branches in line with this.

We have revised most of our laws in the agricultural sector to make them investor-friendly. Above all, we are engaging with the private sector through our public-private partnership (PPP) policy.

We have had more than 20 years of uninterrupted democracy, it is a stable country with no civil upheavals. We also have situations where the party in the government gets changed with another party, but we still keep ourselves intact.

Any investor contemplating over which sector to invest in, should remember that the agricultural sector is seriously working on the land, creating land banks. We think we have the edge, and I would appeal to investors in agriculture to make Ghana their first choice.

We are a very friendly people. We are warm and hospitable. You should come here to Ghana.