Agric GDP decline is normal – Mahama

President John Dramani Mahama has defended the decline in the contribution of agricultural to Gross Domestic Product (GDP), describing the situation as “very normal” in the case of every developing economy such as Ghana.

He said as a middle income or developing economy, it is a normal economic phenomenon for agric’s contribution to GDP to slump once the secondary and services sectors on the other hand begin to thrive.

The contribution of agriculture to the country’s GDP has suffered decline since 2009 from 31.8% to about 12.8% as at September 2015. In between these years, the sector has always recorded a fall in its share to GDP and the services sector overtook agriculture in 2010 as the leading contributor to GDP.

President Mahama, however, indicated that the situation does not necessarily mean the growth rate of the agricultural sector has dropped. “The agricultural sector is not in decline; the sector is experiencing very healthy growth. The agricultural growth in 2015 was 2.5% and a sector which enjoyed such development can’t be said to be in decline,” he stated.

The President made these remarks at the 32nd annual farmers’ day celebration held at Kintampo in the Brong Ahafo Region. The theme for this year’s celebration was “Agriculture: A business response to economic growth.”

Continuous investments in the agricultural sector over the years, the President noted, has begun to reap massive results. Thanks to many interventions like the EDAIF sponsored rice project, rice production in the country has increased by 60%. The increasing domestic rice production has attracted private sector investment which is very positive for sustainable economic development, he said.

Touching on cocoa production, he observed that the free distribution of 50 million hybrid seedlings to farmers to cover about 42,000 hectares, coupled with free supply of fertilizer, mass spraying exercise and education on early detection of cocoa diseases, will result in a phenomenal increase in cocoa production in the next 3-4 years.

“These programmes are designed to support farmers to create an additional half a million hectares in the next decade. This is expected to produce about 2million metric tonnes of cocoa annually to provide the country a healthy foreign exchange,” he said.

In addition, it is the vision of government to oversee 50% processing of the total cocoa production in the country by 2021. Currently Ghana processes about 30% of its cocoa production and government is working around the clock to scale it up significantly to increase overall returns and create more jobs, he added.

The Minister for Food and Agriculture (MoFA), Mohammed-Muniru Limuna, said the ministry has made strides to boost agribusiness with interventions meant to reduce transactional costs and increase profitability in order to contribute to general economic growth in the country.

He mentioned a new agribusiness de-risking instrument “Ghana Incentive-Based Risk Sharing System for Agricultural Lending (GIRSAL)” as a classic example. The initiative, being supported by the Bank of Ghana, is designed to mitigate risks associated with lending to agribusiness by financial institutions.

The Agric Ministry, he noted, has since 2013 procured 891 tractors and equipment, and various accessories for the agricultural sector. The tractors and accessories, he emphasised, were acquired by farmers, who based on the AMSCE concept, have developed centres to provide mechanization service to farmers.

Meanwhile, 42-year-old Robert Crentsil from Ejumako-Enyan-Essiam in the Crentral Region was crowned the 2016 Best National Farmer.

Mr. Crenstil, among others, has 120-acre cocoa farm, 80 acres of rubber, 60 acres of plantain, 60-acres of cowpea and 15 acres of citrus. Mr. Martin Ariku Akudugu from the Upper East Region was adjudged 1st Runner up while a military officer, Captain James Owusu Koranteng, emerged as the 2nd Runner up. The three were among about 80 awardees acknowledged for their contribution to the development of agriculture and food security in 2016.