The Ghana Strategy Support Program has released six new Background Papers:
The Role of Cocoa in Ghana’s Future Development looks at the growth and poverty reduction implications of future growth in the country’s cocoa sector. It finds that increasing cocoa production by about 60,000 tons annually is necessary for Ghana to reach its middle-income country target by 2015. However, because cocoa’s poverty-growth elasticity is low, further growth is unlikely to lead to the large reductions in poverty experienced in the past. This finding emphasizes the need for structural diversification, which remains a key challenge for Ghana. By Clemens Breisinger, Xinshen Diao, Shashidhara Kolavalli, and James Thurlow.
Identifying Opportunities in Ghana’s Agriculture: Results from a Policy Analysis Matrix uses a budget-based method to study the social and private profitability of six maize and six rice production systems. It finds that maize systems show a higher rate of return than rice systems. While both systems contributed to national economic growth and private income generation under the high cereals prices that prevailed in 2007, if prices fell to those of 2005, rice would be socially and privately unprofitable. Return to the still lower prices of 2002 would leave both maize and rice systems unprofitable. Priority interventions to alter cost-benefit rations of the cropping systems are ones that reduce the real costs of production or physical and quality losses rather than those that intervene through altering producer prices. By Alex Winter-Nelson and Emmanuel Aggrey-Fynn.
Drivers of Change in Ghana’s Cocoa Sector takes a closer look at the cocoa sector by analyzing the production boom observed between 2002 and 2004. It suggests that most of the increased production can be attributed to good weather, and more intensive use of household labor and, to some extent, of fertilizer. The production boom did not, however, alter the more fundamental problems of the Ghanaian cocoa sector, where yields remain well below those observed in other producing countries. The key constraint of the sector remains its lack of innovation, and questions are raised on the incentives and policies necessary to promote technological innovation in cocoa. By Marcella Vigneri.
What Does Liberalization Without Price Competition Achieve: The Case of Cocoa in Ghana delves into the economic incentives created by the deregulation of Ghana’s domestic supply chain in the 1990s. While it was expected that competition would emerge among private buyers by means of price bonuses and/or premiums, it was found in practiced that instead the increasing numbers of Licensed Buying Companies compete for cocoa supplies based on the provision of different services to farmers. The cash payment and credit for inputs offered by companies to attract cocoa sales mainly benefit liquidity-constrained farmers, enabling them to invest in productive inputs. Since cash-constrained farmers are likely to be the poorest as measured by simple welfare indicators, liberalization may be seen to have had a progressive impact on Ghana’s cocoa farmers. By Marcella Vigneri and Paulo Santos.
Local Impacts of a Global Food Crisis: Food Price Transmission and Poverty Impacts in Ghana takes a local perspective on global food price shocks in Ghana by analyzing: (1) food price transmission from world markets to regional markets in Ghana, and (2) the impacts of differential local food price increases on various household groups. Domestic staple prices are found to be correlated with imported rice prices, but price transmission between regional markets is limited. The negative welfare effect of high prices for households as consumers appears modest at the aggregate national level due to relatively diverse consumption patterns, however the urban poor and those living in the North appear to be harder hit by high food prices than the average consumer. By Godsway Cudjoe, Clemens Breisinger, and Xinshen Diao.
Decentralization and Local Public Services in Ghana: Do Geography and Ethnicity Matter? explores disparities in local public service provision between districts in Ghana. It finds that district geography plays a major role in shaping disparities in access to local public services. As well, ethnic diversity has a negative impact on a district's access to local public services, especially in rural areas. The negative impact of ethnic diversity decreases as the average literacy level increases.
(Note: Hyperlinks should launch PDF download. If you would like a hard copy, please contact l.horowitz@cgiar.org)