Quantitative Measurement of Agricultural Support in Ghana using PSE (Producer Support Estimate) Indicator

Averagely, agriculture accounted for 19.3% of the total GDP accrued to Ghana’s economy, and provided employment for 32.49% of the total population within the period 2015 – 2019. Agricultural land in general occupies the greater percentage of entire land area in Ghana (65.14%). Almost half of the total population (44.61%) in Ghana lives in the rural areas and majority of which are engaged in agriculture. The aim of this paper is to measure the level of government support to farmers’ income in Ghana, using the Producer Support Estimate (PSE) approach. Specifically, Single Commodity Transfers (SCT) and expression of % SCT for individual commodities, which account for about 70% of the total value of agricultural production in Ghana was used. Inasmuch as important data on market price and budgetary support to Ghana’s agriculture in the period 2015 – 2019 were still not inserted in the OECD database, data on market price were sourced from World Bank and FAOSTAT for the analysis. On the other hand, data on budgetary support to Ghana’s agriculture for 2015 – 2019 were not in existence. Inadequate literature on policy support to Ghana’s agriculture and lack of data on budgetary support to Ghana’s agriculture was a limitation and therefore limits the scope of this research. The study revealed that producers of agricultural commodities such as cocoa, maize and coffee received positive market price support, only with the exception of rice which received negative market price support in the period 2015 – 2019. The %SCT for cocoa, maize, rice and coffee were 57.83%, 37.73, -72.28 and 29.79 respectively. It is recommended that the government of Ghana would intensify production to secure enough food for its population and provide jobs initiative as a policy support to provide sustainable incentives for producers of agricultural commodities in the country. This refers especially to rice, since it was the most deprived with significant market price support during the period of the study.