Queenly Joy Smith, Vice President, Agric & Soft Commodities, Corporate and Investment Banking, Stanbic Bank Ghana.

It is agreeable that five Ghana cedis today will not get you your favourite “gob3” order with its accompanying accoutrements as it would have some months ago, right? How about “333richioo pie” and a chilled sachet of fan ice as a late afternoon snack? Five Ghana cedis is simply not sufficient to satiate Ghanaians either for breakfast, lunch, or dinner. Why? There is such a thing as food inflation…

The concept of food inflation refers to the rate at which prices of food items increase over time. It is typically determined by tracking the changes in the prices of a basket of food items over a specific period, often using indexes such as the Consumer Price Index (CPI) or Food Price Index (FPI). These indexes measure the average change in prices paid by consumers for food products and are influenced by various factors like supply and demand, production costs, weather conditions, government policies and global market trends.

As mentioned earlier, Ghana is no exception to this concept, having a myriad of factors contribute to food inflation. Especially in Accra, the effect of an increase in fuel at the pump triggers an automatic increase in food prices due to higher transportation costs. In other major cities in the country, the impacts of poor road infrastructure lead to an increase in the price of food products as they are transported from rural areas to urban markets. Erratic weather patterns including droughts and floods in recent times negatively impact agricultural productivity, leading to lower yields. Also, the resulting impact of the exchange rate volatility; that is depreciation of the Ghanaian cedi against major trading currencies increases the cost of imported food products and agricultural inputs (fertilizer and other agro-chemicals), contributing to overall food inflation. Additionally, speculative activities by traders and middlemen artificially inflate food prices, especially in times of perceived or actual scarcity. Finally, it is worth noting that the recent activities of illegal miners are gradually eating away our farmlands especially in the cocoa growing areas. This has contributed to the nation’s low cocoa production in the past two seasons.

For decades, Agriculture has been the mainstay of Ghana’s economy and same goes for most economies in Africa, providing employment for about two-thirds of the continent’s working population; one would then ask why we are not food sufficient and what role we play in driving food inflation in-country.

In Ghana, agriculture is practised mainly on a subsistence (smallholder farms) basis where the produce is only sufficient for families with little to no surplus for large commercial trade purposes. This is a major challenge which requires a critical assessment by the leadership of the country. To get on the road to produce sufficient food for Ghanaian consumption, there is a need for an evolution in the culture of farming in Ghana to medium and large-scale commercial farming to boost local production. In this light, we can take a cue from South Africa that has by far the most modern, productive and diversified agricultural economy in Africa. Achieving this will require a multifaceted approach involving policy and regulatory reforms, infrastructure development, financial support and capacity building.

In the area of policy reforms, simplifying land ownership and tenure systems to ensure seamless land acquisition and land rights will make it easier for farmers to invest in land improvements and expansion. Also, implementing policies that encourage large-scale farming, such as tax incentives, subsidies for commercial agriculture and easing restrictions on farm input imports will go a long way in boosting interest in farming for commercial purposes.

Again, in addressing food sufficiency and ultimately food inflation in Ghana, there is a need for structural and infrastructural development. Improving rural roads and transportation networks will facilitate the movement of food crops from farms to markets. Investing in proper storage facilities will reduce post-harvest losses and maintain food quality. Additionally, Government must enhance supply chain efficiency by addressing the bottlenecks in the supply chain to ensure timely delivery of food products and enhance logistics and distribution systems to reduce costs and improve efficiency. This can be done by developing strong linkages between farmers and markets through farmer cooperatives to ensure stable demands and fair prices.

Modernizing farming techniques by expanding irrigation infrastructure to reduce reliance on rain-fed agriculture, encouraging the use of water-efficient technologies such as drip irrigation and promoting mechanization will increase efficiency on our farms while reducing the cost of labour. Also, providing training and extension services to educate farmers on modern agricultural practices will largely enhance the capacity of farmers. Going a step further on modernization, promoting agro-processing and value addition by investing in agro-processing industries to add value to agricultural products will add a face-lift to the industry. The government must encourage private-public partnerships aimed at providing incentives for local processing and packaging industries.

Ensuring food sufficiency calls for climate-smart agriculture. As a country, there is a need to promote practices that enhance resilience to climate change, such as crop diversification and conservation agriculture. We ought to invest heavily into the research and development of drought-resistant and high-yield crop varieties and commercialize their production. Also, encouraging sustainable land and water management practices while promoting agroforestry and soil conservation techniques will help conserve our environment.

The road to attaining food sufficiency is a long one, albeit doable. It is important to acknowledge that implementing the structural and economic reforms needed will take some time and strict discipline on the part of the authorities, farmers and the citizenry. In the interim, there should be a focus on establishing mechanisms to monitor food prices and control inflation by implementing policies that prevent hoarding and speculative activities that drive up prices. Also, increasing access to affordable credit and financial services tailored to the needs of small-scale farmers can boost their production and help them scale up their operations to meet the commercial needs of the populace. Additionally, developing agricultural insurance schemes to mitigate risks in agriculture and encourage investment safety will go a long way in making the sector attractive for investors.

To reiterate, addressing food inflation and achieving food sufficiency involves a multifaceted approach. By addressing the areas stated above, Ghana can work towards controlling food inflation and achieving food sufficiency, ensuring a stable and secure food supply for its population.