Abstract
The debate on low subsistence smallholder food agricultural production in Ghana in particular and sub-Saharan Africa in general largely blamed supply-side constraints. Policy prescriptions advocating sector reforms and transformation consequently focused on supply-side solutions and only acknowledged demand-side limitations. Presumed in strategy-choices was subsistence food producers would necessarily respond to price incentives to increase food productivity. This paper interrogates the link between price incentives and increased subsistence food productivity in rural agricultural marketing systems by examining issues in subsistence agriculture in Hohoe District of Ghana. Findings revealed that a sustained expanded food production output is a function of demand and supply. A critical incentive to a sustained expanded food production output by way of making food agriculture a poverty reduction tool is, therefore, a sustained increase in output demand. The paper concludes that price incentives do not work in incomplete food agricultural marketing systems. Implied is that making food agriculture an effective poverty reduction tool requires both medium – and long-term state-led investments in processing and food market outlet development. This position revives the argument that the role of the state in an economy cannot be eliminated as has been proven in more fully developed western agricultural markets. As such, any free-market policy that aims at boosting food agriculture productivity must necessarily go simultaneously with the development of food agricultural output markets. Keywords: Food agriculture, Price incentives, Marketing systems, Productivity, Policy.
Highlights
Food agriculture is a subsistence smallholder activity in Ghana
This paper examines the link between price incentives and increased food agricultural productivity in rural food agricultural marketing systems
The paper showed that though increasing agricultural output prices is a necessary condition to enhance farmer productivity and food security, it is ineffective without delimiting other productive assets
Summary
Food agriculture is a subsistence smallholder activity in Ghana. Being the most labour-intensive sector of the economy and main source of livelihood for rural households, it employs about 60 percent of economically active rural population. The objects were two-fold: removing existent distortions weakening farmer-incentive framework and strengthening agricultural institutions to create an enabling environment for sector growth This imputes the low food agricultural productivity to government interventions and the aim of the reform was to enlist private sector participation in agriculture. In concert, this was to inspire food market efficiency and competitiveness to improve farmer-incentive structure (Poulton, Kydd & Dorward, 2006). Implementation involved dissolution of food marketing boards and withdrawal of farm-input subsidies to remove distortions to food agricultural incentives to enhance food productivity (World Bank, 2008) As it turned out, the prescribed solutions for the low sector productivity focused mainly on providing solutions for the supply-side factors while merely acknowledging the demand-side limitations. The paper examines the rural agricultural marketing systems facing food agricultural producers in the Hohoe District in line with the policy prescriptions
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