Agricultural Growth in the Era of Structural Adjustment: A Comparative Study of Cocoa and Food Crop Subsectors in Eastern Region, Ghana

The impact of adjustment policy measures on agricultural growth is the main theme of this paper. The paper assesses, in particular, the price and non-price factors in adjustment policies that impact on cocoa and food crop production and the possible tradeoffs that might have been gen.erated It does this by comparing the period prior to adjustment (1972 to 1982) and that of adjustment (1983 to 1996). The preadjustment period was characterised by a decline in agricultural growth resul;ting from a complex mixture of inappropriate government policies, domestic policy mismanagement, adverse climatological conditions and deteriorations of the international terms of trade of agricultural produce. Since agriculture was (and still is) the backbone of the economy, the slump and stagnation in agricultural growth resulted in a near collapse of the Ghanaian economy in the early 1980s after all attempts at reviving the sector by successive governments had proved futile. To avert an upcoming econornic catastrophe, a pragmatic Structural Adjustment Programme (SAP) was adopted in April 1983. The macroeconomic policy measures implemented under SAP included devaluation of the cedi, removal of subsidies, fiscal and mo11eta1y reforms, institutional reforms and trade liberalisation. The adoption of these policies has helped to remove the price distortions against cocoa and some stmctural and financial bottlenecks affecting the efficiency of the Minist1y of Agriculture (MOA) in charge of the development of food crop production. Analysing data from MOA and Ghana Cocoa Board (Cocobod) reveals that the cocoa subsector benefited more from the price factors like devaluation while the food crop subsector did benefit more from the non-price factors such as research and extension services. Nevertheless, no clear-cut picture emerges, as the latter seems to have grown much faster, while a limited 'supply price response' approach would have pointed in the opposite direction. it can also not be concluded that there is a simple causal relationship between agricultural growth and market liberalisation Hence the study makes a plea for specific conclusions and a complex relationship between agricultural (and macro) policies and their impact.