Rural Development through Agricultural Modernisation in Ghana: A Case Study of the Tongu District of the Volta Region

In recent times, rural development has received a great deal of attention in development, in national plans, on political platforms and in the lending programme of most donor countries. This is because it has now been realised, that an improvement in the working and living conditions of the rural people is the first steps towards the achievement of a balance urban – rural development, which has come to be regarded as indispensable in any worthwhile development programme. However, the need for rural development is more pressing in the developing countries, where the rural sector is appreciably large than the urban sector. There is no doubt much has been done in Ghana by way of attempts to identify and to prescribe solutions to some of the thorny problems facing the economy. “One problem area that has been identified as critical and echoed in virtually every development plan since 1953 has been the condition of poverty that characterizes the rural sector”.1 The problem of rural poverty has been seen as directly related to the rather “backward” subsistence nature of agriculture in the rural sector. The theoretical formulation was embodied the vicious in the circles of poverty thesis made famous by Ragnar Nurkse; according to this thesis: The poverty of the mass of the rural population was a consequence of the very low productivity of the farming population. The low productivity led to low incomes. Little or nothing was left for savings or investment after consumption.2 The suspended 7-year development plan (1963/64-1969/70) emphasized the crucial role of agriculture in general economic development in Ghana in the following terms: It is nonetheless obvious that however much progress is made in the non-agricultural sector of the economy the general level of prosperity in Ghana cannot increase significantly unless agriculture which employs nearly 2/3 of the labour force also undergoes a revolutionary change.3 Although the importance of agriculture has been recognized yet it was all coated £68m which was about 14.3% of the total budgetary expenditure while mining and industry had £109.3m (23%) of the total budgetary expenditure during the plan (i.e. the seven year plan) period.4 It can, however, be argued that the amount voted for agriculture was not meant to undermine the place of agriculture in economic development but perhaps the absorptive capacity of this sector was not very strong in the initial stages of our economic development. In addition the machinery needed for the mining sector is expensive and high salaries and wages are demanded by workers of the mining sector because of the risky nature of the work. Thus in the 1975-80 five-year development plan, agriculture was voted ¢999.065, 876 which was 25% of the total budgetary expenditure while mining and industry had 12.8%.5 Economic development is characterized by a substantial increase in demand for agricultural product and failure to expand food supplies in pace with growth in demand can seriously impede economic growth. There is no doubt that agriculture is the mainstay of the economy of Ghana. Agriculture plays an important role in the lives of the rural population. For example in 1970 the percentage ration of agriculture to the rural population was 80.5%, whereas 73.3% of all persons employed in the rural sector were engaged in agriculture. Furthermore, of all the people employed in agriculture in 1970, 90.1% lived in the rural areas.6 The first role of agriculture may seem obvious but on close examination we can see that its importance goes beyond the need to keep a growing population alive. If the food supply is increasing more slowly than the population, nutritional standards will either be lower or will be maintained by increasing food imports. Spending scarce foreign exchange on food means that less is available to import capital, technology, skilled labour and management – the factors of production that tend to be in short supply in the country. Poor agricultural performance hinders the growth of the rest of the economy and limits the resources available to promote development. Another important aspect of food production is its contribution to the formation of human capital. Malnutrition causes both mental and physical retardation and poor diet also affects general health. As a result worker absenteeism is higher and on-the-job productivity lower than would be the case with a well nourished labour force. A slowly growing agricultural sector can also result in inflationary pressures. If domestic food production is not growing rapidly – and particularly if food imports are limited by foreign exchange constraints – both the absolute and the relative price of food will tend to rise. These inflationary effects will be particularly burdensome for the very poor, who spend 50% or more of their income on food. The second major role of agriculture in the process of development is to provide a market for the products of the industrial sector. The speed of the industrialisation process itself will depend on how rapidly agricultural incomes are rising. If economic growth is confined to urban areas, the domestic market for manufactured goods will be very restricted and import substitution possibilities thus will be limited. In the early periods of economic growth, rising incomes in the agricultural sector can expand the market not only for light consumer goods (radios, bicycles, kitchen, and utensils) but also for agricultural implements. The agricultural sector is important as a source of savings. That is if sufficient domestic food requirement can be provided then the scarce foreign exchange that may be used in importing food could be saved to build up foreign capital. In the same vein, increased food crops production by the small scale farmer could lead to increased income for him to meet his basic needs, domestic capital can then be mobilized from the surplus earnings of these small-scale farmers. Agricultural and its closely related activities provide about 62% of the foreign exchange earnings for the country. Nevertheless, tapping the agricultural potential is not an easy task, even if the agricultural sector is growing rapidly. The task in even difficult if agricultural output is increasing only enough to keep up with population growth. Poor agricultural performance hinders the growth of the rest of the economy and limits the resources available to promote development. Agriculture should also supply substantial amounts of foreign exchange and domestic revenue or capital for financing governmental activities, servicing of foreign debt and actual non-farm investment. Finally, agriculture employs the bulk of the labour force in the initial stage of development. In the long run, as this sector becomes developed it would then release labour for employment in the sector of the economy.

Source: KNUST