The decade spanning the years 1973 to 1983 in Ghana saw one of the most spectacular declines in economic fortune that any country has known. All sectors of the economy shrank in real terms. The output in the cocoa sector declined as producer prices declined-fueled by both the decline in world prices, and the domestic policies of the State marketing Board. The producer price had reached a peak in 1956, but declined from a level of around 140 to less than 20 in 1983. Because of the long gestation period in the planting of cocoa trees, cocoa output did not start its downward course until after 1965, but then followed the price index down. The combined effect was that the index of cocoa income in 1983 stood at a level which was one-seventh of the high point of 1960-61.

Cocoa, however, is only a part of the income of the rural peasants, and is moreover concentrate in the South of the country. How did the food sector behave during this period? Tabatabai (1988) has put together the record of eight major crops in terms of the annual growth rates of production, area and yield. His major conclusion is that there was hardly any statistically significant trend in yields, but production shrank with remarkable speed-cereals at an annual rate of 3.4 per cent for cereals, and of 4.7 per cent for starchy staples. Evidently this remarkable shrinkage of output was entirely due to a decline in acreage.

Tabatabai ascribes this decline in acreage-more pronounced in the South than in the Northern ecological region-to the large scale international migration of labor to neighboring countries which were experiencing a mini-boom triggered by the oil price increase. "It has been estimated that between 1974-5 when the exodus began, and 1981 some 2 million Ghanaians had left for Nigeria and Cote-d'Ivoire alone." (Tabatabai, p.718 quoting UNICEF, 1984, pp.165-66). Since employment in the "modern" or formal sector was maintained in the period under consideration (see above), much of the emigrant labor came from the traditional activities including agriculture. "Even if only half of the reduction concerned the agricultural sector, the decline in the agricultural labor force would have been of the order of 15-20 per cent between 1975 and the early eighties." (Tabatabai, p.721) While this labor shortage accounts for a decline in food production in the decade, it also implies that the decline in the real income of food producers was not as much as the output figures might tend to suggest. Not only were there fewer people to share in the total output in the farm sector, the natives left behind enjoyed substantial income augmentation through the remittance of the emigrants.

Relative real incomes of different groups in the urban and rural labor markets were also changed by sharp relative movements in different price indices during the general inflationary period. In particular, although the statistical series are somewhat incomplete after 1977, "the conclusion is inescapable that the underlying trend in real wholesale prices of food are at most steady, if not actually downward." (Tabatabai, p.715; see p.714 for more details) The way the divergent movements in the different price series affected the relative real incomes of different groups can be seen in the trends in real returns calculated by Tabatabai in which he deflates the nominal returns of each group by the index of consumer prices most relevant to each. These are portrayed in Figure 4.1.

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