MODERNIZATION OF AGRICULTURE AND THE DEVELOPMENT OF AN AGRO-BUSINESS INDUSTRY Policy Context Ghana’s agricultural sector the bedrock of the economy has been under-performing for a number of years. The sector is predominantly subsistence agricultural based with very little mechanization or the application of modern agricultural production methods or practices. Ghana which currently depend on cocoa for most of its export earnings lost its position as the World leading producer of cocoa to Cote d’Ivoire and now competes with Indonesia for the second position, producing on average 390 metric tons per year compared to Cote d’Ivoire annual average output of 1200 metric tons. The country’s annual agricultural yield in cocoa --- its major agricultural output is low in comparison with its neighbours. --- Ghana annual average agricultural yield in cocoa based on Year 2000 figures is only 2.5 (‘000 of hectogram per hectare) compared that of Cote d’Ivoire estimated at 5.6 and that of Nigeria at 4.2; Cameroon at 3.1 and Sierra Leone at 3.5. Also a recent study shows that the Ghanaian economy has not experience a major structural transformation since independence. ---The majority of the working population (60%) are still actively involve in agriculture with only 13% working in the industrial sector and 28% in the service sector of the economy The Policy Statement As part of the mission to: modernize the agricultural sector to substantially improve agricultural valueadded and yield and develop a dynamic and vibrant export-oriented agro-business industry, the Government is committed to putting in place the necessary policy measures and mechanism to facilitate this process. This policy commitment shall in addition contribute to addressing some of the other identified developmental challenges facing Ghana, including: the challenges of the poor performance of the economy and the disproportionate informal private sector; the challenges of the low job creation capacity of the economy as well as the challenges of the narrow export base dominated by traditional exports. Policy Objectives and Strategies The Objectives • To establish a robust, diversified and commercially based agricultural sector that ensures food security, supplies adequate raw materials to industry, contributes to export earnings and provides producers with incomes comparable to earnings outside agriculture • To promote the modernization of agriculture to encourage rural development in order to achieve the above long-term growth 53