The economic effects of the withdrawal of subsidies on agricultural inputs: an assessment of the performance of the poultry industry in Ashanti Region.

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The primacy of agriculture in the economy and in the sustenance of the livelihood of the majority of the people is a truism for Ghana. In every respect, agriculture has been and will continue to be the prime mover of the Ghanaian economy for sometime to come. Until recently, the production, imports and distribution of some essential agricultural inputs, notably, fertilizers, seeds, insecticides, poultry drugs and small hand tools among others were monopolised by the public agencies. Under the public sector management, input distribution grew increasingly inefficient. To establish a competitive private market that would ensure availability and timely supply of farm inputs at the farm gate, the long term government intervention in input supply and distribution was abolished in 1990 giving way to privatization. Charging the real input price to farmers as a result of input subsidy withdrawal was expected to be matched by increased output price determined by market forces of supply and demand. However, the match has not been perfect, at least in the short run, as the input prices have increased faster than the output prices. In undertaking the research to look at the economic effects of the policy of subsidy withdrawal on agricultural inputs on the poultry industry, data was obtained from both primary and secondary sources. A field study was undertaken during which questionnaires and interview guide, prepared for policy makers and implementers as well as poultry farmers, were administered. The study revealed that input prices especially poultry drugs have shot up drastically since 1990 when the policy was implemented as compared to the periods before 1990. This increase in prices had led to input substitution leading to increased mortality rate as most effective drugs which are usually expensive are substituted with drugs which are less effective but cheap However input supply is more efficient today than periods before the policy. The study further revealed that as a result of the decrease in the output-input price ratio there has been a consistent decrease in the profits of most poultry farmers since the implementation of the policy thus making the industry unattractive in recent times. Various suggestions and recommendations made in the report are meant to solve the problems identified during the research. It is hoped that the recommendations, if implemented will help ensure a viable poultry industry in Ghana.
A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirement for the award of the Degree of Master of Science in National Development Policy and Planning, 1999