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Rising Costs of Locally Produced Food Drive Ghana’s Food Inflation

Data from the Ghana Statistical Service shows that locally produced food contribute more to inflation than imported counterpart.

Data published by the Ghana Statistical Service points to significant factors contributing to the recent hikes in food prices across the country. Food inflation stood at 22.6% in May, a slight reduction from 26.8% in the previous month. However, a detailed analysis reveals that locally produced food has been the primary driver of this inflation, overshadowing the impact of imported foods.

According to the data, locally produced food contributed 28.6% to national inflation, while imported food accounted for only 9.2%. This disparity highlights that the rising cost of locally produced food is the main cause of food inflation in Ghana.

Among the top 20 items with the highest inflation rates, eight were locally produced foods, while only three were imported. The food sub-class comprising vegetables, tubers, and plantain experienced an inflation rate of 37.9%.

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Several factors have been identified as contributing to the rising costs of locally produced foods. One major factor is the cost of transportation from farm gates to markets. The year-on-year inflation for transport was 20%, close to the national average.

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However, the month-on-month inflation, which reflects the current situation, saw a significant jump of 10.6% compared to the national average of 3.2%. This substantial increase underscores the impact of transportation costs on the prices of locally produced food, a concern frequently raised by traders.

Additionally, low production levels due to competing uses of arable land have exacerbated the issue. Illegal mining activities, which destroy large tracts of farmland, are a major threat to local food production, analysts in the Agriculture sector have noted. Ironically, the mining communities are also key farming areas.

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Another competing use of arable land is real estate development, often referred to as “concrete plantations.” Large parcels of land previously used for cultivating crops such as maize, cassava, and rice have now been converted into residential areas, particularly in cities like Accra.

Despite the government’s Planting for Food and Jobs initiative, which has been in place since 2017, the food situation remains dire. The initiative aimed to boost local food production but has faced challenges that have hindered its effectiveness.

As Ghana grapples with these challenges, the need for strategic interventions to stabilise food prices and support local farmers becomes increasingly urgent. Addressing transportation costs, protecting arable land from competing uses, and improving agricultural productivity are essential steps to mitigate the ongoing food inflation crisis.

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