Government’s increased focus on positioning agriculture as a driver of economic growth is not having the desired impact as the confidence outlook in the sector is waning. The Association of Ghana Industries Business Barometer Indicator (AGI BBI) 2010 First Quarter Report shows that the agricultural sector took a dip to 25.4 from the 2009, Q4 indicator of 28, thus suppressing overall business confidence, with the indicator appreciating insignificantly from 28.8 in Q4 2009, to 28.9 in QI 2010. The three other major sectors of manufacturing, services and construction all registered positive outlooks, with the construction sector recording the highest jump from a 2009 Q4 figure of -7.4 to a 2010 Q1 figure of 6.3. The AGI BBI is the statistical mean of the current situation of local businesses and the future expectations of business executives, and it ranges between +100, where all respondents in a survey are better, and –100, where all respondents are worse. Among major challenges facing the agricultural sector, cost of credit remains the most enduring and the most daunting. Competition from imported goods, basically staples including rice and frozen chicken parts, as well as processed food items are also a continuing threat to agricultural growth. Consistently too, the sectors woes are compounded by a lack of access to credit and access to land. An emerging threat to agriculture, ranked fifth among the top 10 challenges in the AGI BBI 2001 Q1 report, is the cost of raw materials. Micro and small scale farmers indicate that the rising cost of fertilizers and other agro chemicals is becoming a major element in their cost build up, undermining their bottom line. Large scale farmers, mostly those in the horticultural exports subsector, disclose that investments in appropriate equipment such as heavy duty tractors and bull sprayers, in addition to high costs of fertilizers and other chemicals, are increasingly becoming a major challenge. The Ghana Export Promotion Council (GEPC) Export Performance report for 2009 shows a sharp decline in horticultural exports, especially the leading crop, pineapple, which managed an export volume of only 29,000 metric tonnes (MT), representing over 59 percent decline from the 2004 peak export volume of 71,000 MT. Data from the Sea-freight Pineapple Exporters of Ghana (SPEG) show that the number of their active pineapple exporters has dropped to 15 and contrasting sharply with the 2004 membership of 42 exporters. A significant number of nucleus farmers in the pineapple export business have gone belly-up. Other major challenges confronting agriculture include the lack of market, low purchasing power and inflation. Unfavourable weather conditions is also mentioned as one of top 10 challenges, underscoring the well known fact of Ghana’s extremely low level of irrigation agriculture. Lack of government support, the lack of finance and high level of taxation are all listed as major challenges to agriculture. Data from the Ministry of Agriculture however indicate that government intervention in the agricultural sector could be yielding positive results as the country’s total agricultural output has improved over the past year with major staples including grains and cereals recording impressive yields. Bank of Ghana Monetary Policy Committee Report for April 2010 reveals that there has been a shift in the distribution of the annual flow of credit to the private sector and for the first time the agricultural sector absorbed most of the credit extended in the year to February 2010. The agricultural sector received 20.2 per cent of the flow of credit to the private sector. Source: B&FT