Public Expenditure on Agriculture and its Impact

Abstract

This chapter examines trends in public agricultural spending between 1961 and 2012 and disaggregates that spending into the cocoa and noncocoa sectors. The majority of total spending has gone into the cocoa subsector, while the noncocoa subsector, which includes all the country’s food staples, has been neglected. The government’s public spending on agriculture has fallen short of 10 percent of its total expenditure in most years since 1961, and in recent times the share has averaged only 2 to 3 percent, which is low even by African standards. The government has also spent relatively little on complementary investments in rural roads and other essential rural infrastructure. Econometric analyses then estimate the impact of public spending on agricultural productivity growth, insights into the marginal returns to public investments in the cocoa and noncocoa subsectors, and by type of public investment. This is followed by a discussion of some of the government’s recent attempts to promote noncocoa agricultural growth through several new subsidy and investment programs.