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24.08.2005 Business & Finance

High food prices lead to high inflation


Accra, Aug. 24, GNA - Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning, on Wednesday said the Government needed to boost the agricultural sector to keep inflation low.

He said any time food prices were high the rate of inflation was bound to be high.

"It is in view of this, and to keep the rate of inflation low, that the Government has set out to support various activities in the agricultural sector in order to raise the productivity of the sector," Mr Baah-Wiredu said.

He was launching the 21st National Farmers' Day Celebration in Accra under the theme: "Agricultural Production and Productivity: The Key to Growth and Poverty Reduction". It is scheduled for December 2 in the Upper East Region.

The Day has been celebrated for the past 20 years to honour farmers and fishermen towards the economy, by giving them some incentives to serve to boost their morale.

The overall award for this year is a three-bedroom fully furnished house to be financed by the Agricultural Development Bank (ADB). Mr Baah-Wiredu said it was necessary to recognize that in the compilation of the Consumer Price Index, food constituted about 52 per cent of the consumer basket.

For prosperity to reign, and for Ghana to be able to become a middle- income country within the next 10 years, there should be victory over inadequate supply of food all year round, he said.

Mr Baah-Wiredu said over reliance on rain-fed agriculture was largely accountable for poor production in years of poor rainfall. The Ministry of Food and Agriculture (MOFA) is to construct a number of small-scale irrigation projects throughout the country, he said.

The schemes are at Aveyime and Kpando-Torkor in the Volta Region, Sata and Akomadan in the Ashanti Region, Tanoso and Subinja in the Brong Ahafo Region and Weija in the Greater Accra Region.

Mr Baah-Wiredu said the Government intended to collaborate with Burkina Faso, which had made strides in its agricultural programmes through its rain-bearing clouds programme as well as in the small-scale irrigation and water retention activities.

He said Ghana intended to co-operate with Burkina Faso in soil conservation and reforestation using fruit-bearing trees to process fruits for export.