Title: The Agri-food Sector Output in Ghana and Fuel Prices
Authors: Ramtu Ussif, Acquaye Joseph
Volume: 8
Issue: 11
Pages: 123-134
Publication Date: 2024/11/28
Abstract:
This study seeks to investigate the impact of crude oil prices on agriculture output in Ghana through addressing three research objectives. The Cobb-Douglas production function was used to explore the practical impact of global crude oil prices on agricultural output in Ghana, Annual time-series data from 1980 to 2020, sourced from the WDI and the US Energy Information Administration. Variables such as agriculture value added per GDP, international Brent crude oil prices, agricultural employment as a percentage of total employment, agriculture machinery and tractors, and agricultural land as a percentage of total land were considered. Additionally, the study delved into the consumption patterns of crude oil in both the agricultural sector and the overall Ghanaian economy, covering the period from 2000 to 2021. The Autoregressive Distributed Lag cointegration technique was employed to assess the short and long-term relationships among the variables. Before this analysis, a unit root test was conducted to determine the stationarity of the variables. The EViews Statistical/Econometric package facilitated the analysis, with graphical representations illustrating the crude oil consumption patterns in both the agricultural sector and the entire economy. The findings of the Autoregressive Distributed Lag cointegration estimates revealed a negative correlation between international crude oil prices and agriculture value added per GDP. The model indicated that all variables were cointegrated in both the short and long run. The study recommends implementation of crude oil price hike-resistant and mitigation policies to minimize the its negative effect on Agricultural output in Ghana.