Economy-Wide Effects of Climate-Smart Agriculture in Ghana: The Case of Cereal-Legume Integration Plan

Abstract

Abstract Climate Smart Agriculture (CSA) can reposition agricultural value chains to ensure food security and sustainability under climate change conditions. Thus, Ghana has documented nine CSA investment plans to drive agricultural sustainability. Despite its importance as a guide to policy makers and practitioners, empirical studies examining the economy-wide quantitative effects of these plans are quite limited. This study bridges the theory-empirics gap on CSA for Ghana by examining the effects of Cereal-Legume Integration Plan (CLIP)—one of Ghana’s nine CSA plans on gross domestic product (GDP), household welfare and food security. The study adopted the Rural Investment and Policy Analysis (RIAPA) Model to evaluate the country-wide effect of the CLIP using the 2019 Ghana Social Accounting Matrix. The study finds that CLIP promotes food security through increased production and reduced food prices. CLIP implementation increases agricultural production by 1.38%. This drive prices down by between 1% and 7% for different foods and thus increasing consumer welfare. Household incomes increase by 0.6% and contributes positively to GDP (0.53). The intervention, however, causes a wedge in the income gap between the rich and poor households, and urban and rural households, which demands social safety nets programs to counteract the negative effects.