“Recent increases in cereals prices raise questions about agricultural priorities in Ghana. This report presents an application of the Policy Analysis Matrix (PAM) to the problem of identifying opportunities to enhance agriculture’s contribution to economic growth and poverty alleviation
in the country. The PAM is a budget-based method that was applied to study the social and
private profitability of six maize production systems and six rice production systems. The results
indicate that all twelve of the systems contribute to national economic growth and private income
generation among farmers, at least under the high cereals prices that prevailed in 2007. Maize
systems show a higher rate of return (lower cost/benefit ratio) than rice systems. If prices
returned to lower levels experienced in 2005, however, rice systems would be privately and socially unprofitable. Return to the still lower prices of 2002 would leave both the maize and rice systems unprofitable.”
