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Revamping State-Farms- A Review

Revamp Defunct State-Farms to Boast Economy
A Review by Fredua Kwarteng
The above article was written by Anthony Kweku Ansah and published by the Chronicle on September 12, 2011. The basic argument of the writer is that revamping the defunct state-farms established by Ghana’s first president Kwame Nkrumah is necessary for the following reasons:
1)To provide employment opportunities for the bourgeoning youth population and prevent them from causing a variety of social problems owing to lack of employment opportunities;
2)To stop the mass migration of the youth from rural to urban areas;
3)To create wealth and boast the national economy; and
4)To honour Kwame Nkrumah.

Regarding the first point, most economic historians will agree with me that while the concept of state-run farms was brilliant theoretically, its implementation was fraught with practical problems. Most of the state-farms were drainers of public funds. The average state-farm worker productivity was abysmally minimal and theft of resources by workers and management from those farms was rampant. In state-farm organizations, supervisors or managers who wanted to maintain high levels of productivity were accused of behaving as if the organization belonged to their families. In the minds of those people, state farms had no definitive ownership and for that reason it could be disdainfully abused so to speak! Also employment in state-farm organizations was regarded by the workers as Whiteman’s job that did not require any responsibility or productivity from them. This suggests that those workers and their management did not make any mental and attitudinal shift from the era of colonial government to that of self-government. That is, they did not discriminate between government by colonial masters and government by Ghanaians. This attitude is in sharp contrast to that of workers in some Asian countries, where employment in state enterprises is regarded as an honour and social responsibility. Accordingly, workers employed in state-run organizations in those countries work over and above the payable man-hours as their contribution to the state.
In addition, the inefficiency and ineffectiveness of the state-farms in Ghana could also be attributed to unnecessary political interferences by the government. People were appointed to managerial and supervisory positions in state-farms based on their political connections or affiliation rather than their potential capacity for economic productivity. Employment levels in state-farms had no limits. People were employed in those organizations even when there was practically nothing for them to do. Such people did not add any economic values to the organizations and on top of that they were a massive drain on the meagre payroll resources of those organizations. Unlike their counterparts in the old Soviet Union, the Ghanaian state-farms did not have any publicly articulated and implemented production quotas, no well-established governance structure, and their income and position statements were hardly public knowledge. This made it increasingly difficult for members of the public to assess the economic viability of the state-farms. While these problems could be fixed, the Ghanaian attitudinal and mental conception of state-owned property as ownerless and unworthy of their productive labour cannot be fixed in the short-run even with a rigorous educational intervention. This is why state-farms cannot be an engine for wealth creation or a booster for economic development in Ghana or anywhere in Africa. The dismal economic performances of state-farms in Tanzania and Ethiopia are too glaring to put in the dustbin of African economic history.
However, I agree with Mr. Ansah’s suggestion that private-owned farms such as Darko Farms Amraha Dairy Farms and many others must be assisted by the government. Empirical evidence shows that private farms are more efficient net-users of resources than government farms. And the private farms could create many of the real jobs that our youth badly need. But the problem is that in the past governments systematically targeted private farms with the intention of destroying them, especially those whose owners were labelled political opponents of the ruling party. For example, Darko Farms was persistently persecuted by the NDC government under Rawlings on the grounds that Mr. Kwabena Darko, the owner, was a NPP supporter or sympathizer. Rawlings ignored the economic importance of that organization in the Asante regional economy in terms of the many direct and indirect jobs it helped created and initiated a series of political and economic actions against Darko Farms. The Mills government has continued the NDC culture of political targeting of so-called businesses that are perceived to be politically unfriendly to the NDC. How could jobs be created in such conditions?
Mr. Ansah stated without any justifications that state-farms should be revived and used as an engine of wealth creation and economic boaster. From the analysis above, state-farms cannot do any of those things the writer has suggested. Wealth is created when an organization’s revenue inflows exceed its expenses. Historically, state-farms have a reputation of achieving negative economic returns and relied entirely on state financial bailouts. In fact, “real jobs” are created by private-farms, not government-run farms. I am not suggesting that every private farm is productive or efficient-user of resources. Certainly, there are some private-farms that are set-up mainly to siphon off government resources into private pockets. Economically reputable private farms in Ghana are not hard to identify, if we put aside our political ideologies and loyalty. However, if the government continues to wear its socialist lens and sees private-farms as exploiters of labour rather than instruments of economic growth and development, the unemployment situation is likely to get much worse as the institutions of higher education constantly produce more graduates every year.
Furthermore, Mr. Ansah’s suggestion that state-farms should be revived to honour Kwame Nkrumah, the originator of that idea, is not a powerful argument, to say the least. I find it hard to understand that an economically unviable venture should be revived merely for the purpose of honouring its originator. This should not be construed as my opposition to honouring Kwame Nkrumah. On the contrary, there are many ways Kwame Nkrumah could be honoured in Ghana but certainly not through the re establishing of state-farms.
Nevertheless, state-farms could be revamped as a political solution to the mass youth unemployment problem in the country. In that case, state-farms would be a conduit for preventing the youth from committing the social vices the writer mentioned rather than producing any economic values. But I doubt if donors to our aid-oriented economy will favour such a solution to the mass unemployment in the country. We should not forget that the International Monetary Fund (IMF) and the World Bank were influential in the 1990’s sale of government run-business corporations in Ghana.