With the aid of a diagram, explain the effect of these events on the equilibrium price and quantity of agricultural crops assuming that these events have equal impact.
The economy of Ghana is made up of three sectors namely Agriculture, Industry and
Services. These three sectors contribute to the national output. For decades prior to the
2000s, the Agricultural sector contributed the most to the national output. Sadly, in
recent years however, the sector has been the least contributor to national output.
Trends in production of major food crops such as maize, rice and sorghum show that
on-farm productivity has stagnated and the exploitable difference between the actual
and the potential output of most of the crops (yield gap) has widened. Low and
inadequate levels of usage of productivity enhancing technologies such as quality seeds
of improved varieties and fertilizer, thin extension services and weak market linkages
contributes to the poor agricultural performance. It was against this background that
the
NPP-led government implemented one of her flagship programmes “Planting for Food and Jobs”.
The programme is primarily aimed at making subsidized improved seeds and fertilizers available
to farmers, sensitizing farmers on the adoption of good agronomic practices and the marketing of
agriculture crops over an electronic agriculture platform. This programme is ultimately aimed at
boosting crop yield. In addition, suppose that agricultural products in Ghana are normal goods
and due to the implementation of good economic policies and the curtailing of corruption, the
economy of Ghana grows significantly leading to appreciable increases in the general consumers’
income levels. With the aid of a diagram, explain the effect of these events on the
price
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