Aging farmers killing oil palm sector

Aging farmers and lack of access to subsidised fertilisers have been identified as major factors hindering the cultivation of oil palm in the country, Rosemary Addico, Oil Palm Programme Manager at Solidaridad has said.

“Aging farmers in the oil palm sector is a major problem in the country’s farming sector, while lack of access to an improved subsidised fertiliser supply chain up to the farm gate also poses a major challenge to development of the crop.

“If Ghana invests in an improved fertiliser supply chain, it is going to support the oil palm crop growers.

“Fertiliser is the driver. With fertiliser we can hit over 200 percent increase of crop yields,” she told B&FT in an interview, after a workshop aimed at brainstorming on revival of the Ghana Oil Palm Development Association (GOPDA) to serve as a strong and vibrant mouthpiece to begin constructive negotiations and dialogue with government on developing the oil palm sector.

The workshop, funded by Business Sector Advocacy Challenge Fund (BUSAC) and organised by Solidaridad -- a not-for profit organisation that is interested in developing small- and medium-scale oil palm producers to be sustainable and profitable, was targetted at developing a vibrant sector, one dominated by small-scale farmers, to be more productive and profitable.

It brought together various practitioners in the value chain ranging from agronomists to oil palm farmers. Addico said: “We have seen the potential in the oil palm sector. The crop has a huge potential but nobody is supporting the sector. We have subsidised fertilisers for other crops but oil palm is not getting any support.”

She described the oil palm value chain as a sector that can be described as a good crop for poverty alleviation, food security, and job-creation for the youth, observing that there are a lot of opportunities existing in the crop’s value chain: “If you go to the rural areas a lot of women are into oil palm processing, and this has a huge benefit for the local economy”.

She acknowledged the BUSAC fund for supporting trevival of a vibrant advocacy body for a better business environment.

Mr. Nicolas Jorgensen Gebara, Fund Manager, BUSAC Fund explained that the outfit decided to support Solidaridad’s oil palm programme because of the huge potential the crop holds for the country’s economy.

“It is the second-most important crop with good export potential, and it’s an essential avenue for a lot of people to create growth and employment. All these factors meet our objectives, we believe that by providing support to the sector for the creation of sound business association that will advocate and represent its members from the palm oil sector will promote the quality, the standards and export,” he said.

The Fund is expected to run till 2015, and will support advocacy training of the operators in the oil palm value chain to help develop credibility to stand as partners and as counterparts for constructive negotiation with government, he remarked.

Oil palm is the fifth-largest crop in the country in terms of area planted after cocoa, maize, cassava and yam.

Approximately 305,758 hectares of plantation is being cultivated nationwide, with an additional 20,000 hectares needed to meet local demand.

In 2010, oil palm processing groups projected a production output of 260,000 metric tonnes of palm oil, which indicates a deficit of 35,000 metric tonnes -- leaving government with no other option but to spend US$100million annually on importation of oil palm to make up for the deficit.

An estimated unmet demand of oil palm in the ECOWAS sub-region is between 850,000 and 1,000,000 metric tonnes annually, a huge market the country can take advantage of if properly managed.

The country is said to have a total area of 305,758 hectares of oil palm. More than 80 percent of this is cultivated by private small-scale farmers who mostly use varieties of unimproved planting material. This has contributed to the very low productivity in the Ghanaian oil palm industry.

The rising trend in international demand has been precipitated by increasing demand for palm oil in bio-fuel activities.

Crude Petroleum Price determinants continue to push upward pressure on the price, and demand for crude palm oil (CPO) is steadily rising in India, China, Europe and America for bio-fuel. In view of this development, investors have been diverting their investment portfolios into CPO.