CIAO DATE: 01/2013
November 2012
Danish Institute for International Studies
This paper analyses the political economy of a presidential initiative to increase smallholder productivity and incomes in palm oil production in Ghana in the 2000s. It illuminates a concern that is at the heart of sustainable poverty alleviation in sub-Saharan Africa: how to assist smallholders farmers in agriculture to become more productive and earn better incomes. The political prospects for effective support to smallholders in Ghana appear good at first sight. The country is one of the most democratic in Sub-Saharan Africa. Since 1993, when multiparty democracy was reintroduced, the country has seen two turnovers of the party in power following relatively free and fair elections. Civil and political rights have also been largely upheld. All this should help smallholders to get a stronger voice and thereby motivate ruling political elites to focus on agriculture. The economic case for the palm oil initiative in Ghana is also good. Domestic demand for palm oil for cooking and for industrial uses (laundry products, cosmetics, oleo chemicals, paints, pharmaceuticals, explosives, specialty foods, fibers, surfactants) is strong and growing. Local producers cannot meet this demand at present. Imports are used to close the gap, but Ghana’s potential for exporting palm oil is substantial. Smallholders hold the key to increased palm oil production. In Ghana, an estimated 250,000 hectares of existing oil palm-planted area, representing 80 per cent of national oil-palm output, are occupied by scattered, unorganized smallholder farmers with no connection to any established oil-palm estates. Yet the output of these farmers was only 4 tons per hectare, as compared to the 14 tons per hectare produced by farmers linked to the oil-palm industry. The industrial estates growing the crop are limited by Ghana’s land tenure system (mainly own by smallholder farmers) which makes it is difficult for them to acquire land for expansion.
Resource link: The Case of Ghana's President's Special Initiative on Oil Palm (PSI-Oil Palm) [PDF]