Chapter 11. Oil palm industry growth in Africa: a value chain and smallholders’ study for Ghana 387
Figure 8. A Model Inclusive of Smallholder Farmers for Oil Palm
(^)
Te chnical Operator (TO)
(Processor, Exporter,
Aggregator)
Financial Operator (FO)
Par cipa ng banks
Farmers /Outgrowers (OUT)
Produce according to defined quality
and quan ty; Over me “matures” to a PC
Provides inputs, extension
services, quality assurance and
market access
Provides financial services
medium - long term credit & informa on
related to credit management
Increase government
facilita on role in fair
pricing and training of FBO
Source: Adapted from OVCF
The farmers’ participation in the chain is enhanced and they are offered a fair deal for the supply of FFB.
This concept has long term development and sustainability prospects as the two main parties (TO and
OUT) feed off each other. With the TO’s inputs and technical/management, the plantation company
(PC)/OUT) sustainably increases plantation area and increases yields. Given the competitiveness of the
market (e.g. diversion of FFBs) the FBO requires training and skills development to attain the PC capacity
level to enhance negotiation, lobbying and market research.
Thus the focus on policy interventions, including the medium term objectives previously described,
is worthwhile and needs to be promoted for smallholder inclusiveness. Smallholder farmers and
processors in the oil palm industry may need to play critical roles in decision-making that can build
their social capital and hence influence policy decisions, understanding markets, acquiring agricultural
knowledge and information systems and accessing science and technology.
The recommendations derived from the analyses and conclusions in this chapter are as follows:
(a) The nucleus/estate smallholder oil palm project development must emphasize principles of participatory
development, in which the farmers are the subject and not the object of development initiatives, by
ensuring that the smallholder farmer becomes a viable, progressive, and self-reliant farming entity;
(b) The concept of joint asset ownership should be enhanced. (In a competitive market, many smallholders
sell their produce to mills offering the highest price, even though they may be under a legal obligation
to sell to the nucleus estate. Joint asset ownership may commit smallholder farmers to the linkage
partnership because their economic returns would depend on the success and sustenance of the
linkage.)
(c) Smallholder farmers need intervention/assistance from all stakeholders to ensure environmental
sustainability. (Farmers generally lack the capital and technical expertise required to recapitalize the low
fertility status soils in degraded land where there are opportunities for oil palm development.)