Chapter 11. Oil palm industry growth in Africa: a value chain and smallholders’ study for Ghana 377
farms were therefore gradually phased out as the economy became increasingly privatized. Attempts were
made to reorganize the remaining plantations into viable economic units under decentralized state control.
GOPDC was initiated by the Government of Ghana (GoG) in 1975 in the Kwaebibirem District in the
Eastern region as an alternative crop to cocoa and timber. BOPP was established in 1976 as a joint venture
between GoG and Unilever at Benso in the Western Region. TOPP was incorporated as a limited liability
company in 1977 by GoG, government institutions and foreign investors.
Since the trade liberalization policy that started in the early 1980s, the GoG privatized the state-owned
plantations and mills, including divestiture of GOPDC in 1995. The government, with the assistance of
multilateral donor institutions, has sought to promote oil palm plantations through private enterprise,
foreign-aided government ventures, and joint government-private projects, such as:
(a) GOPDC, privatized in 1995 and wholly owned by SIAT since 2008;
(b) TOPP, with GoG as the major shareholder (80%) but managed by Unilever;
(c) BOPP, which is currently owned by Singapore-based Wilmar International; and
(d) NORPALM, formerly the National Oil Palm Limited.
The sector-specific policy for the tree crop sector including oil palm under the Food and Agriculture
Sector Development Plan (FASDEP) has been to promote oil palm production based on comparative and
competitive advantages of agro-ecological zones and the availability of markets and to commercialize
through linkages to industry. Research is to be pursued to identify genetic material with desired qualities
and to improve productivity along the oil palm value chain. Emphasis is placed on the following: cultivation
of improved hybrid variety; expansion of the nucleus outgrower scheme with an aim to increase production
through area expansion and intensification of cultivation; and the upgrading of artisanal processing.
As already indicated, diversification away from cocoa and timber to include oil palm and other tree crops has
been a focus since 1975. In October 2002, the GoG under its President’s Special Initiative (PSI), focused on oil
palm as one of the key strategic pillars of agricultural and industrial-led growth and poverty reduction because
of its potential to become the next biggest export commodity after cocoa. Given the estimated 100 000 MT
shortfall in domestic production to meet domestic demand (food and industry), as well as the need to take
advantage of the huge export potential within the sub-region, the objective of the PSI has been to increase
the country’s oil palm production to meet domestic demand and satisfy regional exports (PSI, 2002). The
main thrust of the PSI is to help OPRI produce improved planting materials to develop nurseries for expanded
acreage production mainly by the private sector.
The initiative set an ambitious target of bringing an additional 10 000 ha under oil palm production by 2003,
raising that to 100 000 ha by 2007 and further raising it to 300 000 ha in the long term under the nucleus-
outgrower-smallholder estate development model. The PSI so far has achieved some successes including:
(a) establishment of nurseries – 12 nurseries are currently operational, established through private operators
in the Western, Eastern, Ashanti, Central and Brong Ahafo regions;
(b) production of high-yielding and quality seedlings – a total of 2.84 million seedlings, worth about GHC 4
269 994, were produced from 2004 to 2006;
(c) establishment of plantations – under the PSI, 19 237 ha was planted from 2004 to 2006 ; and
(d) farmer mobilization and support – a total of about 11 000 farmers have been supported.
However, at this time, the PSI oil palm project is in turmoil. What began as a well-funded plan to launch
Ghana into a new era of stunning growth in the oil palm sector has been stagnating and deteriorating for
the past three years in the almost total absence of funding. Most farmers are disappointed and angry, as they
have been left to their own measures in maintaining their palms, contrary to what they were promised. They