INTRODUCTION

The Food and Agricultural Sector Development Policy (FASDEP) of Ghana, which guides development and interventions in the agriculture sector, lists the following as constraints bedevilling the sector:

• Gender inequality and discrimination against women
• Inadequate road infrastructure
• Limiting market access
• Lack of long-term credit
• Unavailability of high-yielding planting material, poor agronomic practices, and cultivation of smallholdings.

Strategies outlined in the FASDEP to address the above listed constraints include:

• The promotion of crops like rubber and oil palm on the basis of comparative and competitive advantage of agro-ecological zones and availability of markets.
• Promote linkage of smallholder production to industry
• Promote formation of viable farmer-based organisations with gender equity, to enhance their knowledge, skills, and access to resources along the value chain, and for stronger bargaining power in marketing
• Advocate improved rural infrastructure
• Strongly promote outgrower-nucleus farmer linkage as a way of improving smallholders’ access to credit, improved planting material, extension on improved agronomic practices, and capacity to expand farm size per holder.

The Programme for the Promotion of Perennial Crops in Ghana is implementing the strategies outlined by the FASDEP through the following actions:

• Linking of farmers to market in TOPP and GREL from the very onset of implementation
• Creating and strengthening of farmer associations by the recruitment of a consultant to build capacity of the farmers’ associations over a two-year period
• Building of 77km of feeder roads and 210km of farm roads
• Designing two outgrower projects under the Programme

The Programme for the Promotion of Perennial Crops in Ghana became effective on August 15, 2006 when the Government of Ghana signed Credit Facility Agreements with Agence Francaise de Developpement (AFD), a French development agency and Kreditanstalt fur Wiederaufbau (KfW), a German development bank. The programme will end in December, 2013.

The programme initially consisted of four main components:

• Institutional support to MOFA
• Rubber outgrower project
• Oil palm outgrower project
• Coconut outgrower plantations

The Institutional Support to MOFA comprises: Policy for Perennial Crops; socio-economic surveys; prospective for rubber in Eastern region; Master plan for oil palm; feasibility study on coconut sector; clean development mechanism; supervision missions; audits; and steering committee meetings.

Rubber Outgrower Plantations Project III (ROPP III) and Buabin Oil Palm Outgrower Project (BOPOP) were technically started in December, 2006 as outgrower projects of rubber and oil palm plantations respectively, when the contracts with Technical and Financial Operators were signed. The Technical Operators are Ghana Rubber Estates Limited (GREL) for ROPP III and Twifo Oil Palm Plantations (TOPP) Limited for BOPOP. Crop Services Directorate of the Ministry of Food and Agriculture has oversight responsibility for the two projects. The National Investment Bank (NIB) is the Financial Operator, and therefore, the institution administering the credit component of the loan for ROPP III and BOPOP. Agriculture Development Bank (ADB) is administering the credit component for Phase II farms of the ROPP. The Consortium GOPA-Nkum has been recruited to build the capacity of the farmers’ associations over a two-year period.

The Applied Research component of the oil palm project is being implemented by Oil Palm Research Institute (OPRI), while that of the rubber project is being implemented by CIRAD, France and University of Ghana Agriculture Research Centre (ARC), Kade.

The overall objective of ROPP III is to expand rubber cultivation by 7,000ha for 1,750 farmers cultivating an average of 4ha in seven districts in the Western and seven districts in the Central regions and support the maintenance of 4,055ha of immature rubber planted under ROPP I & II. The objective of BOPOP is to expand oil palm cultivation by 3,000ha in Buabin and surrounding villages in the Central region.

The coconut outgrower plantations component was to have its content set out in a feasibility study provided for within the framework of the institutional support component. However, AFD hasn’t shown interest in getting the feasibility study undertaken. AFD’s Aide Memoire of April 2008 clearly stated that “the conditions for the preparation of a new specific project on this sector are not met”. The Aide Memoire further goes on to say that “the funds initially earmarked (in the agreement) for the feasibility study on coconut can be reallocated to another use”.

STATUS OF THE PROGRAMME

DISBURSEMENTS

Institutional Support
A total of €255,592.94 has been disbursed to the Ministry of Food and Agriculture under the Institutional support component for steering committee meetings and supervision missions. Of this amount, €73,439.52 was disbursed in 2010.

National Investment Bank (NIB)

Rubber Outgrower Plantations Project III (ROPP III)
An amount of € 7,404,424.03 had been disbursed to NIB to be on lent as loans to ROPP III farmers as at 31st December, 2010. Of this amount, €7,075,016.35 representing 95.5% had been disbursed to farmers.

Buabin Oil Palm Outgrower Project (BOPOP)
An amount of €1,294,077.14 had been transferred to NIB to be on lent as loans to BOPOP farmers as at 31st December, 2010. Of this amount €1,281,074.38 representing 99% had been disbursed to farmers

Agricultural Development Bank (ADB)
Within the implementation arrangements for the programme, €1.12m is available as credit for the maintenance of ROPP II farms which were still immature after 2005. ADB has as at December 31, 2010, requested for and received four tranches of the money totaling 757,400.13 Euros from AFD. An amount of 683,228.03 euros representing 90.2% of this amount has been disbursed to farmers. With most of the farms of ROPP II currently in production there will be no need to disburse further funds through ADB. An amount of 74,172.10 euros in ADB’s account and the 362,599.87 euros still with AFD will have to be put to another use.

Loan Repayment
Out of a total of 900 farmers under phases I & II of the Rubber Outgrower Plantations Project one hundred and ninety four (194) farmers had finished repaying their loans as at 31st December, 2010, while seventy (71) were yet to start payment.

The total amount of loans repaid by farmers as at 31st December, 2010, is GH¢ 3,707,675.09 (GH¢ 2,882,061.43 by Phase I farmers and GH¢ 825,613.66 by Phase II farmers). ADB has indicated that the repayment of loans due is 100%. ADB is, therefore, very content with the rate of loan repayment.