Palm oil—an abandoned wealth

Research has revealed that palm oil is the world’s most produced and consumed oil, and the most productive oil crop in the world. It accounts for more than half of the global import and export trade of all vegetable oils. 

 

Global palm oil production is dominated by Indonesia and Malaysia. These two countries together account for around 85 to 90 percent of total global palm oil production. Indonesia is currently the largest producer and exporter of palm oil worldwide. 

The global consumption of palm oil is expected to grow to almost 60 million tonnes by 2020. The estimated unmet demand in the ECOWAS sub-region alone is 850,000 tonnes. 

According to the Ministry of Food and Agriculture, palm oil was a principal export from the then-Gold Coast as it accounted for about 75% of the country’s export revenues in the 1880s.

Sadly, the sector is no longer among those vibrant in the country’s economy as Ghana is now a net importer of the commodity, with a gap in the order of 35,000 metric tonnes per year—a figure estimated to grow to 150,000 metric tonnes within the next 15 years.

Meanwhile, it is estimated that out of the one million hectares of land available for the cultivation of palm oil, just about 330,000 hectares are cultivated nationwide with an additional 20,000 hectares needed to meet local demand. This no doubt presents an enormous opportunity for Ghana to develop the sector and take advantage of the deficit in production and supply to drive economic growth.

Even with the unmet demand, it is estimated that 243,852 tonnes of palm oil is produced in the country -- cultivated by 80% private small-scale farmers.

The World Bank explains that oil palm provides more jobs per hectare than other large-scale farming (it employs about 0.4 people per acre), and the jobs are year-round rather than seasonal. All these statistics show that if Ghana is to take this sector seriously, the country can earn more from palm oil than cocoa and gold.

Efforts by the University of Ghana

Prospects in the sector have however been blighted by some challenges which industry players believe can be solved if government and state institutions take deliberate steps to save the country’s next ‘goldmine’.

Some months ago, horrifying news about adulteration of palm oil with the Sudan IV chemical to give it a preferred reddish colour was revealed by the Food and Drugs Authority of Ghana.

It is for this reason that the Institute of Applied Science and Technology (IAST) in collaboration with the Technology Development and Transfer Centre (TDTC) of the University of Ghana decided to take it as a serious matter and delve into how best they can help, and educate the smallholder farmers on how to use a more advanced and scientific means to optimise production.

The first of these training workshop was held at Abodom near Kade in the Eastern Region, where the majority of palm oil consumed in the country is produced. The training brought together 6 smallholder farmers from Sekyere, also a town in the Eastern Region, and 14 from Abodom.

Professor Boateng Onwona-Agyeman, Acting Director of the Institute, said the workshop is to address some of the negative impacts pre-processing, processing and post-processing operations of the artisanal producers have on the quality of palm oil.

According to Prof. Boateng, their investigations have revealed that processing operations of the palm oil further deteriorates the quality of the produce as it is subjected to excessive heating which destroys the carotene content that gives the palm oil its reddish colour: hence the addition of Sudan IV chemical by producers to restore the colour.

 “The institute exists to bridge the gap between industry and academia, and to solve critical issues. So when this issue of palm oil adulteration came up, we decided to use our institute to see how best we could address the issue. So this workshop is actually a platform to get close to the processors, so that we can listen to them on how they process the palm oil and see how we can help them.

“If you listen to them you realise that they add certain things, and the reasons why they add them is that they don’t see it as harmful.  So our goal is to take them through all the stages of getting the palm oil ready for market,” Professor Boateng said.

One major suggestion that came out of the workshop from industry players was for the establishment of a board for the palm oil sector to provide oversight of the product’s market in the country, just as is done in the cocoa sector.

This call was made by the Chief of Adankrono, Osabarima Sarpong Kumankuma II - a processor himself, who opined that the formation of a palm oil marketing board will help fight the issue of adulteration since processors would supply their products to only one central body and be forced to comply with standards set by the board.

“The reason why some of the processors add some chemicals to their product is that when the buyers from outside the country come to make purchases of the palm oil, they tell the local processors to add those chemicals (Sudan IV) to the oil to give it a more reddish colour. And since they (the processors) don’t have any better market in the country, they are forced to add it so that the foreigners will buy their products.

“So I think the best way for government to address the situation is to form a palm oil marketing board that will be a central point where all the processors supply to. They will then not be influenced to add chemicals before they are bought,” Osabarima Sarpong said.

This opinion is also seconded by Professor Boateng, who said the formation of a board to oversee the marketing of palm oil is “long overdue”.

Another industry player in the sector, Ato-Kwamena Budu-Amoako-who is also a processor at Abodom, said there is an urgent need for a government policy that guides activities of the sector.

He added countries which have succeeded in making palm oil a significant contributor to their GDPs have effective land tenure systems that make land easily accessible by farmers; and also have made funds available to boost the capacity of processors to produce more.

“Lack of policy is one major problem of the sector. You need government to team up with academia to develop research that will guide the industry, but that is missing in this country.

“Those who have succeeded undertook major reforms in respect of land acquisition and access to finance. These are the two critical issues. Before you go into oil palm plantation you need land. However, the land tenure system in Ghana is not the best. So what government should do is acquire lands and lease them to farmers at good rates, and provide seed capital and inputs so that we can produce more.” 

The Institute of Applied Science and Technology (IAST) at the University of Ghana was established in 2012 within the framework of the University of Ghana Strategic Plan, aimed at addressing national, social and economic development needs. 

IAST is positioned to support and facilitate the development of consumer needs-driven programmes and third party linkages; actively enhance and leverage the competitive strengths and core competencies of research, teaching, and extension services of the University; privatise non-core and non-performing activities of the university; and actively market and disseminate information, activities and outputs of the university; and undertake resource mobilisation.

The mandate of the Institute is to mobilise the intellectual, physical and human resources and assets of the University of Ghana and those of its partners and stakeholders to produce, share and apply relevant and inter-disciplinary research, knowledge and best practices that address national needs through innovation, training, partnerships, engagement and thought-leadership.

The university hopes that the institute intervention will result in tremendous growth of the palm oil sector if the much-needed attention is given by government.

Quick facts

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

Cote d’Ivoire earns 60% of its GDP from Agriculture, and oil palm is the 3rd export agricultural commodity.

Cote D’Ivoire records a higher plantation productivity of 25mt/ha, while Ghana with similar favourable soil and climatic conditions yields average 15mt/ha

Indonesia’s oil palm industry generates over US$12.4billion in foreign exchange and employs about 2 million Indonesians.

Oil palm in Malaysia adds 5-6 % contribution to its GDP.

Malaysia produces (19,000,000tonnes), Indonesia: (28,500,000tonnes), Thailand: (2,000,000tonnes); and Africa’s first-ranked Nigeria produces (910,000tonnes) with Ivory Coast (390,000tonnes) palm oil/year, while Ghana ranks 15th in the world (243,852tonnes per year).