In this post I’ve provided a brief overview of six value chains with potential for expansion, rural poverty reduction, and job creation. The brief covers cassava (gari), maize, irrigated maize, pineapple, sorghum, and soybean. These commodities are based on interventions tested and proven by several agricultural development projects implemented in Ghana.
The cassava gari chain is very profitable and has high potential for employment creation in rural areas, in particular for women in processing and young men in outgrower schemes. However, the initial investment barrier is high for women groups; private investors do not have incentives to do environmental impact mitigation investments; market prices are characterized by a strong cyclical component (cycle of 4-5 years) which has an impact on creditworthiness of investors.
Maize accounts for 50 to 60% of total cereal production in Ghana. Overall, the production and trade is profitable, but more risky in northern Ghana that has only one cropping season per year, because of erratic rains and limited seasonal price fluctuations (limited price increases to remunerate storage after harvest, because southern Ghana has two harvests).
Soybean is a weak value chain in Ghana because it’s not well understood, but important for its potential impact on nutrition, animal feed and soil fertility.
The sorghum value chain is important for food security and poverty reduction, in particular for subsistence farmers.
Pineapple and irrigated maize chains are typically targeted through national value chains, as these chains are quite sophisticated in terms of technology and market linkages. Without stable market linkages, markets are easily saturated. Requirements for investment capital and working capital are typically high. The pineapple value chain is healthy and seemingly capable of expansion, both for the domestic and export market. Data from some agricultural development projects gives the Internal Rate of Returns (IRR) for pineapple at 144%, that for irrigated fresh maize is 76%.
Beyond the value chains presented above, there are also multiple, less well documented opportunities to support Ghana’s young people through value chain development. Such opportunities include supporting complete value chains: aqua culture, butternut squash, citrus fruit, fresh vegetables, mango, onion, rice, cassava (kokonte) and sorghum. Each of these has been explored in a rudimentary way and each of these has either a robust but underserved domestic market or export potential. Other opportunities include supporting critical bottlenecks affecting multiple value chains: irrigation equipment, quality seed multiplication, and organic input support.
Solomon Elorm Allavi; Email: email@example.com