GHANA
EXPORT MARKETING AND QUALITY AWARENESS PROJECT
APPRAISAL REPORT
TABLE OF CONTENTS
PROJECT INFORMATION SHEET, CURRENCY AND MEASURES,
ABBREVIATIONS,
SOCIO-ECONOMIC
INDICATORS,
PROJECT
FRAMEWORK, EXECUTIVE SUMMARY. i---xii
1.
LIST OF
LOGICAL
INTRODUCTION .............................................................................................................................. 1
1.1 Origin and History of the Project.....................................................................................1
2.
THE AGRICULTURE SECTOR ..................................................................................................... 2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
3.
THE EXPORT SUB-SECTOR.......................................................................................................... 8
3.1
3.2
3.3
3.4
3.5
4.
Project Concept and Rationale.......................................................................................20
Project Area and Beneficiaries.......................................................................................22
Strategic Context............................................................................................................23
Project Objective............................................................................................................24
Project Description.........................................................................................................24
Production, Markets and Prices .....................................................................................31
Environmental Impact....................................................................................................33
Project Costs ..................................................................................................................34
Sources of Financing and Expenditure Schedule...........................................................35
PROJECT IMPLEMENTATION .................................................................................................. 36
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
6.
Traditional Exports ..........................................................................................................8
Non-Traditional Exports ..................................................................................................9
Cassava...........................................................................................................................13
Institutional Framework.................................................................................................14
Potentials and Constraints..............................................................................................19
THE PROJECT ................................................................................................................................ 20
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
5.
Salient features.................................................................................................................2
Socio-Economic Situation and Production ......................................................................3
Land Tenure .....................................................................................................................3
Poverty Status ..................................................................................................................4
Gender Issues ...................................................................................................................6
HIV/AIDS and Malaria....................................................................................................6
Agricultural and Rural Development Policy Framework ................................................7
Interventions of Major Donors in the Sector ...................................................................7
Executing Agency ..........................................................................................................36
Institutional Arrangements.............................................................................................36
Supervision and Implementation Schedule....................................................................37
Procurement Arrangements............................................................................................38
Disbursement Arrangements..........................................................................................40
Monitoring and Evaluation ............................................................................................40
Financial Reporting and Auditing..................................................................................41
Aid Co-ordination ..........................................................................................................42
PROJECT SUSTAINABILITY AND RISKS................................................................................ 42
6.1 Recurrent Costs ..............................................................................................................42
6.2 Project Sustainability .....................................................................................................43
6.3 Critical Risks/Assumptions and Mitigation Measures...................................................44
7.
PROJECT BENEFITS..................................................................................................................... 46
7.1
7.2
7.3
7.4
8.
Financial Analysis..........................................................................................................46
Economic Analysis ........................................................................................................47
Social Impact Analysis...................................................................................................47
Sensitivity Analysis........................................................................................................48
CONCLUSIONS AND RECOMMENDATIONS.......................................................................... 49
8.1 Conclusions....................................................................................................................49
8.2 Recommendations..........................................................................................................49
List of Tables
Table 3.1: Volume and Value of Non-Traditional Exports in Year 2000–2003..................................................... 9
Table 3.2: Market Indicators for NTEs Produced by Ghana ................................................................................. 10
Table 4.1: Summary of the Project Cost Estimates by Component....................................................................... 35
Table 4.2: Summary of the Project Cost by Category of Expenditure .................................................................. 36
Table 4.3: Sources of Finance .............................................................................................................................. 36
Table 4.4: Expenditure Schedule by Component (million UA) ............................................................................ 36
Table 4.5: Expenditure by Source of Finance (million UA).................................................................................. 36
Table 4.6: Expenditure Schedule y Source of Finance (million UA) .................................................................... 37
Table 5.1: Key Implementation Target Dates ....................................................................................................... 39
Table 5.2: Procurement Arrangements.................................................................................................................. 41
Table 6.1: Recurrent Expenditure Schedule by Source of Finance. (million UA) ................................................ 44
List of Annexes
Number of Pages
ANNEX I:
Map of the Project Area…………………………………………………… 1
ANNEX II: Project Organization Chart ……………………………………………… 1
ANNEX III: Project Implementation Schedule ………………………………………… 1
ANNEX IV: List of Goods and Services ……………………………………………….. 1
ANNEX V: List of On-going and Completed Projects as at 31 March 2005 ……….… 2
ANNEX VI: Environmental and Social Management Summary ……………………….. 2
ANNEX VII: Summary Financial and Economic Analysis ……………………………. 1
ANNEX VIII: Evolution of Horticultural Products Exports (2000-2004)………………. 1
This report was prepared by Ms. Esther Kasalu-Coffin, Principal Agric. Economist, OCAR.2, Mr. Touba
Bedingar, Principal Agricultural Economist, OCAR.1, Mr. Harouna Dosso, Senior Agronomist, OCAR.2,
Mr. Diop, Environmental Expert of OCAR.0, and two Consultants in Marketing and Financial Analysis.
Contributions were received from Mrs. Rita, Ba, Senior Gender Specialist, OCAR.0 as well as from OPSD.
Inquiries should be addressed to them or to Mr. Sami Z. Moussa, Manager, OCAR.2, ext. 2143.
i
AFRICAN DEVELOPMENT FUND
Angle des Trois Rues, Rue du Ghana, Rue Pierre de Coubertin, Rue Hedi Nouira
B.P. 323, 1002 TUNIS BELVEDERE, TUNISIA
TEL: (216) 71 333 511; FAX: (2I6) 71 332 992; E-MAIL: [email protected]
PROJECT INFORMATION SHEET
February 2005
The information given hereunder is intended to provide guidance to prospective suppliers,
contractors, consultants and all persons interested in the procurement of goods and services for
projects approved by the Boards of Directors of the Bank Group. More detailed information and
guidance should be obtained from the Executing Agency of the Government of Ghana.
1. Country
: Republic of Ghana
2. Project Title
: Export Marketing and Quality Awareness Project
3. Location
: In Central, Greater Accra, Eastern and Volta Regions
4. Borrower
: Republic of Ghana
5. Executing Agency
: Ministry of Food and Agriculture, Agricultural Services Sub-Sector
Investment Programme, P.O. Box M37, Accra, Ghana *Tel: (233)
21 665066 *Fax: (233) 21 780326
6. Project Description
:Project components: (i) Production and Productivity
Enhancement
(ii) Export Marketing Promotion and Infrastructure
Improvement (iii) Capacity Building (iv) Project Coordination
and Management
7. Total Cost
Foreign exchange
Local cost
: UA18.84 million
: UA 14.03 million
: UA 4.81 million
8. ADF Loan
: UA 17.00 million
9. Other Sources of Finance
: Government of the Republic of Ghana – UA1.84 million
10. Date of Approval
: June 2005
11. Probable Commencement Date and Project Duration
Commencement
: January 2006
Duration
: 5 Years
ii
12. Procurement of Goods, Works and Services
Procurement of goods, works and consultancy services financed by ADF resources will be
carried out in conformity with Bank Group Rules of Procedure. The procurement of civil
works (feeder roads, pack houses and farm building) will be by National Competitive
Bidding (NCB); Vehicles & equipment by International Competitive Bidding (ICB); and the
provision of training, consultancy services through competition on the basis of a short-list.
Contribution will be made to the Ministry of Health, the specialised Government body, in
support of HIV/AIDS prevention campaigns, and to the malaria prevention activities.
13. Consultancy Services Required
Consultancy services will be required for: (i) Technical Assistance services for developing
training materials and training in a wide range of areas; (ii) Training for farmers, and Farmers’
Associations, the staff of the project and the line ministries; (iii) Technical Assistance support to
conduct baseline surveys, mid-term review, audit, etc.; (iv) Studies including identifying
international markets and studying consumer preferences for Ghanaian horticultural produce (v)
Business planning, market analysis and strategy for high grade starch. All procurement of goods
and services financed by ADF Loan and ADF Grant resources will be in conformity with Bank
Group Rules of Procedure.
CURRENCY EQUIVALENTS (February 2005)
Currency Unit = Units of Account
UA 1 = USD 1.5205
UA 1 = Cedis 14,061.4
Fiscal Year
1st January – 31st December
Weights and Measures
Metric systems
1kg = 2.2 pounds
iii
ACRONYMS AND ABBREVIATIONS
AAGDS
ACSo
ADF
AESD
AfDB
AGOA
AgSSIP
ACFA
CBO
CF
CIF
COLEACP
CSIR
CSP
DFI
DFID
DGRC
DADU
EA
EC
ECOSOC
ECOWAS
EDIF
EDPA
EIRR
ESMP
ESSD
EU
FAGE
FAO
FASDEP
FOB
FDB
FIRR
GAP
GDP
GEPC
GoG
GPRS
GPS
GSB
GTZ
Ha
HAG
HEII
HIPC
ICB
JITAP
kg
Accelerated Agricultural Growth and Development Strategy
Ayensu Starch Company
African Development Fund
Agricultural Engineering Services Department
African Development Bank
African Growth and Opportunity Act
Agricultural Services Sub-Sector Investment Programme
Ayensu Cassava Farmers Association
Community Based Organisation
Credit Facility
Carriage, Insurance and Freight (Incoterms 2000)
Comite pour Liaison Europe ACP
Council for Scientific and Industrial Research
Country Strategy Paper
Designated Finance Initiative
Department for International Development
General Directorate for Regulation and Control
District Agricultural Development Unit
Executing Agency
European Commission
United Nations Economic and Social Council
Economic Community of West African States
Export Development and Investment Fund
Export Development and Promotion Account
Economic Internal Rate of Return
Environmental and Social Management Plan
Environmentally and Socially Sustainable Development Network
European Union
Federation of Associations of Ghanaian Exporters
Food and Agriculture Organisation of the United Nations
Food and Agricultural Sector Development Policy
Free on Board (Incoterms 2000)
Food and Drugs Board
Financial Internal Rate of Return
Good Agricultural Practices
Gross Domestic Product
Ghana Export Promotion Council
Government of Ghana
Ghana Poverty Reduction Strategy
Global Positioning System
Ghana Standards Board
Gesellschaft fur Technische Zusammenarbeit – German Government Agency for
International Co-operation
Hectares
Horticultural Association of Ghana
Horticultural Export Industry Initiative
Heavily Indebted Poor Country
International Competitive Bidding
Joint Integrated Technical Assistance Programme to Selected Least Developed and
other African Countries
kilogramme
iv
km
MDG
MOFA
MOFEP
MOTI
MOPS-PSI
MOH
Mt
NAEP
NCB
NEPAD
NGO
NMTIP
NTAE
OCAB
PIP
PCMU
PPMED
PRSP
PSC
PY
SPEG
SSA
TIPCEE
TIRP
RADU
RDS
RMC
SME
UA
UBA
USD
USAID
VEPEAG
WHO
kilometre
Millennium Development Goal
Ministry of Food and Agriculture
Ministry of Finance and Economic Planning
Ministry of Trade and Industry
Ministry of Private Sector Development and Presidential Special Initiatives
Ministry of Health
Metric tonne
National Agricultural Extension Policy
National Competitive Bidding
New Partnership for Africa’s Development
Non-Governmental Organization
National Medium-Term Investment Programme
Non-Traditional Agriculture Exports
Organization Commune Ananas Banane
Pesticides Initiative Programme
Project Coordination and Management Unit
Programme Planning Monitoring and Evaluation Directorate (of MOPA)
Poverty Reduction Strategy Paper
Project Steering Committee
Project Year
Sea-Freight Pineapple Exporters of Ghana
Sub-Saharan Africa
Trade and Investment Program for a Competitive Export Economy
Trade and Investment Reform Programme
Regional Agricultural Development Unit
Rural Development Strategy
Regional Member Country (Member of the Bank Group)
Small and Medium Enterprises
Units of Account (for the African Development Bank Group)
Union Bananière Africain
United States Dollar
United States Agency for International Development
Vegetable Producers and Exporters Association of Ghana
World Health Organisation
v
Ghana
COMPARATIVE SOCIO-ECONOMIC INDICATORS
2003
2.1
2.0
1.9
2003
ghana
2002
2001
Africa
Life Expectancy at Birth (Years)
71
61
51
41
31
21
11
1
2003
ghana
2002
102.3
102.0
99.5
100.8
82.0
1.2
0.8
1.6
5.9
2002
91.0
105.0
88.0
45.8
51.0
26.6
19.0
34.2
3.9
2.2
2001
88.7
80.3
42.9
41.3
46.3
36.9
28.4
45.2
5.7
2001
81.0
78.0
38.0
34.0
21.0
25.1
18.2
32.7
4.1
2.3
2000
2001/02
2001/02
2001/02
2001/02
2001/02
2003
2003
2003
1999/2000
2.4
2000
99.0
100.0
100.0
100.0
0.3
11.0
93.0
90.0
…
3 285
6.3
2000
56.0
78.0
80.0
52.0
1.3
144.0
82.0
73.0
31.0
2 675
…
2.5
1999
44.0
64.4
61.7
42.6
6.4
109.7
81.0
71.7
25.9
2 444
5.1
2.6
1999
44.0
79.0
25.0
58.0
3.4
56.6
92.0
80.0
24.9
2 667
4.7
1999
1998
2002
1992-99
2002
2003
2000
2003
2003
1999
2002
2001
Population Growth Rate (%)
1998
0.6
0.5
18.0
14.3
48.3
94.7
25.4
78.0
79.3
12.0
10.3
7.5
10.2
13
1.7
74.0
1998
1.7
2.9
32.4
5.1
61.1
103.3
26.9
62.0
66.3
24.0
8.4
60.9
79.8
440
2.8
59.0
Africa
1997
2.2
3.8
42.0
3.3
86.1
99.0
24.0
50.7
51.7
37.0
15.2
80.6
133.3
661
4.9
40.0
ghana
1997
2.2
4.2
40.6
3.5
75.8
99.0
25.0
58.3
59.6
31.4
9.9
56.4
90.4
540
4.0
25.0
800
700
600
500
400
300
200
100
0
1996
Africa
Infant Mortality Rate
( Per 1000 )
100
80
60
40
20
0
2003
Source : Compiled by the Statistics Division from ADB databases; UNAIDS; World Bank Live Database and United Nations Population Division.
Notes:
n.a. Not Applicable ; … Data Not Available.
2002
Africa
2001
ghana
2000
11.6
-0.2
12.3
1999
9.9
0.4
1.9
1998
6.2
0.7
1.2
1997
15.8
1.3
0.2
1996
2003
1995
1998
1995
Environmental Indicators
Land Use (Arable Land as % of Total Land Area)
Annual Rate of Deforestation (%)
Per Capita CO2 Emissions (metric tons)
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2000
2003
1998-2003
GNI per capita US $
1995
Education Indicators
Gross Enrolment Ratio (%)
- Total
Primary School
Primary School
- Female
Secondary School - Total
Secondary School - Female
Primary School Female Teaching Staff (% of Total)
Adult Illiteracy Rate - Total (%)
Adult Illiteracy Rate - Male (%)
Adult Illiteracy Rate - Female (%)
Percentage of GDP Spent on Education
54 658
1,200.3
78.0
22.9
26 214
54.6
44.9
0.905
n.a.
20.0
1996
Health & Nutrition Indicators
Births attended by Trained Health Personnel (%)
Access to Safe Water (% of Population)
Access to Health Services (% of Population)
Access to Sanitation (% of Population)
Percent. of Adults (aged 15-49) Living with HIV/AIDS
Incidence of Tuberculosis (per 100,000)
Child Immunization Against Tuberculosis (%)
Child Immunization Against Measles (%)
Underweight Children (% of children under 5 years)
Daily Calorie Supply per Capita
Total expenditure on health as % of GDP
80 976
5,024.6
43.1
60.6
1 154
45.6
39.7
0.655
n.a.
23.0
1995
Crude Death Rate (per 1,000)
Infant Mortality Rate (per 1,000)
Child Mortality Rate (per 1,000)
Maternal Mortality Rate (per 100,000)
Total Fertility Rate (per woman)
Women Using Contraception (%)
2003
2003
2003
2003
2003
2003
2002
2002
1995
239 30 061
20.9 849.5
42.2
39.2
87.7
28.3
320
704
50.1
43.3
50.2
41.0
0.564 0.476
131
n.a.
…
46.7
1998
Crude Birth Rate (per 1,000)
Developed
Countries
1997
Demographic Indicators
Population Growth Rate - Total (%)
Population Growth Rate - Urban (%)
Population < 15 years (%)
Population >= 65 years (%)
Dependency Ratio (%)
Sex Ratio (per 100 female)
Female Population 15-49 years (% of total population)
Life Expectancy at Birth - Total (years)
Life Expectancy at Birth - Female (years)
Developing
Countries
1996
Popul. Living Below $ 1 a Day (% of Population)
Ghana Africa
1995
Basic Indicators
Area ( '000 Km²)
Total Population (millions)
Urban Population (% of Total)
Population Density (per Km²)
GNI per Capita (US $)
Labor Force Participation - Total (%)
Labor Force Participation - Female (%)
Gender -Related Development Index Value
Human Develop. Index (Rank among 174 countries)
Year
vi
LOGICAL FRAMEWORK FOR THE PROJECT LOAN
Narrative Summary
Mid Term
Measurable Indicators
End of Project
Measurable Indicators
Means of
Verification
Key Assumptions/Risks
Sector Goal:
Export earnings of non-traditional
agricultural products increased
At least 20% increase in export earnings of nontraditional agricultural products by year 2008.
By 2008, average annual household incomes per
Project Objectives
Incomes for horticultural crop farmers and hectare of farmers in horticulture and cassava
exporters and of cassava producers production increase:
increased.
-Pineapple: from Cedis 11m to 21m
-Papaya : from Cedis 43m to 51m
-Egg plant : from Cedis 14m to 16m
-Chillies : from Cedis 0.5m to 2.5m
-Cassava : from Cedis 1.3m to 2.8m
OUTPUTS
A. Production and Productivity
Enhancement
1. Demonstration farms established in
each region for application of Good
Agricultural Practices (GAP).
2. Production protocol and manuals of
GAP published and market requirements
documented by Ghana Export Promotion
Council
3. Improved seed and planting materials
diffused to farmers for horticultural crops
for cassava.
4. Production of horticultural crops and
cassava increased
At least 50% increase in export earnings of
non-traditional agricultural products by
year 2010.
By 2010, average annual household incomes
per hectare of farmers in horticulture and
cassava production increase:
-Pineapple: from Cedis 21m to 31million
-Papaya : from Cedis 51m to 59million
-Egg plant : from Cedis 16m to 17million
-Chillies : from Cedis 2.5m to 5million
-Cassava : from Cedis 2.8m to4.4million
- Agriculture
statistics from
Statistics Office.
- Agriculture
statistics from
Statistics Office.
- Project Progress
Reports.
1. Continued conducive agricultural and
economic policies support agriculture
intensification. The Bank to continue
dialogue.
2. Farmers’ will adopt GAP in the production
of horticultural export crops and cassava and
the use of improved planting materials and
seed. Mitigation: Farmer mobilization and
training in GAP.
1. Four demonstration farms are established and
functioning by the year 2008.
1. Four demonstration farms continue to
function by the year 2010.
- Project Progress
Reports
1. The growth rate in demand for
horticultural crops being promoted remain
high. Mitigation: Marketing Strategy
2. 15,000 production protocols and manuals on
good agriculture practices are distributed to
farmers and other stakeholders by year 2008
2. 30,000 production protocols and
manuals on good agriculture practices
are distributed to farmers and other
stakeholders by year 2010
- Monitoring &
Evaluation
Reports
2. The supply of cassava will be continuous
to enable Ayensu Starch Company to
consistently operate at full capacity.
3. Yield levels in horticultural crops and cassava
increase by 2008:
-Pineapple: from 11Mt/ha. to 26Mt/ha.
-Papaya: from 13.5Mt/ha to 25.5Mt/ha
-Egg plant: from 6Mt/ha to 12Mt/ha
-Chillies: from 4Mt/ha to 8Mt/ha
-Cassava: from 25Mt/ha to 37.5Mt/ha
4. By 2008, total production of horticultural
crops and cassava increase, of which 50% of
horticultural crops is exported:
-Pineapple : from 42Mt. to 60Mt.
-Papaya
: from 13.9Mt to 37Mt
-Egg plant : from 2.3Mt to 20.3Mt
-Chillies : from 0.6Mt to11Mt
-Cassava
: from 0.17Mt to 2.17Mt
3. Yield levels in horticultural crops and
cassava increase by 2010:
-Pineapple: from 26Mt/ha. to 41Mt/ha.
-Papaya: from 25.5Mt/ha to 37Mt/ha
-Egg plant: from 12Mt/ha to 18Mt/ha
-Chillies: from 8Mt/ha to 12Mt/ha
-Cassava: from 37.5Mt/ha to 50Mt/ha
4. By 2010, total production of
horticultural crops and of cassava
increase, of which 80% is horticultural
crops is exported:
-Pineapple : from 60Mt. to 78.7Mt.
-Papaya
: from 37Mt to 60.7Mt
-Egg plant : from 20.3Mt to 39Mt
-Chillies : from 11Mt to 21Mt
-Cassava
: from 2.17Mt to 4.4Mt
- National plans and
budgets.
Mitigation: Farmers are being assisted under
the project to enable them produce cassava
throughout the year.
3. The MD2 variety from Ghana will meet
the consumer tastes and preferences on
the international market. Mitigation:
MD2 is already grown and exported by
Costa Rica and its demand on the
international market is increasing.
4. GAPs are adopted and improved planting
materials and seed are utilized. Mitigation:
Continue with Sensitization
vii
Mid Term
Measurable Indicators
End of Project
Measurable Indicators
Means of
Verification
1. Four brands for pineapple, papaya, chillies,
and egg plant catalogued and documented in a
report by year 2007.
1. 90% of farmers producing for export under the
developed brands for pineapple, papaya, chillies,
and egg plant by year 2010.
- Project Progress
Reports
3. Feeder Roads Improved
2.1 Four pack houses constructed, equipped
and functioning by year 2007
2.2 150km of feeder roads upgraded to yearround access by year 2008
2.1 90% of farmers using the pack houses by year
2010
2.2 407km of feeder roads upgraded to year-round
access by year 2010
4. Consumers’ needs on international market
for Ghana produce, documented.
3. 150km of feeder roads upgraded to yearround access by year 2008
3. 407km of feeder roads upgraded to year-round
access by year 2010
5. Major export destinations for Ghana’s
produce in EU aware of produce quality and
brands.
4. Report on markets for various products
available for consultation by 2007.
4. Report on markets for various products
available for consultation by 2007.
5. Report on marketing strategy for the four
major crops available by 2007.
5. Marketing strategy implemented for the four
major crops by 2010.
Narrative Summary
Key Assumptions/Risks
B. Export Marketing Promotion and
Infrastructure Improvement
1.
Trade Brands for Ghanaian produce
developed and used by exporters
1. The growth rate in demand for
horticultural crops being
promoted remain high.
Mitigation: Marketing Strategy
2.
Marketing and demonstration farm
facilities constructed and upgraded
C. Capacity Building
1. Smallholder producers and exporters in the
horticultural and cassava industry in the project
area are mobilized.
2. Smallholder producers and exporters, and
related activities are trained.
1. About 50,000 farmers and exporters
mobilized into groups / associations by
2008;
1. 80,000 farmers and exporters mobilized by
2010;
2. farmers, exporters and other related service
officials are trained, of which 2,000 (28%)
are women, by 2008:
- 300 executive and decision makers
- 800 export trade services staff
- 800 staff from MOFA
- 2,000 graders sorters and parkers
- 3,000 farmers
2. farmers, exporters and other related service
officials are trained, of which 4,700 (42%) are
women, by 2010:
- 600 executive and decision makers
- 1,200 export trade services staff
- 1,200 staff from MOFA
- 3,120 graders sorters and parkers
- 5,000 farmers
3. The two temperature-controlled trucks continue
to function efficiently by 2010.
4. Analysis of residual analysis in crops
undertaken.
3. Two temperature-controlled trucks are
provided & are being run efficiently by
2007.
4. One residual analysis laboratory at GSB is
constructed and being used by 2008.
D Coordination and Management
- Project activities well managed
1. HEII PCMU given the responsibility to
coordinate and manage the project by 2006;
1. PCMU coordinating and managing the project
effectively till end of project implementation
2. Indicators monitored & presented in quarterly
reports.
3. A holistic cold chain, in each of the 4
regions, established & operational.
2. Monitoring indicators selected by 2006.
4. All horticulture produce for export analyzed for
residuals at GSB.
- Monitoring &
Evaluation
Reports
- National plans and
budgets.
2. The supply of cassava will be
continuous to enable Ayensu
Starch Company to consistently
operate at full capacity.
Mitigation: Farmers are being
assisted through the project to enable
them produce cassava throughout the
year.
3. The MD2 variety from Ghana
will meet the consumer tastes and
preferences on the international
market. Mitigation: MD2 is
already grown and exported by
Costa Rica and its demand on the
international market is
increasing.
4. GAPs are adopted and improved
planting materials and seed are
utilized. Mitigation: Continue with
Sensitization
viii
ACTIVITIES
A. Production and Productivity Enhancement
1. Executing Agency (EA) assign relevant staff to manage the demonstration farms. Key staff areSubject Matter Specialists, Extension Workers and Irrigation Technicians, based in respective districts.
2. EA procure farm and packaging equipment, inputs and supplies for demonstration farms;
3. Demonstration farm team prepares crop-specific plots at the demonstration farms, for training in good
agricultural practices for export market.
4. CSIR multiply MD2 pineapple cultivars for farmers;
5. CIR to Coordinate development, production and distribution of quality seeds for horticultural crops
6. CIR conduct adaptive Research and Development for Potential new crop varieties
B. Export Marketing Promotion and Infrastructure Improvement
1. Recruit international TA to undertake brand promotion and to develop marketing strategies for the
selected horticultural crops;
2. Collect market information and consumer preferences;
3. Upgrade feeder roads;
4. Construct farm buildings and lodging and training facilities at the four demonstration farms;
5. Construct Pack Houses;
6. Construct a residual analysis lab
C. Capacity Building
1.
2.
3.
4.
5.
Sensitization, formation and registration of groups/associations of horticultural small holder producers
and exporters
Formation and registration of groups/associations of cassava producers
Train horticultural producers, exporters, traders, sorting and packing workers, service officials,
decision makers;
Train cassava producers, association workers and elected leaders
Procure temperature-controlled trucks for horticultural farmers’ and exporters and tractors for the
Cassava Farmers’ Association
D. Project Coordination and Management
1. Assign responsibility to existing HEII project team the responsibility to coordinate & manage the
project.
2. Appoint additional members to the existing HEII Steering Committee to meet the requirements of the
project.
FINANCIAL
RESOURCES
Costs:
Component A: UA million
Component B: UA million
Component C: UA million
Component D: UA million
3.86
11.44
1.60
1.57
18.84
Total: UA million
Source of financing:
ADF Loan: UA million
Governments: UA million
17.00
1.84
18.84
Total: UA million
ix
EXECUTIVE SUMMARY
Project Background
1. Exports of horticultural produce falls into the category of non-traditional exports1, in Ghana.
The Government of Ghana (GoG) has identified increase of non-traditional exports as a central
element of Ghana’s strategy to become a middle-income country by the year 2020. This will
require a doubling of its economic growth rate, sustained over several years. While traditional
exports of cocoa and gold remain an important source of economic growth and foreign exchange,
export diversification is necessary to accelerate economic growth and poverty reduction and to
minimize the country’s vulnerability to external price shocks. Diversification into the
horticultural export industry has the potential to provide just the required acceleration in
economic growth.
2. During the last ten years, Ghana has experienced significant growth in export of tropical fruits
and vegetables. In 1992 the horticultural sub-sector contributed USD6.77 million to the country’s
foreign exchange earnings. Within the space of 10 years, to 2001, the contribution of the subsector grew nearly four-fold to USD26.85 million, making up 40% of total earnings accruing to
non-traditional agricultural exports.
3. Given the important contribution of the sub-sector, the GoG has set a target to increase export
earnings from horticultural exports to more than 50% of its non-traditional export earnings, by
the year 2010. This will result in an increase of horticultural and processed cassava products’
exports to more than $200 million per year. The total non-traditional export sector in Ghana is
currently estimated at $400 million at FOB prices of which $30 million is horticultural produce.
However, recent studies demonstrate that this situation is fragile and that the industry faces
important challenges to respond to opportunities on the international market that cannot be met
by the private sector alone.
4. Ghana’s main horticultural export products are pineapple, cashew, papaya, banana, mango,
yam, and vegetables and to a small extent fresh cut flowers. Growth in the horticultural subsector is led by pineapples, the exports of which showed remarkable improvement from 9,754
tonnes in 1992 to 35,174 tonnes in 2001, resulting in an increase in foreign exchange earnings
from a low of USD4.4 million in 1992 to USD22.1 million in 2004. The growth in pineapple
production has been due to favourable growing conditions. The quality of pineapples varies. They
are mainly marketed in Europe, where consumers have shifted their preference towards an MD2
variety against the Smooth Cayenne produced in Ghana. The MD2 variety is grown in Costa Rica
and other countries such as Honduras and Ecuador. These countries have entered the European
Union market in a significant way and are becoming a threat for Ghanaian pineapples to maintain
market share.
5. It is therefore important for Ghana to adjust its product to market dictates in as short a period
as possible. The ongoing crisis in the pineapple industry underscores the high level of
vulnerability of the industry. Papaya is another relatively new crop to Ghana and exports have
risen dramatically in the last 5 years. Exports of vegetables are also rapidly expanding with focus
on chilli, tinda and aubergine. Ghana also has a lot of potential in developing the processing of
cassava into products for exports, which the Government has set itself to realize.
1
The official definition of non-traditional exports in Ghana, adopted in 1995, includes all merchandise exports
except for cocoa beans, logs and lumber and mining products. Horticultural crops make up a major part of this
classification.
x
6. The global market for tropical fruits and vegetables exported from Ghana (Pineapple, Papaya,
Mango, Aubergine, Chillies, Other Vegetables) is estimated at $25 billion, and is dominated on
the supply side by countries from South and Central America such as Brazil, Mexico, Costa Rica,
as well as the Netherlands and Côte d’Ivoire. During the last five years, the industry has
witnessed the emergence of new producers such as Malaysia and re-exporters most of which are
European countries. Despite its comparative advantage in the production of these horticultural
crops, Ghana faces strong competition from the above-mentioned countries and it is urgent that
the country improves its performance in order to take advantage of new opportunities and to
reinforce its competitiveness in the export markets.
7. The opportunities presented in the horticultural export industry led the GoG to approach the
Bank Group to finance a comprehensive study on agro-industries in 2000 through an ADF grant.
Several projects were identified under the study, including the Export Marketing and Quality
Awareness Project, with the view to improve quality, increase quantity and build confidence in
the agriculture export sector in Ghana. At the request of the GoG, in 2003, the Bank recruited a
consulting firm to prepare the proposed project. The GoG also requested the Bank to consider
financing increased small-scale farming cassava production for processing into higher-grade
starch for export. As a result, an identification mission of the Bank visited Ghana in July 2004, to
collect information and data on cassava production and processing. In February 2005, the Bank
Group fielded a mission to appraise the project. This appraisal report is based on information
contained in the project preparation report, the identification report of the cassava initiative, as
well as analysis of data collected during the appraisal mission.
8.
The Export Marketing and Quality Awareness Project will address specific constraints
which currently limit the development of this growth sector, and will increase its potential to
achieve higher productivity and added value by improving the performance of its supply chains
and its competitiveness on export markets. It is in line with the strategies of the GoG to boost the
export sector in order to contribute to poverty reduction and is consistent with the Bank Group’s
strategy for Ghana, which focuses on poverty reduction.
Purpose of the Loan
9.
The ADF loan of UA17.00 million amounting to 90% of the total project cost will be used
to finance 100% of the foreign exchange cost of the project (equivalent to UA14.03 million) as
well as 61.75% of the local costs (equivalent to UA2.97 million).
Sector Goal and Project Objective
10.
The project will contribute towards the goal of increasing export earnings of nontraditional agricultural products. The objective of the project is to increase incomes of
horticulture crop farmers and exporters and of cassava producers.
Brief Description of the Project’s Outputs
11. The project will be implemented over five years in four regions. It will have four
components, namely (i) Production and Productivity Enhancement; (ii) Export Marketing
Promotion and Infrastructure Improvement; (iii) Capacity Building; and (iv) Project Coordination
and Management.
12. Production and Productivity Enhancement: The envisaged outputs of component are: (i)
Four established and equipped demonstration farms; (ii) Increased volume of MD2 pineapple
suckers and quality seeds of other horticultural crops available to farmers. (iii) Increased
xi
availability of improved planting materials for farmers in the Ayensu area. The outcome of this
output is increased production of cassava with high starch content to meet the demand at the
Ayensu Starch Company, which will in turn lead to increased incomes for cassava small-scale
farmers. These outputs will contribute to the improvement of quality and productivity of produce,
which will emanate from improved technology of high quality and high yielding planting
materials.
13. Export Market Promotion and Infrastructure Development: The main outputs of this
component will include (i) established living database on market information and consumer
preferences, and documented marketing strategies for the selected horticultural crops; (ii) 407 km
of year-round accessible feeder road network; (iii) established cold chain in each of the four
regions under the project. All these outputs will contribute to the promotion of export markets of
horticultural crops and of cassava starch from the Ayensu Starch Company as well as to increased
incomes of producers and associated actors in the industry. All of these activities will
complement those of the ongoing Trade and Investment Program for a Competitive Export
Economy (TIPCEE), financed by USAID, as well as the World Bank-financed Horticultural
Export Industry Initiative (HEII).
14. Capacity Building: The two major outputs expected from this component are (i) trained
horticultural producers and exporters, cassava farmers; farm workers, extension personnel, seed
inspectors, and other private entrepreneurs; (ii) strengthened horticultural farmers’ and exporters’
associations. From these outputs there will be increased production as more farmers use
improved planting materials and reduce post-harvest losses, once they have received the required
knowledge using effective method of dissemination of technology at the established
demonstration farms, all of which will in turn result in higher levels of quality produce for
exports and cassava for the Ayensu processing factory. Activities under this component will
include sensitisation of farmers, farm workers, processors, community based organizations
(CBOs), out of which 40% will be women
15.
Project Coordination and Management: A Project Coordination and Management Unit
(PCMU) has been established under the Horticultural Export Industry Initiative (HEII) financed
by the World Bank. The team is led by a full-time coordinator, whose only task is to manage the
project, and includes three other technical specialists, in the fields of (i) research, innovation,
food safety; (ii) infrastructure; (iii) horticultural planting materials and seeds. In addition to this
team, the Government will assign to the project a Monitoring and Evaluation officer to work
closely with the current HEII technical team, who will remain in the Programme Planning
Monitoring and Evaluation Directorate of MOFA (PPMED) to strengthen project management.
Support staff will provided by AgSSIP. The PCMU will supervise the selection and screening of
individuals who will participate in the various training programs and will also supervise the work
of all consultants recruited under the project.
Project Cost
16. The total cost of the project is UA18.84 million, including 12% local price escalation and
5.65% foreign price escalation, per annum.
Sources of Finance
17. The project will be financed jointly by the ADF and the GoG. The Fund’s contribution is
UA17.0 million, equivalent to 90% of the total project cost, including 100% of the foreign
exchange cost, representing UA14.03 million, and 61.75% (amounting to UA2.97 million) of
xii
local costs associated with operations and maintenance, training and workshops. The GoG
contribution is estimated at UA1.84 million, equivalent to 10% of the total project cost. The
Government contribution will cover salaries of project staff, office utilities for the project
management as well as maintenance of vehicles.
Project Implementation
18. The project will be implemented over a period of 5 years. The Executing Agency of the
project will be the Ministry of Food and Agriculture, AgSSIP.
Conclusions and Recommendations
19.
The Export Marketing and Quality Awareness project, designed with the active
involvement of stakeholders in the country, will contribute to increasing the production and
exports of horticultural products as well as the production of cassava. The project will address
specific constraints which currently limit the development of this growth sector and will increase
its potential to achieve higher productivity and added value by improving the performance of its
supply chains and its competitiveness on export markets.
20.
By training extension workers, representatives of CBOs and leaders of associations who,
in turn, will train farmers and exporters for increased value addition at the farm level, the project
will contribute to one of the fundamental goals of Regional Member Countries of increasingly
adding value to agriculture products. This will ensure higher returns to small-scale operators who
are usually the poor segments of the population, and comprise mainly women. Support under the
Production and Productivity Enhancement Component will contribute towards the export of
increased amounts of high quality produce which will generate increased foreign exchange to
Ghana. Activities under the Export Marketing Promotion and Infrastructure Improvement
component will create awareness among exporters and buyers from importing countries. It will
also increase trade with countries in the ECOWAS region. With improved human and
institutional capacity, the project will help to mitigate some of the major constraints to the
industry. This will strategically position Ghana to effectively find a niche and compete in the
global horticultural market.
1.
INTRODUCTION
1.1
Origin and History of the Project
1.1.1 The development of non-traditional exports2, under which horticultural exports fall, is
a central element of Ghana’s strategy to become a middle-income country by the year 2020.
To realize this aspiration, Ghana needs to continue increasing its economic growth rate (real
GDP growth of 5.8% in 2004 from 5.2% in 2003), and to sustain the upward trend over
several years. A number of studies of the country’s agriculture have suggested the potential
for transforming both the sector and the economy with a view to enhancing productivity.
These studies have also indicated the need for growth in agriculture as a necessary condition
to stimulate growth in other sectors as well. While traditional exports of cocoa and gold
remain an important source of this needed economic growth and foreign exchange, export
diversification is necessary to accelerate economic growth and poverty reduction and to
minimize the country’s vulnerability to external price shocks. The GoG, in line with the
Accelerated Agricultural Growth and Development Strategy (AAGDS), has focused on
reforming the cocoa industry while promoting selected non-traditional agricultural
commodities for which Ghana has or can develop comparative advantage to produce for the
domestic market and for export into regional and international markets. Horticultural crops
were identified as such non-traditional commodities.
1.1.2 The GoG has set a target to increase export earnings from horticultural exports, to
more than 50% of its current total export earnings by the year 2010. This will result in an
increase of horticultural and processed cassava products’ exports to more than $200 million
per year. The total non-traditional export sector in Ghana is currently estimated at $400
million at FOB prices of which $30 million is horticultural produce. However, recent studies
demonstrate that this situation is fragile and that the industry faces serious challenges in
responding to opportunities on the international market that cannot be met by the private
sector alone.
1.1.3 Given that Ghana is a major producer of cassava, for which it has comparative
advantage in production, there is a lot of potential to develop the processing of cassava into
higher value products for exports, which the Government has set itself to realize. For these
processing facilities to succeed there is need to ensure reliable and sustained availability of
cassava. Hence, support to cassava production, mainly by small-scale farmers, is a strategic
step for the Government.
1.1.4 The global market for tropical fruits and vegetables exported by Ghana (Pineapple,
Papaya, Mango, Aubergine, Chillies, Other Vegetables), estimated at $25 billion, has
historically been and remains dominated on the supply side by countries from South and
Central America such as Brazil, Mexico, Costa Rica, as well as the Netherlands and Côte
d’Ivoire. During the last five years, the industry has witnessed the emergence of new
producers, such as Malaysia, and re-exporters, most of which are European countries. Despite
the comparative advantage in the production of these horticultural crops, Ghana faces strong
competition from the above-mentioned countries and it is urgent that Ghana improves its
2
The official definition of non-traditional exports in Ghana, adopted in 1995, includes all merchandise exports
except for cocoa beans, logs and lumber, and mining products. Horticultural crops make up a major part of this
classification.
2
performance in order to retain the gains, to take advantage of new opportunities, and to
reinforce its competitiveness in the export markets. Failure to invest in accessibility of high
quality planting materials, key infrastructure, quality awareness and assurance, and marketing
will reverse even the gains made to date in the horticultural export industry.
1.1.5 The opportunities presented in the horticultural export industry led the GoG, to
approach the Bank Group to finance a comprehensive study on agro-industries in 2000
through an ADF grant. Several projects were identified under the study, including the
“Export Marketing and Quality Awareness project” with the view to improve quality,
increase quantity and build confidence in the agriculture export sector in Ghana. The results
of the study were shared with all the development partners in Ghana. This has generated an
overwhelming interest among donors, in particular the World Bank and USAID, which have
favourably responded with consistent investment into the sub-sector. As a follow up to the
study, the Government of Ghana requested the Bank Group to consider financing the Export
Marketing and Quality Awareness project. In 2003, the Bank responded by recruiting a
consulting firm to prepare the proposed project. The GoG also requested the Bank to consider
financing increased small-scale farming cassava production for processing into higher-grade
starch for export. As a result, an identification mission of the Bank visited Ghana in July
2004, to collect information and data on cassava production and processing. In February
2005, the Bank Group fielded a mission to appraise the project. This appraisal report is based
on information contained in the project preparation report, the identification report of the
cassava initiative, as well as the analysis of data collected during the appraisal mission.
1.1.6 The Export Marketing and Quality Awareness Project will address specific
constraints, which currently limit the development of this growth sector and will increase its
potential to achieve higher productivity and add value by improving the performance of its
supply chains and its competitiveness on export markets. It is in line with the strategies of the
GoG to boost the export sector in order to contribute to poverty reduction, and is consistent
with the Bank Group’s strategy for Ghana, which focuses on poverty reduction.
2.
THE AGRICULTURE SECTOR
2.1
Salient features
2.1.1 Ghana is located in West Africa, on the Gulf of Guinea, bordered by the republics of
Côte d’Ivoire, Togo and Burkina Faso. It covers a geographic land area of 238,539 km², and
has a population of about 21 million, growing at the rate of about 2.8%. Nearly 60% of the
population lives in rural areas. According to the United Nations Development Programme
(UNDP) Human Development Index, the country ranks 129 out of the 175 countries and is
classified as a Heavily Indebted Poor Country (HIPC). The country is divided into ten
administrative regions, which, in turn, are subdivided into 110 administrative districts.
2.1.2 Throughout Ghana, the mean annual temperature never falls below 25 degrees
Celsius, a consequence of the low latitude of Ghana and the absence of high altitude areas.
The country is divided into four diverse agro-ecological zones, which provide great potential
for the development of a wide range of crops, livestock and fisheries activities. (1) The
coastal savannah zone covers about 16,000 km² (7% of the total land area), with average
rainfall between 600mm and 1,150mm per annum. The vegetation is mainly constituted of
grass and scrub, generally a characteristic of poor soils. Maize, cassava, fruits and vegetables
are the most widely produced crops. (2) The forest zone covers about 84,000 km² (about
3
35% of the land area). The average annual rainfall ranging from 1,150 mm to over 2,000 mm
is the highest in the country. The principal crops are cocoa, cassava, plantain and yam. (3)
The forest-savannah transitional zone lies north of the forest zone, and covers, on average
1,450 mm of rain annually. The soils are fairly fertile and support a wide variety of crops
such as maize, yam, tobacco, and cassava and, to a lesser extent, plantains. (4) The guinea
savannah zone covers about 136,000 km² (about 57% of the land area). The zone is
characterized by one major rainy season, from May to October and a long, dry season
(November-April). The zone is suitable for the largest diversity of crop production activity.
Rice is by far the most important cash crop in the zone and is produced in the valley bottoms.
Millet, sorghum, yam, maize, groundnuts, vegetables and cotton are also widely produced.
Livestock production is also important in this zone, with more than 70% of the country’s
cattle, sheep and goats.
2.2
Socio-Economic Situation and Production
2.2.1 Agriculture directly employs 70 percent of the labour force, and accounts for more
than 55 percent of foreign exchange earnings. However, the sector performance has fallen
short of the targets of 5-6 percent growth per annum set in the Government’s Vision 2020.
Instead agriculture output increased by 3.9 percent in 1999, 2.1 percent in 2000, and showed
a recovery of 4% in 2001. Cocoa production declined by 1.0 percent during this recovery
period, compared with a growth of 6.2 percent in 2000. To a large extent this has been due to
the falling international cocoa prices. The major challenge for the Government is to
restructure the sector in such a way that there is less reliance on cocoa and to ensure that high
growth rates can be achieved and sustained over long periods. To reverse this trend, the GoG,
in line with the Accelerated Agricultural Growth and Development Strategy (AAGDS), has
focused on reforming the cocoa industry while promoting selected non-traditional agricultural
commodities for which Ghana has or can develop comparative advantage to produce for the
domestic market and for export into regional and international markets. Horticultural crops
were identified as such non-traditional commodities.
2.2.2 The sector (comprising Crops, Livestock, Forestry and Fisheries) contributes about
34% of GDP while Services account for 42% and Industry for 24%. Overall export revenues
were USD2,100 million and USD2,300 million in 2002 and 2003 respectively, with cocoa,
timber and gold as the major export commodities, together accounting for USD1,300 million
(64.7%) and USD 1,800 million (78.8%) for the same period, respectively. Cocoa alone
earned over 35% of the export revenues in 2003. Non-traditional exports (horticulture
products, processed fish, handicrafts, textiles, etc.) revenues were estimated at USD 490
million in 2003. The annual agriculture GDP growth averaged 3.8% in the period 1992–2002,
and rose to 6.1% in 2003 in spite of a 0.5% decline in the cocoa sub-sector. The 2004 cocoa
production record stood at 734,699 Mt for a foreign earning of USD 1,200 million. This is the
highest production record in the industry since 1965 (580,869 Mt), and also the highest
foreign revenue ever achieved by the cocoa sub-sector.
2.3
Land Tenure
2.3.1 Most of the agricultural land in Ghana is under communal ownership. Communal land
is controlled by lineage or clan-based land-owning groups and allocated to individuals or
households on a usufructuary basis. In most parts of the country, particularly in the northern
regions, women generally have difficulties in accessing such land except where there is a
male guarantor, or where there is group ownership of land.
4
2.3.2 The strong influence that traditional leadership in Ghana exercises over land
allocation and use does not always support safeguards for long-term investments, which are
frequently required to achieve the objective of modernising agriculture. The comprehensive
National Land Policy was introduced in 1999 to serve as a framework for amendments of
legislation and formulation of strategies for allocation, utilisation and administration of land.
The progress in formalising land ownership through issuing of title deeds has been gradual
and most rural land is still under customary law vested in local chiefs. Instead of pressing for
transfer of ownership into the hands of the land users under a national land law, new forms of
co-operation between the users and the land custodians are being sought, such as is being
done under the oil palm expansion project, one of the President’s Special Initiatives. In
general terms, women continue to be disproportionally constrained from accessing land,
especially for long term use.
2.3.3 In the absence of an agreed national framework for allocation and utilisation of land,
the Government has decided to move towards a more transparent system of first addressing
the issues of land demarcation and administration. The Land Administration Project, which is
financially supported by a number of donors, started in 2003 to reform land laws over a
fifteen-year period, and is part of this Government strategy. The first five-year phase will
address issues of linkages between land tenure and the rights to trees, wildlife and non-wood
forest products as well as the balance of the overall interests of the land users and the
custodians of the land. In the meantime, the traditional land tenure still prevails and does not
constrain the development of horticultural and cassava growers in coastal areas.
2.4
Poverty Status
2.4.1 About 39% (8 million) of the population in Ghana are classified as living in poverty
or extreme poverty. Two million people (10%) classified as living in poverty are unable to
meet their food and other needs, while the six million classified as living in extreme poverty
are unable to meet even their most basic food needs. Fifty-eight percent (58%) of those
identified as poor are in the agriculture sector, most of whom are food producers. The
prevalence of extreme poverty varies in different parts of the country, with the Northern and
Western regions recording above 70%, while the Accra area has less than 5%. The incidence
of poverty is more prevalent among subsistence farmers and female-headed households.
Women, especially in rural areas, have less access than men to education, land and credit.
Socio-cultural factors continue to play an important role in perpetuating such gender
inequities, as evidenced by the statistics in the Socio-economic indicators table on page vii.
2.4.2 Nonetheless, Ghana has experienced continued economic growth since 1992. The
incidence of poverty declined from 52% in 1991/92 to 39% in 2004. The proportion of the
population living in extreme poverty fell to approximately 25% during the same period. The
decline in overall poverty, however, has not been evenly distributed geographically, with
poverty reductions being concentrated and skewed in Accra and the rural forest areas. Export
farmers and wage employees in private employment enjoyed the greatest gains in their
standards of living while food farmers experienced the least gains. In its Poverty Reduction
Strategy (GPRS), which was endorsed by the African Development Bank and the Donors
community, the GoG aims to reduce the incidence of overall poverty to 32% in 2005 and to
reduce poverty among subsistence farmers from 59% in 2000 to 46% in 2005 and extreme
poverty from 27% in 2000 to 21% in 2005. These targets will be verified in the next poverty
survey.
5
2.4.3 The erratic rainfall pattern, coupled with the rudimentary technology used in most
production processes lead to fluctuations in food production from year to year, which causes
food insecurity. In almost all parts of the country, farming systems are based on mixed
cropping, small-scale operations. Ghana’s agricultural production is predominantly rain-fed
and is estimated to operate at 20% of its potential; thus it has failed to make a significant
impact on poverty reduction and food security. These operations are characterized by small
size land holdings of less than 2ha, accounting for 90% of the total cultivated land; holdings
above 20ha represent about 10%. Small-scale farming is almost exclusively managed by
women, who produce about 80% of the total agricultural production, using mainly labourintensive technology. They also constitute 59% of the country’s poor.
2.4.4 Despite Ghana’s abundant water resources, with the Volta river system, draining
about 70 percent of the total land area, only about 11,000 ha (0.2 percent of cultivated lands
in the country) out of a potential 346,000 ha of irrigable land area are irrigated and used
mainly to grow rice and vegetables. Efforts to promote irrigation are evidenced by the
Government support to development of new agricultural lands and the rehabilitation of
existing irrigated schemes. Given the erratic nature of rainfall, contrasting trends are observed
in the cultivated land areas, volumes and yields of agricultural production for the principal
export and food crops. During the period 1990-2000, Cereals including maize, millet, rice
and sorghum were grown over an estimated total land area of 0.9 million ha (1990) rising to
1.31 million ha (2000). The total production for the same period rose from 0.8 million metric
tonnes (Mt) to 1.7 million Mt, with average yields also rising from 0.9 Mt/ha to 1.3 Mt/ha.
(The trends for the export crops are given in Section 3 on the Export Sub-sector.) Plantain
banana and root crops such as yams and cassava are important food and cash crops. In 2002,
production of these crops was estimated at 2.3 million Mt, 3.9 million Mt and 9.7 million Mt,
respectively.
2.4.5 In 2003 agricultural production statistics were: 1) Cereals: maize (1.3million Mt),
sorghum (340,000 Mt), millet (176,000 Mt) and rice (239,000 Mt); 2) Starchy crops: cassava
(10million Mt), yam (4million Mt), cocoyam (2million Mt) and plantain (2.4million Mt); and
3) Industrial & tree crops: cocoa (340,000 Mt), tobacco, cotton, oil palm, rubber and shea
nuts. Recently, the country has engaged in the development of the non-traditional export crop
sector including: fruits (pineapple, papaya and mango), vegetables (chillies, eggplant, okra
and Asian vegetables) and root crops (yam and sweet potatoes).
2.4.6 Livestock and fisheries contribute about 7% and 5% respectively, to agricultural
GDP. Livestock is mainly concentrated in the Guinea and Sudan Savannah zones. The region
accounts for about 75% of the cattle population in Ghana, with the dry coastal savannah in
the south accounting for about 15%. The remaining transitional and humid forest zones are
sparsely populated with cattle because of the prevalence of tsetse flies, vector of the
trypanosomiasis. Small ruminants and poultry are more evenly distributed throughout the
country, whereas pigs are concentrated in the forest belt and around urban areas. Livestock
and fisheries play an important role in the agricultural sub-sector, providing some 30% and
60%, respectively, of the entire animal protein intake. Livestock is also a major source of
draught power for crop production. Women draw income-generated benefit from livestock,
since they are able to own pigs and small ruminants. The 2003 Statistics indicate that there
are some 26 million poultry, 3.7 million goats, 3 million sheep, 1.36 million cattle and
300,000 pigs. Total fish production has been declining, from: 468,000, 454,000 and 378,000
Mt in 2000, 2001 and 2003, respectively.
6
2.4.7 The Forestry sector: The forestry sector contributes 3.6% to the national GDP (2002)
and accounts for 11% of national export earnings. Ghana's forest cover has been reduced
from 8.2 million hectares to the current 1.7 million hectares, within the last fifteen years. The
country has 32,000 km² of forest reserves, of which, 400,000ha are classified as degraded;
350,000 ha comprising primarily hill and swamp sanctuaries and biodiversity reserves
require urgent permanent protection. The remaining 900,000 ha are suitable for timber
production, which is part of the country’s traditional export commodities. The government’s
on-going strategy to address the challenges in natural resource management is largely
embodied in conservation and sustainable development of the nation’s forest and wildlife
resources for the maintenance of environmental quality and the perpetual flow of optimum
benefits to all segments of society.
2.5
Gender Issues
2.5.1 Women represent 50% of the labour force, in Ghana. Increasingly women are
involved in commercial farming activities, but the majority are still engaged in producing
food crops. Labour is gender disaggregated at the household level. Women and children are
the predominant labour force especially in the off-planting season. Almost exclusively,
women are responsible for family or home-based economic activities like food production,
processing and marketing of agricultural products.
2.5.2 Gender-specific roles exist in farming operations. Men normally carry out land
preparation, ridging, re-ridging, and spraying, while the women plant, weed, water, birdwatch, harvest and carry out post-harvest handling and marketing. For horticultural
production, women are predominantly engaged in weeding, spraying, picking, sorting,
grading and packing. Women disproportionally face difficulties to own land, as well as to
access credit since they often lack collateral for security. Trading is a primary occupation for
women, and is practised as an off-season activity to supplement farm incomes
2.5.3 To address the gender issue, the government has demonstrated its commitment to
improving the situation of women and children, by signing numerous international
conventions in this area, among others. A strategy has also been developed to work towards
getting 40 percent of decision-makers at all levels to be women. The GoG has also invested
in development interventions which are predominantly for women, such as small-scale rural
enterprises.
2.6
HIV/AIDS and Malaria
HIV/AIDS: The national HIV incidence is around 4%, and varies from region to
region. The number of people living with HIV in the country is estimated at 420,000 and
about 200 people are infected daily. Women constitute 63 percent of the cases reported. The
high migrant population and resistance to the adoption of safe sex measures are a major risk
to an increase in the prevalence rate over time. The National AIDS Control Programme has
limited capacity to handle the required multi-sectoral approach. Training activities on AIDS
are also limited, with most activities restricted to the health services. Community responses to
embark on HIV/AIDS prevention activities are insufficient due to limited resources. There is
need to co-ordinate community-based activities and ongoing research efforts. To address
these constraints, the GoG has adopted a strategy of integrating routine HIV/AIDS activities
into regional and district plans and budgets, and building capacity of key institutions in order
to further promote AIDS control activities in other sectors. AIDS affects human resource
7
productivity and hence it is of direct concern to the agricultural sector and to the success of
this project. Nevertheless, the incidence of malaria remains the highest single source of
morbidity and mortality in Ghana. The Government is making concerted efforts to spearhead
prevention measures such as the use of bed-nets.
2.7
Agricultural and Rural Development Policy Framework
2.7.1 Ghana has demonstrated its commitment to implement significant policy reforms
aimed at improving the country’s prospects for sustained economic growth. In 2000, the GoG
prepared the Accelerated Agricultural Growth and Development Strategy (AAGDS), with the
aim of raising agricultural growth to 6% per annum, by improving: (i) market access for
selected commodities, (ii) technology access, (iii) rural finance, (iv) infrastructure, and (v) by
building capacity of institutions and human resources. The AAGDS is part of the country’s
Poverty Reduction Strategy (GPRS), a comprehensive framework for poverty reduction and
creation of wealth through accelerated growth. AAGDS is operationalized through the
Agriculture Strategic Plan. This is a three-year rolling plan currently for the period 2004–
2006. The current GPRS for the period 2003-2005 has five pillars: (i) agricultural
modernisation and rural development to increase production and employment; (ii)
infrastructure development; (iii) enhanced social services; (iv) good governance; and (v)
private sector development.
2.7.2 The main policy document for the agriculture sector is the Food and Agriculture
Sector Development Policy (FASDEP), which was adopted in 2002. In the FASDEP
document, the GoG focused on increasing production through commodity-oriented
initiatives. The principal goal is to establish a modern, robust and diversified agriculture
sector, in line with the first GPRS pillar and the Millennium Development Goals (MDGs).
2.7.3 MOFA, has begun to operationalize the GPRS by prioritizing activities which are: (a)
service-oriented: farm technology improvements, including improved planting materials and
low-cost pest management; facilitating improved storage and market access; and facilitating
increased processing capacity for small-scale farmers; (b) commodity-oriented: support to
nucleus–out-grower schemes; and (c) area-based: small irrigation schemes with appropriate
technology. In addition, the MOFA extension policy aims to incorporate information on
prevention of HIV/AIDS and other social considerations into its advisory messages. MOFA
acknowledges that these actions only represent a first step towards an effective pro-poor substrategy and need to be followed soon by further measures to have the desired impact.
2.8
Interventions of Major Donors in the Sector
2.8.1 In 2004, the Government of Ghana has established a Donor Coordination Desk in the
Ministry of Food and Agriculture, to ensure synergy of efforts among development partners
involved in the rural and agriculture sector, and avoid duplication of scarce resources. The
GoG has prepared a National-Medium-Term Investment Programme (NMTIP) and a
Portfolio of Bankable Investment Project Profiles. The NMTIP has involved the on-going and
future programmes of development partners, defined in line with the country’s PRSP. A
number of Donors have pledged or provided financial support towards the modernization of
agriculture, one of the priorities in the PRSP. The Bank Group, the World Bank, IFAD,
CIDA, USAID, DANIDA, European Union, Agence Française de Développement (AFD),
JICA, DFID, FAO and GTZ, have provided support towards the many programmes contained
in both the AAGDS and the FASDEP. Financial support from the various donors is
coordinated under the AgSSIP framework.
8
2.8.2 Major projects and programs financed by donor agencies are as follows: The World
Bank financed Horticultural Export Industry Initiative (HEII) and the USAID-financed Trade
and Investment Program for a Competitive Export Economy (TIPCEE), both of which are
ongoing and will complement the activities of this project. The Agricultural Sub-Sector
Investment Program (AgSSIP), jointly supported by World Bank, IFAD, EU, JICA,
DANIDA and CIDA, with a budget of USD123 million. The African Development Bank
Group is particularly active in the sector, with the on-going Livestock Development Project,
the Food Crops Development Project, the Cashew Development Project, the Small Scale
Irrigation Project and the Community Forestry Development Project, the Special Programme
for Food Security (SPFS) and the Inland Valleys Rice Development Project. The Bank is also
engaged in co-financing partnership with IFAD for the Rural Enterprise Project. Other donorfunded projects are the Village Infrastructure Programme, jointly financed by IDA, IFAD,
KfW; the Root and Tuber Improvement Programme (RTIP), the Land Administration
Programme and the Land Conservation and Smallholder Rehabilitation Project, all financed
by IFAD.
2.8.3 Lessons learnt: Past agricultural projects depended heavily on public intervention,
resulting in limited ownership of the programs by the beneficiaries. Increasingly, projects are
being designed so that farmers and communities participate fully in the planning and
management process, which has resulted in beneficiary ownership and sustainability. Delays
in declaration of project effectiveness, inadequate procurement, slow disbursement and
inadequate counterpart funding, have affected the implementation of the some projects.
Finally, the design of some of the projects is such that it is difficult to utilize the all the funds
allocated on time. As a result, donors’ funds may not be fully utilized by the end of project,
hence necessitating requests for extension of project implementation.
3.
THE EXPORT SUB-SECTOR
3.1
Traditional Exports
3.1.1 Ghana’s traditional major export commodities are gold, cocoa and timber. Gold and
cocoa contribute more than 80% of foreign exchange. Cash crops, comprising primarily
cocoa timber and others (coconuts, other palm products, shea-nuts and coffee) provide about
two-thirds of export revenues, estimated at USD 3.01 billion in 2004. The major export
partners of Ghana are: Netherlands (11%), United Kingdom (10.6%), France (7.6%),
Germany (6.2%), Japan (5.2%), Italy (4.6%), Nigeria (4.4%) and the United States of
America (4.2%). The combination of unstable cocoa production, due to unfavourable weather
conditions and the recent declines in world prices for cocoa and gold has reduced export
earnings. Cocoa beans export volumes stood at 280,000Mt in 1999; 360,300Mt in 2000;
335,500Mt in 2001 and 310,700Mt in 2002; 340,000 Mt in 2003; and in 2004, a record of
734,699 Mt for a foreign earning of USD 1.2 billion. Cocoa alone earned over 35% of the
export revenues in 2003. Britain continues to be the principal market for Ghanaian cocoa
beans, absorbing approximately 50 percent of all cocoa beans exported.
3.1.2 With the decline in cocoa and gold world prices, the Government realized the need for
diversifying its sources of foreign earnings into the production and export of horticultural
products, which in turn will improve the livelihood of rural populations. By means of
incentives, the government has engaged in promoting non-traditional exports (NTE) in the
agriculture and fishing sectors since 1983. The project has been very successful in the
9
agricultural sector, with the rapid development of export activities for non-traditional
agricultural products including fruits such as pineapples, mangoes, papaya, but also cashews
and vegetables.
3.2
Non-Traditional Exports
3.2.1 In 1992 the Ghana Export Promotion Council announced a plan to raise Nontraditional Exports (NTE) to USD335 million by 1997 through increased market research,
trade missions, trade fairs and exhibitions, and training. The GoG provided a wide range of
incentives, which generated considerable response so that by 1998, more than 700 exporters
were exporting 123 products. The NTE comprise all merchandise exports except for cocoa
beans, logs and lumber and mining products. They are grouped as follows: (i) Agricultural
products (horticultural produces, fish and seafood and others); (ii) Processed and semiprocessed goods; and (iii) handicrafts.
3.2.2 In 2004, the overall NTE accounted for 8.8% of GDP. As at December 2004, NTE
raised more than US$640 million. The European market has been the main market destination
of Ghanaian NTEs in 2004, absorbing about 82.6% of the total agricultural exports. In
Europe, the United Kingdom is the primary destination, accounting for about 42.1% of total
export earnings, followed by Belgium, France, Germany and Italy. Other destinations are
ECOWAS countries with about 17%.
3.2.3 Horticultural exports - Agricultural NTEs have the potential for increased foreign
earnings, rural employment, incomes and growth, thus reducing poverty. During the period
2000-2004, horticultural products, led by pineapple, have been the biggest contributor to
Agricultural NTEs, ranging from 36 to 39%, and accounts for about 36% of the total value of
export earnings. The next major contributors are fresh papayas, mangoes and Asian
vegetables (tinda, okra, chillies and pepper). Volumes and export earnings have significantly
increased in the period of 2000-2003, as indicated in the table below.
Table 3.1: Volume and Value of Non-Traditional Exports (NTEs)
(2000–2003)
NTEs
Pineapple
Canned Pineapple
Papaya
Vegetables
Total
2000
26,173
1,486
1,530
2,425
31,614
VOLUME (Mt)
VALUES (million USD)
2001
2002
2003
2000 2001 2002 2003
19,703
46,391
49,557 11.50
8.00 15.50 60.00
1,416
1,400
na
6.00
5.70
5.50
na
na
1,438
1,714
1.20
Na
1.60
2.20
1,894
6,005
7,085
1.20
0.80
7.30
9.50
23,013 55,234
58,356 19.90 14.50 29.90 71.70
3.2.4 The 2004 preliminary statistics indicate an overall volume estimated at 130,000
tonnes valued at USD60.5 million. World Export markets for the principal horticultural crops
are indicated below.
10
Table 3.2: Market Indicators for NTEs Produced by Ghana
Market Indicators
Pineapple
Papaya
Mangoes
Aubergines
World Volume (Mt)
Value (USD million)
Major Exporters
1,765,361
987.00
Costa
Rica
Ghana’s % market share
Major. export destinations
for Ghana produce
7%
EU
ECOWAS
404,338
163.50
Mexico
Brazil
Malaysia
2%
EU
ECOWAS
1,054,668
648.90
Mexico
India Brazil
Philippines
Negligible
EU
ECOWAS
474,000
231.80
Spain
Netherlands
Mexico
Less than 1%
EU ECOWAS
Chillies and
Peppers
4,000,000
2.30
Netherlands
Spain
Mexico
Negligible
EU
ECOWAS
3.2.5 Pineapples - The world export market is dominated by Costa Rica (20%) followed by
Cote d’Ivoire (17%). Ghana market share is estimated at 7%. Export earning was valued at
USD 22 million in 2004, with USD 19 million, from the EU market. World pineapple
consumption grows annually by 10% on average and this trend is expected to continue.
However, Ghana could lose part of its market share due to the change of consumers’ taste
from the traditionally consumed ’Smooth Cayenne’, produced by African countries, to the
new MD2 cultivar, from Costa Rica. The difference in taste characteristics is highlighted in
the next paragraph. Papayas - The world export market is led by Mexico (29%), followed by
Brazil (18%), Malaysia (16%). Ghana is the 9th exporter, with a share of 2%. Mangoes - The
market is led by Mexico (20%), followed by India (13%), Brazil (12%), and the Philippines
(7%). Ghana occupied the 42nd position with a negligible share. In Ghana, mango will be an
important NTE crop in the future, principally for export to EU countries. Vegetables. (1)
Aubergines- The world largest supplier is Spain (30%) followed by the Netherlands (26%),
Mexico (17%) and Jordan (4%). Ghana is in the 25th position with a share well below 1%. (2)
Chillies and peppers- The market is dominated by Netherlands (35%) followed by Spain
(25%) and Mexico (17%). Ghana occupies the 40th position with a minimal share of the total
market.
3.2.6 MD2 was developed by Del Monte scientists in Costa Rica, for a target market
looking for extra sweet fruit, uniform in size and ripeness. In addition to being sweeter than
regular pineapples, MD2 has a smooth, distinctive bright yellow exterior, less acidity and a
more complex taste, with a distinct coconut flavour. It contains four times the vitamin C of
regular varieties. For these characteristics, MD2 is also known as “designer pineapple”. It
also offers long shelf-life at room temperature. The agronomic practices of the MD2
pineapple variety are similar to those already in practice in Ghana for the Smooth Cayenne
variety. As a tropical crop, it grows in areas of average rainfall between 1,000 - 1,800 mm per
annum, as is the case in Central, Eastern and Volta regions in Ghana, where the majority of
pineapple plantations are rain-fed. The crop thrives well in a temperature range of 25°C to
32°C and a wide range of soil types, but well drained sandy loam soils with ph of 4.5–6 are
preferred. Pineapple plants require about 14 months to mature. The agronomic practices
should not be an insurmountable constraint to widespread introduction of MD2, since there
will be a strong R&D component to be run by Research Institutions which will address the
issue.
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International Trade Constraints for Horticultural Produce
3.2.7 The Cold Chain: Horticultural crops being highly perishable, go through a rapid
natural process of degradation immediately after harvesting. With exception of two or three
exporting companies, the entire horticultural business in Ghana is being performed without
the use of controlled temperature devices during packing, transport and prior to shipment,
limiting the shelf life of the product. There is thus need to establish a cold chain. A cold chain
implies a continuous control of temperature to which the produce is subjected from the time it
is harvested up to the time it is sold to retailers in the importing country. This requires
investments in post-harvest infrastructure starting from temperature-controlled vehicles to
carry the produce from the fields to temperature-controlled facilities for cleaning, grading and
packaging. These are usually referred to as pack-houses. From the pack-houses, the produce
should be carried again in temperature-controlled vehicles to temperature-controlled room
facilities at the exit ports. Through establishment of a cold chain, product quality is
maintained, losses minimized, and shelf-life of the products improved.
3.2.8 Transportation: In Ghana, transportation is performed from packing-sheds to
seaport/airport in insulated trucks without temperature-control equipment. On arrival to the
loading place, cargo generally remains in the truck until the time of final loading. If major
delays are announced, cargo may be offloaded from the truck and stored for waiting in the
terminal sheds. At both port and airport facilities, sheds are at ambient temperature and
without ventilation.
3.2.9 In the early 1990s, when exports of horticultural products started, air-freight was the
only means of transportation into Europe. Air freight is now left to papaya and vegetables
which have a much shorter shelf life. Currently, most of the exports are transported by sea.
Sea transportation of horticultural products is performed either in refrigerated holds (80%) or
reefer containers (20%), the second one being more expensive because they are refrigerated
containers. Despite this improvement, sea-freight rates from Ghana are the highest in the
West African region. At the present small volume of exports, it is difficult to attract chartered
freight services at less than 40% of the Cost and Freight (C&F). To attract shippers at lower
rates, Ghana needs a minimum of 4,000 pallets. During transportation in Ghana and by sea or
air, goods are not insured because there is no insurance facility.
3.2.10 Port and Freight Charges: The GoG is in the process of liberalization and
privatization of port handling and management. This process has yet to be finalized. In the
meantime, the Ghana Ports and Harbors Authority (GPHA) has entered into a special
agreement with horticultural crops’ exporters, under which they have been availed a 66%
rebate in stevedores and shed handling charges. While this will contribute to facilitating the
movement of produce, these arrangements are short term and are not enough to meet the
standards required for the target market. The HEII project financed by the World Bank will
upgrade facilities at the airport and at the Tema port, and is also investing in two pack houses.
3.2.11 Freight costs amount to about 40% of the total C&F value of Ghanaian horticultural
products. These charges are high and are due to low shipping volumes as well as to
inefficient and expensive port services (pilotage, towage, mooring, port and light dues)
charged by GPHA to the shipping companies. Compared to other West African ports, such as
Abidjan, show that their average freight rate to European ports range between USD70 to 80
less than the rate from Tema, (USD110 against USD182 per 780 kg pallet). The limited
shipping volumes have attracted limited shipping services, especially in the sea transportation
sector, which in turn limits diversification of markets for horticultural products.
12
3.2.12 At destination: Most exporters retain sales agents at destination markets. Sales agents
recall and sell the produce to the supermarkets and wholesalers. After the transaction is
completed, the agents prepare a statement with indication of: a) final selling price, b)
discounts due to poor quality or commercial problems, c) detailed expenses related to quality
inspection, trucking, labeling, storing, and finally, d) the agent’s commission that lies
between 5% and 7% of the net selling price. After this, the international freight value is paid
by the agent and deducted. The balance is the final income received by the Ghanaian
exporter. The absence of exporter representation at destination markets, prevents the
possibility of counter-checking discounts claimed because of poor quality.
3.2.13 Export performance and expansion: The long historical presence of Ghanaian
products in the international markets is widely known and its quality accepted through its
traditional exports of cacao, gold and timber. The strong export growth over 100% of the
horticultural sector during the last 5 years has given Ghanaian horticultural products a
presence in different consuming markets. Ghana has been able to produce a premium product
that has found rapid acceptance in the European market. In addition, these products can be
supplied during the European off-season. Despite quality problems pertaining to any incipient
industry, the rapid success in capturing an important sector of the market indicates the high
potential for market expansion that Ghanaian horticultural products have.
3.2.14 Trade Barriers: Improving the position of Ghanaian horticultural products in the
world’s principal markets is a major challenge. There are many barriers to overcome
including tariff and non-tariff barriers. Most of these barriers were created at the end of the
Uruguay Round of the General Agreement on Tariffs and Trade (GATT) which prompted
developed countries to adopt new methods for assisting their producers, including refitting
subsidy limits and granting access to those markets within the domain of the World Trade
Organization (WTO). Horticultural products are the primary target of phyto-sanitary
protectionism. Other limitations are: limiting imports during local harvests, imposition of
minimum prices for imports, and obligation for pre-licensing of importers. Ghana benefits
under the privileged trading arrangements between regions having specific trade preferences
such as those granted by the EU for ACP countries under the Lomé Convention, lately
through the new Cotonou agreement and the new regime known as “Everything but Arms”
that provides zero-duty access for all products except arms from the least-developed
countries. Also, the USA African Growth and Opportunity Act offers benefits to Ghana’s
exports, through reduced import tariffs.
3.2.15 Brand Development: Brands have proved to be very effective marketing tools for
horticultural products. Ghana has yet to develop one. There are plans to sign an agreement
between GEPC and the producers/exports associations to establish and promote a Ghanaian
Fruit Seal to guarantee standards and the quality of products, and widen the exports of the
horticultural sector. The industry has no strategy to organize an international campaign in
countries already importing Ghanaian products. The aim should be not only to increase
market share, but also to transfer the focus of revenue from international importers and
wholesalers to the distribution chains, for wider profit margins. Efforts in this area have been
limited to activities such as developing food fairs.
3.2.16 Finance: Access to long-term capital and trade finance services is available at
prohibitive interest rates (28%-34%) through regular financial institutions. The Government
has channeled funds through the Export Development Investment Fund (EDIF) at more
13
affordable rates of interest (15%). These funds are underused. Farmers and exporters argue
that procedures are cumbersome and collateral requirements excessive. There is need to
review the scheme in order to increase the availability of long-term finance for export
development. Finance is one of the key instruments to invigorate exports. Horticultural
exporters are paid long after shipment is performed or (better) after consignment has been
paid by final buyer without any partial or total advanced payment in cash or through letters of
credit that could be used as pre-financing tools. EDIF is addressing this issue, including using
re-financing and credit guarantees through designated financial institutions and other
institutions involved in the export trade sector. A further problem is that Ghana has no Export
Insurance, which has adverse effects on export-related businesses. Effective trade financing
requires credit resources for export transactions, as well as insurance to mitigate and
minimize the risks that are inherent in the execution of export transactions, especially the risk
of non-payments. The Export Guarantee and Insurance Company is addressing this constraint
with funding from EDIF.
3.2.17 Out-growers scheme - Horticultural production in Ghana is organized based on the
Pineapple production model applied by one of the major exporters. Members of five smallscale pineapple farmers’ cooperatives, together with two former exporters own an export
company, which processes and exports their produce. This model uses the ’Cooperative
Marketing Strategy and Market Based Development Approach’, which is a cooperative
marketing arrangement between exporters and small-scale producers also known as outgrowers. Support to growers ranges from finance, technology, entrepreneurial development
and marketing. Other out-growers cooperatives in Ghana that are not affiliated could sell
their produce, on demand, to Farmapine.
3.2.18 Economically, the model has shown a lot of promise for small-scale pineapple
farmers and other producers in Ghana. In this arrangement, risks are considerably lower for
small-scale farmers and profits are rather high. On average, out-grower farmers earn about
USD 1,000 per acre of pineapple cultivated (about USD 2,000 per hectare). Each farmer
cultivates about five acres on average (about 2 hectares) and, thus, can earn in excess of USD
4,000 per growing season. Viewed against the background that per capita Gross National
Income in Ghana is USD290, the out-growers can be seen to be doing very well. The outgrowers have indicated that they face fewer constraints than non-cooperative members,
especially when capital is needed for the farming operations. More and more horticultural
exporters in Ghana are organized using this model. The main constraint to successfully
implementing the model is the required financing and organization of the cooperatives. In the
case of Farmapine, the cooperatives had been working with Technoserve, an NGO, for years
and had realized some of the benefits of working together as a cooperative.
3.3
Cassava
3.3.1 Cassava is produced by more than 90% of Ghanaian farmers, either as a main crop or
in combination with others. National annual cassava production was estimated at about 10
million metric tonnes in 2002, and Cassava accounts for about 22% of the country’s
agricultural GDP. Based on the socio-economic significance of Cassava, the Government
launched the "President's Special Initiative (PSI) on Agribusiness", an Integrated Action
Program for Cassava Starch Production and Processing for Export in August 2001. Cassava
will be used to produce industrial starch, which is used in the paper, textile, food,
pharmaceutical, oil drilling and petro-chemical industries. The two key by-products, pulp and
juice, are used as cattle fodder and fertiliser respectively. Therefore, there is a great potential
14
to transform cassava into a major economic growth pole. Current the US and EU markets for
starch are estimated at 24.3 and 7.4 million tonnes, respectively. Market information
indicated that other markets have potential demand for cassava starch, including ECOWAS
countries, specifically Nigeria, as well as North and Southern African countries.
3.3.2 Ayensu Starch Company (ASCo), is the first of 10 planned starch plants, established
at Bawjiase, in Awutu-Effutu-Senya District of Central region. It became operational in June
2003, with a capacity of 3-tonnes per hour modern cassava starch processing. The total
investment cost of about USD 7 million was financed through long-term loans from
Agricultural Development Bank (AgDB), the National Investment Bank (NIB), Ghana
Commercial Bank and OIKO-Credit (a Dutch NGO) and the Export Development and
Investment Fund (EDIF). The company was established as a Corporate Village Enterprise
(COVE), a farmer-ownership scheme, whereby smallholder out-grower cassava farmers in
the five Districts of the project’s operational areas will become shareholders and participate
in the enterprise to be managed by professionals.
3.3.3 In 2002, the management of ASCo contracted OIC International, an NGO, to organize
the participating farmers into a farmer association, to be out-growers and owners of the
company. This was accomplished successfully and the Ayensu Cassava Farmers Association
(ACFA) was formed in 2003, with more than 5,000 members. The Association has a threetier organizational structure, with local branches, zones, and districts. Each tier has a
council/management committee in place. A 13-member executive council (including three
women) has been formed to be the overall highest decision makers of the association.
3.3.4 ACFA supplied ASCo with raw cassava in 2004 and the company produced its first
starch product the same year. Presently the Company is short of cassava and therefore not
operational until the next harvest. However, the Association is receiving capacity building
support, in terms of improved planting materials, from the Roots and Tubers Improvement
Project (IFAD), and an internal extension service provided by the Company. ACFA also
provided technical support to its members in terms of mechanized land preparation.
Nonetheless, the Association currently lacks the capacity and the necessary resources to serve
its members effectively, and to support the Ayensu Starch Company in its business operation.
There is now an urgent need for further capacity building of the Association and training of
the 13-member executive council, the members of the district and zonal councils, as well as
the local branch executive committee and other key members of the Association, to enable
them to operate along sound business lines and to create more wealth and benefits for its
members.
3.4
Institutional Framework
3.4.1 The Ministry of Food and Agriculture (MOFA): MOFA is charged with the
development and growth of agriculture in the country with the exception of the Cocoa-Coffee
and Forestry sector. Its primary roles are the formulation of appropriate agricultural policies,
planning and co-ordination, monitoring and evaluation within the overall national economic
development. MOFA seeks to achieve the following objectives: (i) Improve agriculture
productivity, incomes and employment opportunities; (ii) Contribute effectively to balance of
payments; (iii) Establish effective agriculture–industry linkages; and (iv) Promote balanced
regional development.
15
3.4.2 In accordance with GoG’s policy of decentralization, MOFA's current structure
comprises of: (i) A National Secretariat made up of four line directorates (Finance and
Administration Policy Planning, Monitoring and Evaluation Directorate (PPMED); Human
Resource Development and Management; and Statistics, Research, Information and Public
Relations); (ii) Technical Directorates (Crop Services, Agriculture Extension Services, Plant
Protection and Regulatory Services, Agricultural Engineering Services, Animal Production,
Veterinary Services, Fisheries and Women in Food and Agricultural Development); (iii)
Regional and District Directorates (Regional Agricultural Development Units and District
Agricultural Development Units); and (iv) Sub-vented Organizations. The Ministry is
responsible for four Sub-vented Organizations (Grains and Legumes Development Board,
Ghana Irrigation Development Authority, Veterinary Council, and Fisheries Commission).
The Policy Planning Monitoring and Evaluation Directorate (PPMED) is charged with coordinating MOFA activities and collecting information for policy planning and analysis, as
well as collection of data on crop and livestock production, inputs, prices and marketing.
3.4.3 Ghana is divided into 10 Administrative Regions and 110 Districts. MOFA is
decentralised at national, regional and district levels. Within this framework, 10 Regional
Agricultural Development Units (RADUs) and 110 District Agricultural Development Units
(DADUs) have been established. At regional level, the Regional Director is the most senior
officer of MOFA, and is assisted by Regional Development Officers, who are technical staff.
All the other professional staff are Subject Matter Specialists (SMS) grouped in various SMS
centres in the region. Each region has a Training Co-ordinating Unit, which does not maintain
a team of trainers but rather co-ordinates services to train Agriculture Extension Agents
(AEAs) or farmer groups. At district level, all technical staff has been designated as ’all
purpose’ AEAs carrying out field-level missions for the MOFA establishment. The District
Director of Agriculture (DDA) heads the MOFA district office. The District Assembly forms
committees of which Agriculture is one of the most important.
3.4.4 Crops Research Institute (CRI) - CRI has a broad research mandate covering all
food and industrial crops except cocoa, coffee, cola, shea nut, coconut, oil palm, sorghum and
millet, which are the mandated crops of other research institutions. CRI is governed by a
management board that meets biennially, to discuss the Institute's research and administrative
activities, as well as financial transactions. The day-to-day administration of the Institute is
headed by a Director, assisted by a Deputy Director and heads of the Institute’s
administrative divisions. The administrative and research divisions are: (i) Horticulture (Vegetables and fruit crops including plantain and bananas), (ii) Roots and Tubers, (iii)
Grains, (iv) Crop Protection, (v) Resource and Crop Management, (vi) Post Harvest, (vii)
Technical Services, (viii) Administration, (ix) Accounts, and (x) Business Development Unitresponsible for commercial activities.
3.4.5 CRI has a multidisciplinary team of research scientists including: Plant breeders,
Agronomists, Horticulturist, Entomologists, Plant pathologists, Virologist, Nematologists,
Weed scientists, Agricultural economists and Rural sociologists among others. The staff of
the CRI comprised 83 research graduate staff (senior members), 100 technical officers and 40
technical assistants. In addition there are 700 non-research junior staff in various supporting
services including unskilled labour. The Institute has adequately equipped offices and
laboratories, These include Pathology, Tissue Culture, Biochemistry and Weed Science
laboratories. It also has field stations in the various ecological zones of the country where
research findings are tested before they are transferred to farmers. These are: Aiyinase (Rain
Forest), Akumadan and Assin Foso (Semi-deciduous Forest), Ejura (Forest Savanna
Transition), Pokuase and Kpeve (Coastal Savanna).
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3.4.6 With various donor support, CRI has trained about 70 of its staff at post-graduate
(MSc/MPhil and PhD) level. Some technical support staff have also been trained. The
Institute has expanded its Tissue Culture Laboratory to increase its capacity from 5,500 to
40,000 cultures. A new training centre has been built at the headquarters to facilitate the
training programmes offered by the Training and Communication Unit to agricultural
workers and farmers. It is equipped with interpretation facilities and other equipment and
furniture. The Information system is functional.
3.4.7 The Horticulture Division of the Crops Research Institute (CRI), under the Council
for Scientific and Industrial Research (CSIR) is headquartered in the city of Kumasi. The
Division is responsible for the development of new varieties and appropriate technologies for
farmers to increase vegetable and fruit crop production in Ghana. The major research
disciplines are: breeding, genetics, propagation (certified seed, disease-free planting
material), culture, physiology, nutrition, crop protection (IPM), post-harvest management.
The Horticultural Division has 22 senior staff with MSc and PhD degrees in different fields,
and has accumulated significant research results that could be made available to the project
beneficiaries.
3.4.8 Food and Drugs Board (FDB) - Established in 1992 under supervision of Ministry
of Health, FDB controls the manufacture, importation, exportation, distribution, use and
advertisement of food, drugs, cosmetics, chemical substances and medical devices. The
institution is self-financed through revenues generated by service fees, in addition to
Government subvention and donor grants. The FDB has 118 highly qualified technical
personnel capable of performing the assigned tasks but with limited physical space in which
to work.
3.4.9 Ghana Standards Board (GSB) – Established in 1965, as the Industrial Standards
Institute, and now, as an independent corporate body since 1973, GSB’s mandate is to set
standards, and ensure that goods and services conform to the standards and are of acceptable
quality both for local consumption and export. GSB issues Export Certificates to assure
importers that the Ghanaian products meet the required health, safety and sanitary standards.
GSB is today equipped with a pesticide residue detection laboratory. GSB is financed by
GoG and by own-generated revenues from service fees. GSB has developed 8 standards for
the main horticultural products and is in the process of completing the corresponding 8
inspection manuals for market access that needs to be accelerated. The GSB laboratory is
being upgraded to ISO 17025 norms with the support of World Bank financing.
3.4.10 Export Development and Investment Fund (EDIF) – Established in 2001, the
mandate is to provide funds on concessionary terms to exporters to finance export-costs.
EDIF obtains its resources from various sources: (1) 10% net proceeds realized from
divesture of state enterprises; (2) 0.5% of CIF value of commercial imports excluding
petroleum products; (3) grants from Government and other sources; (4) recovery of loans and
interests payment on loans; and (5) other credit facilities that the Board of Directors can
obtain with government guarantees. It operates through two main facilities: a) The Export
Development and Promotion Account (EDPA) only providing loans to institutions,
organizations and trade associations both in public and private sectors, and b) The Credit
Facility (CF) for the provision of loans at 15% interest rate through Designated Finance
Institutions (DFI) to producers and exporters. Loan applications are presented through the
DFIs and not directly to the CF. DFIs apply stringent conditions and take long to process
credit applications. These two factors have led to significantly low utilization of credit
resource. The GoG is in the process of reviewing the scheme, for more efficient delivery of
credit.
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3.4.11 Ghana Export Promotion Council (GEPC) - Created in 1969, under the Ministry of
Trade, GEPC, in collaboration with line ministries, is mandated to assist exporters to identify
products, which have potential for export. The institution provides strategic market
information, sponsorship, equity participation and sourcing of inputs. The Council also
facilitates foreign trade and organizes participation in trade fairs, provides technical
assistance, collect statistics and participates in policy formulation. GEPC currently has
registered over 3,000 exporters organized into 15 Product Associations. The Council receives
75% of its financing from GoG and the other 25% from donors. GEPC also runs the Ghana
Export School from which 2500 students have graduated to date. GEPC has long experience
as a facilitator of business but there is need for further coordination of activities with other
stakeholders.
3.4.12 Federation of Associations of Ghanaian Exporters (FAGE) -FAGE started
operations in 1992, and today has a membership of 16 producers/exporters Associations and
more than 30 Companies. FAGE advocates improving and better organizing the export
business of NTEs. FAGE also plays advisory role for policy and regulations designed by the
Government. At present, FAGE is establishing a market information system with financial
support from USAID, and publishes prices on the EU market, on a weekly basis. It has
significantly contributed to the success of horticultural industry. The financing mechanism of
the Association is through member fees, contribute no more than 10% of the total budget
requirement, with the balance covered by donor contributions.
3.4.13 Sea-freight Pineapples Exporters of Ghana (SPEG) - SPEG was established in
1995, by five pineapples exporting companies, which by then were exporting about 2,700Mt
by airfreight. SPEG is an umbrella organization grouping all exporters and responsible for
over 90% of all pineapple exports. It has 22 active members and claims about 1,000 outgrower members. In 2004, SPEG shipped by sea, about 50,000Mt of pineapples. Other outgrowers cooperatives, characterized by individual farm holdings of about 5 to 50 acres (2 to
20 ha), produced about 21,000Mt. SPEG assists its members, producers/exporters of
pineapples and other key fruits, by arranging sea-freight space on assigned vessels,
consolidates pineapple cargo for vessel operators, coordinates shipping arrangements on
behalf of its members, and oversees loading of cargo at the port, and prepares all export
documentation. The primary objective of the Association is to ensure that its members satisfy
the quality requirement for export. The strategy is to run and maintain a system of on-farm
pre-shipment inspection at various locations and to get its members to co-operate in
marketing of their produce both locally and overseas. Undoubtedly, SPEG is one of the
private sector associations, which has contributed significantly to the success of horticultural
export business in Ghana.
3.4.14 Vegetables Producers and Exporters Association of Ghana (VEPEAG) - Created
in 1977 by a group of vegetable exporters, VEPEAG is an umbrella association, which
promotes vegetables exports by assisting its members to adopt appropriate methods of
cultivation, production and marketing. It has become today a national association with over
350 registered members. At present, only 50 members are economically active in the
production. Fees collected from members are complemented by GoG and donor
contributions. Vegetable crops are: chillies and pepper, aubergines, Asian vegetables (okra,
tinda and others). The association is currently running production and export trials on sweet
potatoes. The key players in the Asian vegetable sector are mainly Asian entrepreneurs,
settled in the country and operating with a number of small out-growers. It is estimated that at
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least 40% of exported vegetables derive from independent low input / low yield smallholder
productions. VEPEAG, with support from Care International, struggles to assist its members
with extension services. The sub-sector has under-developed infrastructure and logistic to
ensure quality and minimize post-harvest losses.
3.4.15 Export Houses - Three of five Export Houses started operations at the end of 2004
under the Ministry of Trade’s New Industrial and Accelerated Growth Program. The
objective of the Export Houses is to maximize export earnings from NTE products, by acting
as commercial intermediaries between suppliers and buyers located in different countries and
with the responsibility for the effective marketing of goods and products from Ghana. Their
functions are: a) developing export markets through markets research, b) undertaking product
design and development, c) providing competitive finance for export production and
marketing, d) providing human resource training services and development to affiliated
SMEs, e) ensuring product quality and guaranteeing minimum export prices and f) provision
of ware-housing services to SMEs. The three existing export houses are:
a) Ghana Trade Centre (GTC) for facilitating trade between Ghana and the Middle East,
North Africa and the Mediterranean Region. It is owned by private companies with Ghanaian
and Libyan interests, with the GoG acting as facilitator.
b) Ghana Export Trade Company (GEXTRACO), that will focus on the ECOWAS subregion, and
c) GNPA Ltd, a limited liability Company, entirely owned by GoG that covers other strategic
markets including EU, USA and Asia.
3.4.16 Environmental Protection Agency (EPA) – The EPA formulates the national
environmental policy, and co-ordinates and monitors activities that could have an impact on
the environment. EPA ensures that development plans and programmes take into account
environmental concerns through Environmental Impact Assessments (EIA). EPA also ensures
that there is regular monitoring of pre-determined environmental indicators. Where
necessary, EPA enforces the environmental law. It disseminates public information on the
state of the environment and carries out non-formal education programmes. The agency has
the necessary manpower and capacity to undertake the responsibilities entrusted to it.
3.4.17 Feeder Roads Department (FRD) – The FRD is the Government body responsible
for development and maintenance of the feeder road network in the country. Currently there
are a number of donors providing financial support towards feeder road development,
rehabilitation and improvement. The FRD has a highly skilled workforce but carries out a
minimal amount of actual civil works. Therefore, the department does not maintain a fleet of
requisite machinery. The department contracts out civil works to private contractors. Its
major role is to develop technical specifications, design and tender documents, as well as
supervise the work of the private contractors. The FRD also receives resources from the
Ghana Road Fund, which was established in 1997 for regular maintenance of the country’s
roads.
3.4.18 Non-Governmental Organisations and Community Based Organisations – A
number of Non-Governmental Organisations (NGOs) are active in the agriculture sector.
These organisations provide various services relevant to framing activities, such as extension
services, training and limited credit services.
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3.4.19 Other Institutions – Other institutions such as the Agricultural Engineering Services
Directorate and the Women in Agriculture Department have the capacity to supervise the
implementation of project activities in collaboration with the Project Management Unit.
3.5
Potentials and Constraints:
3.5.1 Potential for Horticultural NTE crops: Ghana possesses tremendous potential for the
development of the Horticultural industry. This is characterized by: (i) Under-utilized
agricultural land - Presently, the country has used only 28 % of its full agricultural
potential; (ii) Favourable agro-climatic conditions for a diversified output of agricultural
production, including horticultural products; (iii) Strategic production location -The
location of producing areas close to the ports is a major advantage for the success of the
perishable products exports business; (iv) Strategic country location - Ghana’s geographical
location facilitates access both to large regional markets and Europe, which means an
important advantage in respect of freight time as compared with other producing countries;
(v) Existing labour market -The country possesses a low-cost labor force for profitable
farming and down-stream processing, necessary for the development of a labor-intensive
industry for exports; (vi) Export tradition - The long historical presence of Ghanaian
products in the international markets is widely known and its quality accepted through its
traditional exports of cacao, gold and timber; (vii) Export performance and expansion Despite persisting quality problems, Ghanaian horticultural export has succeeded, in few
years, to capture an important share of the European market. In addition, these products can
be supplied during the European off-season; (viii) Dynamic entrepreneurs - The fast
growing horticultural sub-sector export trade, indicates the existence of a dynamic group of
entrepreneurial horticultural producers and exporters, although the export business is yet far
from receiving adequate Government support.
3.5.2 Potential for Cassava Starch Export. Until 2003, Cassava has been a subsistence
crop for more than 90 % of all food crops farming households in Ghana, who are classified
among the population’s resource-poor communities. In addition to this socio-economic value,
the crop can be grown all year round and grows well on poor soils. As a crop grown largely
by the poorest segment of the rural population, improvement in crop productivity and the
availability of a ready market will positively affect the incomes of those farmers and reduce
poverty. Cassava has the potential to provide new opportunities to smallholders to increase
incomes, thus favouring more equitable income distribution in the rural economy. Cassava is
also important in the further diversification of the agricultural sector, as indicated in the
Government’s Vision 2020. Cassava and other roots and tubers contributed 40% to
agricultural GDP and have great potential to contribute to increased export earnings.
3.5.3 Constraints for Horticultural NTE crops: In Ghana, there is a limited capacity to
comply with more and more stringent quality standards and food safety requirements (such as
the EUREPGAP, IPM, HACCP, Good Agricultural Practices), this has led to loss of market
shares. The value and volume for Ghanaian Aubergine, chillies and peppers exports
decreased by about 7% in 2004, because quality considerations are much below desired
standards. As for papaya, Ghana continues to lose market share to Brazil, especially in
Europe, the reason being that the variety exported by Ghana is the “Solo” cultivar, ideally
suited for air shipment due to its short-shelf life, while Brazil has developed the “Golden”
variety, which can be sea-freighted, and is thus able to keep costs low. The major constraint
related to pineapple production is the choice of the cultivar to be produced. Recent shift of
consumers’ preference in Europe, for the new MD2 variety, against the Smooth Cayenne
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traditionally produced in Ghana, constitutes a threat to the existing market share. This threat
to the Ghanaian pineapple industry has put Ghanaian producers and exporters under pressure
to improve the quality (varieties and quality standards) of their product, in a period as short as
possible. The Government has taken steps to assist producers to acquire suckers of MD2.
Private and public adaptive field trials have started in 2004. However, the supply of suckers
is still limited and cost-prohibitive, for the large majority of out-growers and other
smallholders.
3.5.4 Other constraints relevant to the overall horticultural production activities are: pests
and diseases, weeds, soil fertility, harvesting and post-harvest handling methods, including
transport. Economic constraints comprise credit and price fluctuations. However, the
production zone is confined to areas within a 40-km radius of air and seaports. The major
physical constraints are the lack of adequate export infrastructure facilities for perishable
products (handling facilities, cold storage rooms, cold chain, export logistics, rural road
network). The current status of roads and feeder roads delay transit time from farms and
packing houses to place of shipment both for conventional transportation and reefer container
movements, therefore unnecessarily increasing costs. With exception of two or three
exporting companies, the entire horticultural business in Ghana is being performed without
the use of controlled temperature devices at packinghouse.
3.5.5 Institutionally, research and development efforts as well as extension services are not
performed in a production-oriented way, targeting particular horticultural crops. Not only is
there need to increase yields and adapt to market conditions through new varieties, there is
also need for all parties involved in the export sector to understand the reasons for applying
Good Agricultural Practices in the production process. Rain-fed agriculture and inadequate
irrigation limit the potential yields and quality of the products. The marketing constraints are
also important. There is no use of international media and advertising companies to publicize
in magazines and newspapers. Few activities with good results have been developed at
special events such as food fairs.
3.5.6 Constraints for Cassava Starch Export. Major constraints of the crop have been
identified and are now being addressed by the on-going Roots and Tubers Improvement
Project (RTIP), and results from the project at mid-term review in 2003 indicate that most of
the constraints are relieved. Farmer communities throughout the country are feeling the
economic and social impact of these achievements. Achievements include: (i) The
development, multiplication and distribution of new disease-tolerant higher yield cassava
varieties. (ii) Training in improved farming techniques and planting material multiplication at
local levels (for distribution) was successfully undertaken. Ultimately, cassava yields jumped
from 8 Mt to 20 Mt/ ha.
4.
THE PROJECT
4.1
Project Concept and Rationale
4.1.1 The development of non-traditional exports is a major element of Ghana’s strategy to
become a middle-income country by the year 2020. Ghana has a comparative advantage in
the production of crops such as pineapple, yam, cassava, papaya, mangoes, and vegetables.
However, many constraints hinder the production as well as the export of these crops. These
constraints include the lack of best cultural practices, insufficient quantity and quality of
21
production-inputs, lack of the handling facilities for export, high costs of transport, high postharvest losses, and lack of international marketing, quality and management skills in the
export markets. If these constraints are properly addressed, Ghana would achieve its export
target.
4.1.2 The export marketing and quality awareness project is designed to address the above
constraints in order to improve the quality, increase the quantity and build confidence in the
agriculture export sector in Ghana and of the cassava output which would feed into the
Ayensu processing factory. As a result, the project design process (identification study on
agro-industry conducted in 2000 through an ADF grant, the preparation and appraisal
missions) involved intensive consultation with the operators in the industry, farm
communities and donors financing the sector. The Appraisal Team held extensive meetings
with primary beneficiaries (farmers, association representatives, ASCO Management, Ports’
officials) and representatives of the donors (WB, USAID, DFID, CIDA, DANIDA, European
Union, Agence Française de Développement (AFD), JICA, KFW, GTZ, and FAO) involved
in the sector, to explain the basic strategy underlying the project. It emerged from this
exchange of views with all the donors that the project concept and details are appropriate for
the sector and the project is complementary with other ongoing and planned interventions.
4.1.3 Further, the project is designed to be carried out through a participatory approach. The
full involvement of the beneficiaries in the design of demonstration farms, training (input into
skills needs), pack houses, and feeder roads is envisaged, as well as their participation during
the project implementation phase, in the selection of sites of the infrastructure and
maintenance of such structures. This will increase their sense of ownership and responsibility,
leading to more sustainable farming and export activities. Further, all the beneficiaries will be
represented in the project co-ordinating committee, which will oversee the implementation of
the project and ensure the achievement of the overall objective. In addition, a total of ten
consultations workshops (two each year) will be organised during the course of the project
implementation. The objective of these workshops is to create a favourable framework for
exchanging views and concerns of the project beneficiaries and other stakeholders in order to
take appropriate measures as necessary during implementation. The above will increase the
stakeholders’ sense of ownership and responsibility, leading to more sustainable horticulture
production activities.
4.1.4 In designing the project a number of options were considered in selecting the
horticultural crops to support, taking into account the very competitive nature of the industry,
involving powerful multinational companies who have resources to easily influence
international markets. For horticultural crops, the project has chosen to support a wide range
of products instead of one to minimize risk of possible market changes, and in particular has
avoided products such as bananas, which are overwhelmingly in the hands of large
multinational companies. The support to cassava farmers is a timely undertaking at a time
when the Government is making concerted efforts to support agro-industries including
cassava starch processing. This provides for a readily available market for the tubers at
standard prices. The project has opted to support the farmers in the surrounding area of the
Ayensu factory collectively through their already established association.
4.1.5 The design of the project calls for: (i) the effective two-way flow of information
between research and farmers/exporters in order to improve researchers’ use of information
received from exporters to identify, characterize and prioritize research work, making
22
research demand-driven and involving producers as full participants in the development of
technologies and to improve the usefulness of research by disseminating and applying the
research findings; (ii) the development of an efficient export marketing system and improved
infrastructure, for value-addition to agriculture, to reduce post-harvest losses and to stimulate
supply responses; (iii) the effective participation of beneficiary groups.
4.1.6 The Bank’s experience in implementing its projects and the experience from other
donor-funded projects in Ghana have significantly influenced the design of the present
project. The GoG has demonstrated its commitment to this intervention by initiating
institutional capacity building, especially in AgSSIP. The Government will assign a
Monitoring and Evaluation officer to the current HEII technical team, who will remain in
PPMED but work closely with the project team to strengthen project management and
monitoring. This will have the advantage of avoiding duplication between the Bank
intervention and those of other development partners, namely the World Bank and USAID
which are presently involved in the horticultural sub-sector.
4.2
Project Area and Beneficiaries
4.2.1 Project Area: The project will be implemented in the following four Regions of
Ghana: Central, Eastern, Greater Accra and the southern-most part of the Volta, due to its
proximity to the seaport and airport. Most of the horticultural products for fresh export are
produced in these regions. A large part of these regions fall within the Coastal Savannah
Agro-ecological Zone with a total mean rainfall averaging 800 mm during two seasons:
April-June and September-November. The project area is home to 8.2 million people
equivalent to 45% of the country’s total population, of whom 4 million live in rural areas.
4.2.2 The area covers about 53,000 square kilometres, representing 22% of total area in the
country. Evacuation of crops from some parts of the project area is difficult due to the poor
state of the access roads between farmers’ fields and the trunk roads. It is estimated that
800km of feeder road system needs upgrading. Fifty percent (50%) of these feeder roads are
in the areas where there is a concentration of horticulture and Ayensu cassava farmers. Most
of the farm holdings are located in rural areas and distanced from structures that could serve
for storage. Nevertheless they are close to a number of peri-urban areas where electricity
power is available and hence storage facilities can be erected.
4.2.3 Beneficiaries: The farm structure in the project area is typical of those found in most
parts of the country. The basic production unit is the nuclear family, with an average
household size of about ten, with little or no hired labour. However, this type of farm familystructure has been changing. More and more farmers are now using hired labour. Farming
systems for both horticultural export crops as well as for cassava, practise the nucleus outgrower schemes. These are schemes where progressive farmers, usually with larger land
parcels, are linked to a number of small-scale producers for technology transfer, input
provision, and marketing of the produce. Small-scale farmers obtain their inputs through
these nucleus farmers and sell their produce through them.
4.2.4 Gender-specific roles exist in farming operations. Men normally carry out land
preparation, ridging, re-ridging, and spraying, while the women plant, weed, water, birdwatch, harvest and carry out post-harvest handling and marketing. For horticultural
production, women are predominantly engaged in weeding, spraying, picking, sorting,
grading and packing. Their farm incomes range from as little as Cedis 500,000 to as high as
23
Cedis 86 million per year per land holding. An estimated 70% of farmers in the target area
have land holdings of less than 1.2ha and up to 18% have land holdings ranging from 1.2ha
to 2ha. Productivity remains low partly because the level of mechanised farming is limited
for a large number of horticultural and cassava farmers. The main tools used are the same as
for other crops (hoes and cutlasses). The project area has abundant land for potential
expansion of cultivated areas. However, although access to land is not a major constraint,
women and settlers still face difficulties in owning land. The major constraints to women
operating their own farms are limited access to capital and technology.
4.2.5 Food crop farmers (which includes small-scale horticultural farmers and cassava
producers) represent the group with the highest incidence of poverty (59%) in the project
area. Poverty is more prevalent among food crop farmers (60%), followed by export farmers
(40%) and private informal employees (25%).
4.2.6 About 13,502 rural households or 81,012 people will directly benefit from the project.
It is envisaged that a total of 12,000 people employed at various levels of the horticultural
export industry will be trained out of which 4,700 will be women. The major beneficiaries of
the project are the members of the existing producers/exporters associations for horticultural
export crops (SPEG, VEPEAG and FAGE). Members of associations comprise a small
number of nucleus farmers and a large number of out-growers linked to the nucleus farmers,
whose farm holding varies in size depending on the crop grown. The average farm size of a
pineapple out-grower (nucleus farm) is approximately 20ha, compared with 2ha for a nucleus
vegetable grower. Farmers in the project area are involved in the production of other food
crops in addition to their export crop farming activities. They produce a significant amount of
food crops, mainly for household consumption. Nevertheless, some farmers produce other
cash crops such as the tree crops of cashew and cocoa. Current annual average income is
ranged between Cedis 0.50 million for Chillies growers, and Cedis 43 million for Papaya
growers per ha. Almost all farmers practise a mixed farming system. Given that horticultural
farms are usually found near water bodies, these farmers are also involved in fishing and even
other non-farm activities such as trading, artisan work and small-scale processing. Trading, a
primary occupation for women, is practised as an off-season activity to supplement farm
incomes. Fishing and fish smoking activities are prevalent along the coast and along the
major rivers such as the Volta. Most of the activities are inter-related as income from trading
is often used to finance agricultural production. For many farm families, incomes from
farming are small, as a multitude of producers compete, with similar surplus supplies.
4.3
Strategic Context
4.3.1 The Bank Group Vision Statement indicates that rural development in general, and
agriculture in particular, is its basic strategy for poverty alleviation in its RMCs. Similarly, the
Government of Ghana goal for the agriculture sector is to reduce poverty, through improved
productivity. In the context of Ghana’s agriculture-dominated economic and employment
profile, as indicated in Chapter 3, the Government has recognized that development of the rural
economy is the catalyst for the transformation of the national economy, and the drive to
economic progress. Rapid growth in the agricultural sector is therefore central to any strategy for
reducing poverty and creating employment and growth opportunities. Fostering non-traditional
exports, especially in agriculture, where there is growing market demand, will be key to lifting
growth rates of the sector as well as the economy.
24
4.3.2 At operational level, the strategic approach as articulated in the Ghana Poverty
Reduction Strategy paper (GPRS), in addition to the above, places particular emphasis on
improving skills, promoting the use of improved technology, improving access to capital
investment resources for the rural entrepreneurs, and building capacity in the processing of
agriculture produce. The strategy envisions increasing rural production and employment.
4.3.3 Government strategy calls for diversifying the agricultural economic base, enhancing
the economic base for the rural subsistence farmers, as well as generating employment. Given
the potential for generating income from production of high-value crops, and the potential
foreign exchange earnings from horticultural exports, the project is in line with the
Agricultural Development Strategy for Ghana as it will contribute to the key sector issues of
poverty reduction; food security; and generation of employment and support for women.
4.3.4 As designed, the project will contribute to the broad goals of improving living
standards of the rural population, particularly the small-holder farmers, and contributing to
the diversification of the country’s export base. The project is therefore in line with the
Government development strategy expounded in the GPRS in that the intervention directly
addresses poverty reduction It is also consistent with the Bank Group strategy for the
agriculture and rural sector in Ghana, as stipulated in the Country Strategy Paper (CSP) for
Ghana, which is to focus on poverty reduction and food security. Further, it is consistent with
the Millennium Development Goal of halving poverty in the year 2015, the goal of NEPAD
agriculture sector plan, and the Comprehensive Africa Agriculture Development Plan.
4.4
Project Objective
The sector goal is to contribute towards the goal of increasing export earnings of nontraditional agricultural products. The objective of the project is to increase incomes of
horticulture crop farmers and exporters and of cassava producers.
4.5
Project Description
4.5.1 The project will be implemented over five years in four regions. The project will have
four components, namely (i) Production and Productivity Enhancement; (ii) Export
Marketing Promotion and Infrastructure Improvement; (iii) Capacity Building; and (iv)
Project Coordination and Management.
(A)
Production and Productivity Enhancement:
Fruits and Vegetables
4.5.2 The envisaged outputs of this sub-component are: (i) Four established and equipped
demonstration farms and training in Good Agricultural Practices (GAP); (ii) Production
protocol manuals of GAP published and market requirements documented; (iii) Increased
volume of MD2 pineapple suckers and quality seeds of other horticultural crops and cassava
available to farmers. The introduction of improved technology of high quality and high
yielding planting materials will lead to improvement of quality and productivity of produce.
4.5.3 Given the level of sophistication of Good Agricultural Practices (GAP) for export
fruits and vegetables, the project will set up four demonstration farms in the project area, of
10 hectares each, to serve as in-field training centres in horticultural crop production. The
PCMU, along with the Crops Services Directorate will select the sites for the demonstration
25
farms. The sites selected for the demonstration farms will be on existing Government
agricultural training centres, which will be expanded to meet the required additional function.
The project will then enter into agreement with each of the selected four training centres, one
in each region, to establish demonstration farms. With the help of a design engineer,
additional infrastructure will be determined and designed for construction. In the meantime,
the PCMU will coordinate the clearing of land with close supervision from scientists at CSIR
and respective Regional Extension Offices to make ready the plots and the irrigation systems,
for planting demonstration horticultural crops.
4.5.4 The management of the demonstration farms has been elaborated under Section 5.2,
Institutional Arrangements. Activities at the farms will include demonstration of planting
calendars, ideal maturity at harvest, size of fruits, use of irrigation ponds and reservoirs, and
on-farm produce handling and packaging practices at various stages, before produce is moved
to pack houses which are part of the cold chain facilities. The focus will be on developing
quality produce, as this is the main factor in promoting export growth.
4.5.5 In the first year of project implementation, while construction work and land clearing
work is going on, the Government will assign two scientist, four subject matter specialists,
four extension agents and four irrigation technicians, and will recruit a total of six farm
workers and support personnel, from within the Districts in the Region to work on each of the
four demonstration farm. This is the team, which will run the farm, and will receive weekly
supervision missions from scientists at CSIR. Each demonstration farm will be equipped with
office and training equipment and materials; one pick-up truck; one tractor and
accompanying accessories; motorcycles for extension staff who will follow up with farmers
at their farms; field equipment (including irrigation materials); commerce and packaging
materials; and will receive help with farm operating costs. The farm implementing team will
be charged with the responsibility of procuring, through the AgSSIP procurement Unit, farm
inputs and consumables to operate the farm.
4.5.6 Under this component, the project will also provide funds to support additional
activities of the ongoing programme on accelerated multiplication of the high value MD2
pineapple suckers, as well as seeds of improved varieties of other fruits and vegetables. Given
that the accelerated multiplication of MD2, is already ongoing, the PCMU will liase closely
with the programme implementing team to ensure that the activities supported by the project
are clearly identified and monitored accordingly. With the increased amounts of pineapple
suckers, farmers will be able to plant and export consumer-preferred produce to enable them
reclaim the European market share, which has been lost in the last two years due to change in
consumer preference. With regards to crops other than pineapple, additional on-farm and onstation trials will be established, at the existing seed multiplication centers, to grow higher
yielding and more market-adapted crops. This programme is being implemented on a costsharing arrangement involving growers, exporters, research institutions and seed companies.
The cost-sharing arrangement will continue under the project to ensure sustainability of seed
multiplication. The PCMU will sign an agreement with the UNU-INRA/Botanic Department
and the AESD/Crops Research Institute who will implement the sub-component on
development of tissue culture and farm demonstration programmes.
4.5.7 The project will provide to the implementing institutions: Council for Scientific and
Industrial Research (CSIR), Crop Research Institute (CRI) and the Agriculture Engineering
Services Department (AESD), three vehicles, field and laboratory equipment to be used for
training purposes, field allowances, and office support services. With the assistance of an
26
international consultant, CSIR will develop production protocol documents and publication
materials (fact sheets/folders/ extension guides), and disseminate the technology information
to the farmers and other stakeholders, through a variety of publicity media. The consultant
will also develop audio-visual material, to be shown at district and regional centres in the
project area.
Cassava
4.5.8 The expected output of the Production and Productivity sub-component on cassava is
increased availability of improved planting materials for farmers in the Ayensu area. The
outcome of this output is increased production of cassava with high starch content to meet
demand at the Ayensu Starch Company, which will in turn lead to increased incomes for
small-scale cassava farmers.
4.5.9 The PCMU will coordinate with the IFAD financed Roots and Tuber project currently
involved in the production of high quality cassava planting materials, to make available to the
10,000 farmers in the Ayensu area. For continued supply of these planting materials, the
PCMU will identify the appropriate sites for multiplication of planting materials to supply to
the farmers in the area. Project activities under this sub-component will focus on assisting the
farmers collectively through the existing Ayensu Cassava Farmers’ Association. The project
will provide the Association with five farm tractors and accompanying implements, to
supplement the existing fleet of four, so that each of the nine districts will have one tractor for
land preparation and other activities. The tractors will be hired to farmers at a fee, to assist
them with land preparation, as is the practice at present.
(B)
Export Market Promotion and Infrastructure Development:
4.5.10 The main outputs of this component will include: (i) Trade Brands for Ghanaian
produce developed and used by exporters; (ii) 407 km of year-round accessible feeder road
network; (iii) Marketing and demonstration farm facilities constructed and upgraded; (iv)
Consumers’ needs on international market and marketing strategies for Ghana produce,
documented. (v) Major export destinations for Ghana’s produce in EU aware of produce
quality and brands. These outputs will contribute to the promotion of export markets of
horticultural crops and of cassava starch from the Ayensu Starch Company as well as to
increased incomes of producers and associated actors in the industry.
4.5.11 Activities under this component will complement those of the ongoing Trade and
Investment Program for a Competitive Export Economy (TIPCEE), financed by USAID, as
well as the World Bank-financed Horticultural Export Industry Initiative.
4.5.12 In Project Year 1, technical assistance services in international marketing will be
procured to: (i) identify international markets; (ii) study and document consumer preferences
for Ghanaian horticultural produce in those markets; and (iii) analyze current and potential
markets for various horticultural products so as to prioritize those with higher potential for
expansion. Although the focus will be on European Union countries, the analysis will include
other potential markets such as in USA, Middle East and ECOWAS Countries.
4.5.13 The study on consumer preferences will provide information on consumer opinions
about the different characteristics of Ghanaian versus competitors’ products which are
already in the market. The data collected will be entered in a live database by the consultant,
and will from then be updated periodically by GEPC (a government department) and FAGE
27
(a private exporters’ association). This information will be disseminated to farmers and
exporters by GEPC in close collaboration with farmers’ associations, through their member
associations. This will be done in the form of seminars and prepared information booklets..
At the start of the project, this activitiy will be done with assistance from the technical
assistant. The PCMU will monitor the process. As indicated in section 3.4, GEPC (a GoG
department) and FAGE (a private institution) have the capacity to undertake this task. The
public-private partnership is expected to even foster effectiveness implementation. They are
currently financially viable and they maintain audited accounts. This public-private
collaborative effort will ensure efficiency through the direct involvement of beneficiaries.
Being well informed, the industry will be better able to respond to the dynamics of consumer
preference, with its susceptibility to variations partly due to competitors’ promotion
campaigns.
4.5.14 By Project Year 3, as production of horticultural products entering the import markets
under the ‘improved quality regime’ increases, GEPC and FAGE will develop a promotional
strategy for the ‘New Ghana Produce’. The focus of the strategy will be to create awareness
in international markets that the New Ghana Produce adheres to GAP, residual-free and
ethical procedures.
4.5.15 Specific promotional activities will involve: organizing consumers’ meetings in
selected markets; use of international media and advertising companies to publicize in
magazines and newspapers; and participation in special events such as food fairs and culinary
shows. An advertising company specialized in this area will be engaged by the project to this
effect. The launching of the promotional campaign will include the preparation of relevant
promotional material and its dissemination through commercial attaches at Ghanaian
Diplomatic representations overseas and through the Ministry of Tourism. The USAIDfinanced TIPCEE project is also supporting some promotional activities which involve
establishing a presence of exporters in the importing countries. The activities under this
component will therefore complement efforts under the TIPCEE project.
4.5.16 The executing agency will work closely with the Department of Feeder Roads under
the Ministry of Infrastructure, to upgrade about 407 km of feeder roads within the four
regions. The PCMU will sign an agreement with the Department of Feeder Roads, who will
implement this sub-component. Key elements in the criteria for selecting the location of the
407 kilometers of feeder roads to be upgraded include (i) a high density of farmers, and (ii)
ensuring that there is complementarity with other donor interventions, especially that of
JICA.
4.5.17 The improved feeder road network will open up fruits and vegetable production
centers to pack houses, where this produce is sorted, cleaned and packed; and cassava fields
to the Ayensu Starch Company. Improved all-year-round accessibility to processing and
market centers is a major contribution to the setting up of a reliable cold chain for
horticultural produce. The improved road network is expected to attract more private
transporters. This will generate competition in the trucking industry, resulting in reduced
hauling costs to farmers. For horticultural produce, the good standard roads will minimize
physical damage, a major element in determining the quality of produce. For cassava, the
quick delivery of tubers will improve quality as the quantity of starch in the produce is
preserved where the lag time between harvesting and processing tubers is minimized.
28
4.5.18 Other infrastructure development will include three types of civil works: farm
buildings at demonstration farms; pack houses; and a residual analysis laboratory.
(a) The project will finance the construction of farm buildings and facilities for trainees at the
four demonstration farms which will be established under component A. This work will start
in Project Year 1. The project team will procure engineering consulting services to prepare
bill of quantities, specifications and bidding documents for contractors.
(b) The project will also finance the construction of four pack houses where produce will be
hauled after harvest, for sorting, grading, cleaning and packing. The four pack houses will be
additional to those being constructed under the World Bank-financed Horticultural Export
Industry Initiative, which is financing two other pack houses which will be located in the
project area. Given that the Executing Agency and the project implementing team is also
implementing the HEII, the location of the pack houses will be planned strategically, with the
involvement of key stakeholders like farmers’ representatives, research and extension
departments, to ensure efficient cold chains in each region. A study has been commissioned
to explore various methods of management for the cold chain facilities. Under Bank Group
and World Bank Aid coordination arrangement, both institutions will formulate the Terms of
Reference for the consultant, to ensure that the Bank will have input in the nature and concept
of the investigation to be undertaken. The management of the pack houses will therefore be
based on the recommendations from this investigation.
(c) The Ghana Standards Board has the necessary trained personnel and newly procured
equipment to effectively carry out testing of agricultural produce for residual elements.
However, they have limited laboratory space to house the personnel and equipment, to
efficiently undertake residual analysis. The project will therefore construct one residual
analysis laboratory at GSB premises, to be used for the analysis of chemical elements in fruits
and vegetables destined for the export market. The laboratory will house the equipment
which has already been provided to the Board by other donors. The residual laboratory is
managed by the Ghana Standards Board and operates on a cost recovery basis. This system
will continue, as it has ensured the sustainability of the laboratory facilities over the years.
(C)
Capacity Building:
4.5.19 There are two major outputs expected from this component: (i) Trained horticultural
producers and exporters, cassava farmers, farm workers, extension personnel, seed
inspectors, and other private entrepreneurs; (ii) Strengthened horticultural producers’ and
exporters’ associations. From these outputs there will be increased production as more
farmers use improved planting materials and reduce post-harvest losses. The end result will
be higher levels of quality horticultural produce for exports and of cassava for the Ayensu
processing factory
4.5.20 Activities under this component will include, for horticultural crops, the following: (i)
sensitisation of about 80,000 farmers, farm workers, processors, members of community
based organizations (CBOs) involved with horticulture crop production, out of whom 40%
will be women. The sensitisation exercise will create awareness in production, handling,
storage, processing of crops, quality standards for export market. During this exercise, the
target groups will increase their knowledge and understanding of good crop cultivation
practices, which will enable them to increase their outputs and hence export earnings; (ii)
training of 600 executives and decision makers (government, community, and private sector)
29
in export documentation and financing; (iii) training of 1,200 trainers in good agriculture
practices (GAP), analysis of residuals in fruits and vegetables and in quality assurance. Most
of the trainers will be extension workers, but will also include leaders of CBOs and
Associations; (iv) training of 1,200 export/trader service staff, (ports, customs, banks,
regulatory institutions), in good service delivery. (v) training of 3,120 workers in processing
units (graders, sorters, and packers); (vi) 5,000 farmers will be trained in GAP and basic
accounting methods. Farmers’ training will also include audio-visual presentations at village,
district and regional levels, on practices adopted in other countries and quality requirements
in international markets. Most of the above-itemized training sessions will be carried out at
the demonstration farms to be established in the four regions under Component A.
4.5.21 The training in GAP will be offered by hired technical assistants, at a fee to key
stakeholders (farmers, harvesters, graders, sorters and packers) involved in the production
and export chain of horticultural crops, and will be carried out by extension workers who
themselves will receive specialized trainers’ training. The skills acquired at demonstration
farm centres will enable farmers and others to better grow and prepare high quality export
produce which will meet the requirements under EUREPGAP and other stringent quality
level standards. The standards include residues in produce, standard-sized produce, and crops
produced under acceptable phyto-sanitary conditions.
4.5.22 As part of the institutional support to the upgrading of the horticultural export
industry, the project will provide two 10-tonne temperature-controlled trucks, to SPEG and
VEPEAG for moving high perishable produce from farms to pack houses and to export
points, pack houses and subsequently airports or seaports. The trucks will be hired by
members of the associations, with fee income used to run and maintain the fleet. The amount
of the fee will be determined by the association councils taking into consideration market
rates as well as the cost of maintenance.
Cassava
4.5.23 The expected outputs of this sub-component are: (i) an efficient Farmers’ Association
providing improved services to its members; (ii) 10,000 sensitised and trained farmers in
Good Agricultural Practices so that they are better able to produce increased amounts of high
quality cassava per unit area of land. The outcome of these outputs is improved quality and
increased production as more farmers use improved planting materials and reduce postharvest losses, all of which will in turn result in increased quantity of produce for the Ayensu
factory.
4.5.24 For cassava production, the project will support the: (i) mobilization and training of
10,000 farmers and community based organizations involved with cassava production, in
good agricultural practices as well as in basic business management; (ii) training of 50
trainers (extension workers, leaders of CBOs) in good agricultural practices and analysis of
starch content in the tubers to ensure high quality products for sale to the Ayensu Starch
Company; (iii) strengthening of associations, through training of their elected leaders, so that
they are better able to deliver services to the members and to maintain their assets especially
equipment. The topics for this training will include management of associations, accounting,
conflict resolution techniques, negotiation techniques to upgrade their skills in their dealing
with the business community; (iv) as production increases, farmers will require additional
support for reliable transportation of their produce to the factory. The project will therefore
procure in Project Year 4, two 10-tonne trucks to be rented out to farmers for hauling
produce.
30
4.5.25 To facilitate access to credit for horticultural and cassava growers, as well as
exporters, the project will develop awareness of the existence of various credit resources in
the country. In particular, project management will establish direct contact with the upcoming
Millennium Challenge Assistance Project, which plans to establish a USD50 million special
line of credit for: smallholders, out growers, and medium- to large-scale farmers; processing
companies, transport, logistics and equipment hire operators. Credit sensitisation seminars
will be included during the mobilization exercises.
4.5.26 Other financial training will comprise: (i) Fifteen administrative staff and elected
leaders (management committee) of the Ayensu Cassava Farmers’ Association will receive
training through project-financed consulting services in organizational skills and governance,
to provide business services to its members; (ii) Farmers will be trained in GAP as well as in
basic accounting methods to enable them undertake timely production and marketing of high
quality tubers. The training methodologies will combine lectures and seminars with
workshops, practical exercises and discussions, the provision of simplified written literature
(handbooks and manuals), and farmer exchanges. These farmer exchanges between districts
will broaden the outlook of the farmers and increase productivity and incomes by sharing
lessons learned and best agricultural practices.
4.5.27 Expert advisory services will be recruited to establish a living database of market
information on cassava starch market trends and new technologies to be based at the
Secretariat of ACFA. The offices of the Secretariat will also be equipped with office
equipment (computers, printers, fax, and telephone) and furniture.
4.5.28 The Ayensu Starch Company is the primary target market for the increased cassava
produce in the Ayensu area. To support the development of this large and reliable market for
cassava farmers, the project has made provision for Technical Assistance to assist the factory
management in market analysis and strategic planning as well as in business planning.
4.5.29 HIV/AIDS and Malaria: The project will support community efforts for the
prevention of HIV/AIDS and malaria. Farmers, exporters and extension agents targeted under
the project will receive HIV/AIDS and malaria awareness and prevention messages. This will
be achieved by incorporating training modules on the subject in the courses that will be
organised for the various target groups. The process will involve close collaboration with the
Ministry of Health officials, at all levels of the administrative structure.
(D)
Project Coordination and Management Unit:
4.5.30 The Project Coordination and Management Unit (PCMU) has been established under
the Horticultural Export Industry Initiative (HEII) financed by the World Bank. The PCMU
comprises a coordinator; three technical specialists in the fields of (i) research, innovation,
food safety; (ii) infrastructure; (iii) horticultural planting materials and seeds; two
procurement specialists; two accountants; a M&E specialist; and support staff. Out of the
three technical specialists, one will be a manager of the project. The Government will assign
to the project, a Monitoring and Evaluation officer to work closely with the current HEII
technical team, who will remain in the Programme Planning Monitoring and Evaluation
Directorate of MOFA (PPMED). Support staff will be provided by AgSSIP. The PCMU will
supervise the selection and screening of individuals who will participate in the various
training programs and will also supervise the work of all consultants recruited under the
project.
31
4.5.31 Budget provision has been made to audit the project once a year and to undertake a
mid-term review in year three of project implementation. Stakeholder planning and review
seminars and workshops will be carried out and organized by the PCMU to ensure that key
stakeholders participate in the planning and implementation of project activities.
4.5.32 The project will support the project team with operating and maintenance costs for the
PCMU, costs associated with travel and field trips, and allowances for the project team
members. In order to effectively coordinate the project activities in the project area that
encompass the four regions of the country and to implement the activities mentioned above,
the project will require mobility. Provision has therefore been made for two vehicles, to
replace the current old fleet.
4.6
Production, Markets and Prices
Horticultural Produce:
4.6.1 The project will increase the production of pineapples, papayas, mangos and
vegetables as a result of improved quality and quantity. The expected increment by 2010 is
composed of 30,000Mt of pineapple, 5,000Mt of papaya, 19,000Mt of mango and 3,000Mt
each of aubergines, chillies and okra. The World Export markets for 2003 for the principal
horticultural crops are indicated in the table below.
4.6.2 The production increase resulting from the project will only represent 13.6% of the
expected increase of pineapple imports into the EU, 4.5% for papayas, and less than 2% for
the other products. These amounts are small in comparison to the size of the markets,
especially in relation to the EU countries which form the primary market for Ghana’s
horticultural produce. The incremental volumes would easily be absorbed by the EU market.
As a result of these changes, Ghanaian share of the EU import market will grow from 5.7 to
10.1% for pineapples, from 2.6 to 4.7% for papayas, and to a lower extent for other products.
The increases in market shares are expected to be achieved by the end of project
implementation. Major existing constraints to the export sub-sector will be addressed through
project activities; this should lead to an increase in market share where Ghana already has
secured market entry. Market indicators for non-traditional agricultural exports are explained
in Table 3.2.
Marketing and Markets
4.6.3 The process of movement of fruits and vegetables is described below particularly for
pineapples. Harvest and packing. Pineapples are harvested the day before shipment or early
the same day. The first product selection is done before harvesting, by picking only those
fruits of export market standards in size and in shape. On average 60% is harvested, with the
balance of 40% left for local market. After harvesting, pineapples are placed in strong
resistant plastic cases/baskets. From the farm, fruits are transportation to packing places. At
the packing-shed, a second classification is performed while transferring the pineapples from
the plastic cases into the export cartons. Rejection does not exceed 1% and are mainly due to
cuts to the fruit while harvesting.
4.6.4 Packaging: Cartons used for exports are imported. They are bought from Ghanabased commercial representatives of European manufacturers. Representatives periodically
run short of stock, and exporting companies borrow from each other to ship their produce.
Each carton carries 12kg net weight of fruit. The cartons are palletized with 65
cartons/pallet.- Each carton is labeled with indication of date, size classification, farmer
origin, exporter and receiver.
32
4.6.5 Marketing Channels: The movement of horticultural produce within the country and
before export is as elaborated in paragraphs 3.2.8, 3.2.9, and 3.2.12 above. Phyto-sanitary
and Customs inspection: With the exception of Companies acting within declared free
zones, both inspections are performed at port/airport prior to loading.
4.6.6 Prices: Annex 8 shows the trend of prices of horticultural products during the last 5
years. Generally the data show a declining trend over time, exhibiting a decreasing market
value of Ghana’s produce, which underscores the need to improve the quality of the produce
so that the produce can attract high premium prices of the high end product in terms of
quality.
Cassava
4.6.7 Production: With 9.8 million tonnes produced in 2004, Ghana is the 6th main
cassava producer in the world with 5% of the world production. It is the third largest
producer in Africa after Nigeria and D. R. Congo, and had a significant production increase
of 21.2% for the period 2000-2004. The 48.7% increase in cassava production in Ghana
during the last 10 years is as result as of a similar increase in the area under cassava
cultivation (48.6%), and not as result of higher yields. According to FAO data, yield is back
to levels similar to the 12 tonne/ha level of 1995. The project area comprises 46.9% of the
total area cultivated with cassava in the country, representing 52.4 % share of total national
production. With exception of Greater Accra where cultivated area is very small, and Eastern
Region, the area has yields well over the country’s average.
4.6.8 The annual average consumption of cassava food has dropped by 6% for the period
1998-2002 from 226.6 Kg/capita to 212.9 Kg/capita respectively, due to other substitute
starch foods. Cassava consumption as animal feed has increased from 0.619 million tonnes in
1998 to 2.057 million tonnes in 2002. This increase by 232% is reflected in the share of
animal feed use of cassava that changed from 8.7% in 1998 to 21.2% in 2002. The use of
cassava as food, despite its growth in volume, has lost share from 59.4% to 44.8 % for the
same period. “Other uses” of cassava, although from a low base, have trebled.
4.6.9 Marketing: Losses of cassava are estimated in about 30% of the total domestic
supply, mainly due to the low quality of the road-network transport that prevents marketing
of produce away from local areas. The bulky nature of the produce also restricts movements
to distant urban markets, where the road network is poor.
4.6.10 Ayensu Starch Company (ASCo), is the first of 10 planned starch plants, established
at Bawjiase, in Awutu-Effutu-Senya district of Central region. Presently ASCo is short of
cassava and it is not operating until the next harvest. The Ayensu Cassava Farmers
Association, on the other hand, has received capacity building support, in terms of improved
planting materials, from the Roots and Tubers Improvement Project, and an internal
extension service, provided by the Company.
4.6.11 Prices: Prices of cassava fluctuate significantly during the year having a low price
line during harvest season. At present, average market prices are around 400,000 to 450,000
cedis per tonne. Fluctuation can range from a minimum of 300,000 cedis/tonnes to a
maximum of 650,000 cedis/tonne. However, in supplying to the Ayensu Starch Company,
farmers are assured of the price of their produce throughout the year.
33
4.7
Environmental Impact
4.7.1 The project has been classified under Environmental Category II, therefore having
limited environmental impacts that can be easily mitigated by applying specific measures or
changes in the project design. It is not located in or close to environmentally sensitive areas
such as ecosystems with high species diversity, or which harbour endangered species or
unique landscape features, which should be preserved.
4.7.2
Positive impact: The overall environmental impact of the project is expected to be
positive. Increases in production will result from the use of higher quality seeds, and
application of Good Agricultural Practices (GAP) on existing farmland. Most project
activities concern the rehabilitation of farmland through water and soil conservation
operations at a small-scale level. The average size of cultivated horticultural smallholdings is
less than 2ha and these are concentrated in the existing irrigation schemes or on land that is
less vulnerable to soil erosion. Activities under the Capacity Building component will
encourage rational utilization of the natural resources (land), as most of the production will
derive from increased crop productivity. Given the stringent market requirements for quality,
farmers and exporters will be compelled to apply environment friendly production methods in
order to effectively penetrate the target markets. For example, detection of harmful chemical
residues in the produce will render the entire consignment unfit for the market or at best
reduced in value. Such strict Good Agricultural Practices will force producers to use
reasonable amounts of agro-chemicals which will in turn be favourable for the environment.
The rehabilitation of the feeder road network will be mainly spot improvement, consisting of
filling potholes, and providing drains and culverts on specific portions of the roads.
4.7.3
Negative impact: The likely negative impacts are surface and ground water
pollution where farmers fail to comply with recommended levels of agro-chemicals. The
frequent use of tractors for land preparation may exert considerable force on the soil,
resulting in degradation on the soil structure and leading to soil compaction. Other possible
environmental impacts arise from feeder roads improvement and include disruption of local
hydrology and drainage patterns, destruction of natural habitat following construction of
camps, roadside drains and borrow pits, silting in rivers from road wash-off, accident, dust
and noise. Surfaces of most rural roads are not sealed and are therefore prone to erosion,
particularly in areas of heavy rainfall and poor drainage. Erosion affects the main
carriageway and the drains especially at steep sections where it creates deep gullies. The
combined effects of gully erosion and localized ponding render most feeder roads unmotorable during rainy seasons.
4.7.4
The various stages of rehabilitation works and vehicular traffic on the roads
generate dust. This has effects on the labour force and adversely impacts the photosynthetic
function of vegetation. The multiplication of borrow pits, sometimes found littered all over
the rural areas can contribute to land degradation, trap water and create health problems
associated with stagnant water bodies. Issues may also arise from the use of diesel-operated
power generators to run the various agro-processing and storage facilities ranging from fuel
storage and handling to smoke emission and noise generation.
4.7.5 Mitigating measures. Appropriate mitigation measures to address the above-cited
potential impacts will include clearing only required areas, compensatory tree planting,
avoiding steep gradients, providing drainage, providing interception gutters and infiltration
pits to capture silt and pollutants, training work force in safety measures, watering of road
34
surface and no operations at night, advance warning for all the affected, re-instatement after
use by landscaping, enforcing speed limits. Proper planning and the provision of appropriate
drainage structures at regular intervals and raising the carriageway slightly above the existing
ground level will mitigate most of the adverse effects. Mitigating measures will also include
the controlled use of chemicals in storage facilities, limiting site preparation to dry season,
with no clearing of highly erosive areas. As the project will lay emphasis on sensitization and
training on quality requirements for the export market, it is envisaged that most farmers will
comply with the recommendations, which will help prevent chemicals from polluting water
bodies and soil, and limit the occurrence of health problems.
4.7.6 Environmental Monitoring. The Ghana Environment Protection Agency (EPA) will
be responsible for supervising the ESMP implementation. EPA will assist with evaluating
and monitoring of the residual impacts throughout project implementation. The Executing
Agency of the project will ensure that all identified problems are addressed and mitigating
measures included in the implementation schedule. International and national safety
standards will be applied to the agrochemical procurement process. Through compliance
monitoring, EPA shall ensure that the environmental mitigation measures are implemented,
and mechanisms put in place in order to monitor the long-term ecological effects of the
project. A budgetary allocation has been made for that purpose.
4.8
Project Costs
4.8.1. The total cost of the project, excluding taxes and duties, including physical and price
contingencies, is estimated at UA18.84 million (equivalent to Cedis 264,942 million as at the
February 2005 exchange rate). The foreign exchange portion is estimated at UA14.03 million
representing 74% of the total project cost. The local costs of the project are estimated at
UA4.81 million, which is equivalent to 26% of the total cost. A local inflation rate of 12%
has been considered. A summary of costs by component and by category of expenditure is
provided in tables 4.1 and 4.2 below.
4.8.2 Project cost estimates are based on the prevailing prices in Ghana in February 2005.
Unit rates for locally procured goods, services, and for civil works are also based on
prevailing rates in February 2005. Similarly, unit rates for civil works are based on ongoing
similar works in the country in February 2005. The exchange rates used on imported goods
and services were those of February 2005.
Table 4.1: Summary of Project Cost Estimates by Component
Components
(A) Production & Productivity Enhancement
(B) Export Marketing Promotion &
Infrastructure Improvement
(C) Capacity Building
(D) Project Coordination & Management
Base cost
Physical contingency
Price contingency
Total project cost
Million Cedis
LC
F.E.
9,985
30,581
Total
Million UA
%
L.C F.E. Total F.E.
40,566
0.71
2.17
2.88
75
21,712 111,610 133,322
3,634 18,298 21,932
16,685
3,952 20,637
52,016 164,441 216,457
6,233 13,160 19,393
9,351 19,741 29,092
67,600 197,342 264,942
1.54
0.26
1.19
3.70
0.44
0.67
4.81
7.94
1.30
0.28
11.69
0.94
1.40
14.03
9.48
1.56
1.47
15.39
1.38
2.07
18.84
84
83
19
76
68
68
74
35
Table 4.2: Summary of the Project Cost by Category of Expenditure
Categories
Million Cedis
L.C.
F.E.
1. Works
2. Goods
2.1 Equipment
2.2 Vehicles
3. Services
3.1 Training and sensitization
3.2 Technical assistance
3.3 Studies/Audit/Research
4. Personnel
5. Operating expenses
Base cost of the project
Physical contingency
Price contingency
Total project cost
4.9
Million UA
L.C.
Total
F.E.
Total
%
F.E.
20,415
93,359
113,774
1.45
6.64
8.09
82
495
995
3,139
222
1,770
20,415
22,934
2,046
52,016
6,233
9,351
8,554
8,963
13,666
18,613
12,389
93,359
0
8,897
164,441
13,160
19,741
9,049
9,958
16,805
18,835
14,159
113,774
22,934
10,943
216,457
19,393
29,092
0.04
0.07
0.22
0.02
0.13
1.45
1.63
0.14
3.70
0.44
0.67
0.61
0.64
0.97
1.32
0.88
6.64
0.00
0.63
11.69
0.94
1.40
0.65
0.71
1.19
1.34
1.01
8.09
1.63
0.77
15.39
1.38
2.07
94
90
82
99
87
82
0
82
76
68
68
67,600
197,342
264,942
4.81
14.03
18.84
74
Sources of Financing and Expenditure Schedule
The project will be financed by the African Development Fund (ADF) and the
Government of Ghana (GoG). The total ADF financing will be UA17.00 million,
representing 90% of the total project costs. The ADF resources will finance UA13.89million
(99% of the foreign exchange costs) and local costs amounting to UA3.11 million (65% of
total local costs) associated with operations and maintenance, and local costs of training and
workshops. The Government contribution will cover salaries of staff in the implementation
unit, vehicles for the project management, as well as operating and maintenance of office
equipment. The financing plan of the project is shown in Table 4.3 and 4.4 below.
Table 4.3: Sources of Finance
Sources
ADF loan
Governments
Total project cost
Million Cedis
L.C.
F.E.
Million UA
L.C.
Total
F.E.
Total
%
43,695
23,905
195,349
1,993
239,044
25,898
3.11
1.70
13.89
0.14
17.00
1.84
90
10
67,600
197,342
264,942
4.81
14.03
18.84
100
Table 4.4: Expenditure by Category and by Source of Finance (million UA)
Categories
L.C.
ADF
F.E.
Total
L.C.
GoG
F.E.
TOTAL
F.E.
Total
Total L.C.
1. Works
2. Goods
2.1 Equipment
2.2 Vehicles
3. Services
3.1Training / Sensitization
3.2 Technical assistance
3.3 Studies/Audit/Research
4. Personnel
5. Operating expenses
1.45
6.64
8.09
0.00
0.00
0.00
1.45
6.64
8.09
0.04
0.07
0.61
0.53
0.65
0.60
0.00
0.00
0.00
0.11
0.00
0.11
0.04
0.07
0.61
0.64
0.65
0.71
0.22
0.02
0.13
0.00
0.07
0.97
1.32
0.88
0.00
0.63
1.19
1.34
1.01
0.00
0.70
0.00
0.00
0.00
1.63
0.07
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.63
0.07
0.22
0.02
0.13
1.63
0.14
0.97
1.32
0.88
0.00
0.63
1.19
1.34
1.01
1.63
0.77
Base cost of the project
2.00
11.58
13.58
1.70
0.11
1.81
3.70
11.69
15.39
0.44
0.67
0.93
1.38
1.37
2.05
0.00
0.00
0.01
0.02
0.01
0.02
0.44
0.67
0.94
1.40
1.38
2.07
3.11
13.89
17.00
1.70
0.14
1.84
4.81
14.03
18.84
Physical contingency
Price contingency
Total project cost
36
Table 4.5: Expenditure Schedule by Component (in million UA)
Components
(A) Production & Productivity Enhancement
(B) Export Marketing Promotion & Infrastructure
Improvement
(C) Capacity Building
(D) Project Coordination & Management
Total
2006
0.19
2007
1.56
2008
0.75
2009
0.70
2010
0.66
Total
3.86
1.18
0.08
0.23
1.68
3.19
0.78
0.35
5.88
2.42
0.37
0.37
3.91
2.35
0.37
0.31
3.73
2.30
0.37
0.31
3.64
11.44
1.60
1.57
18.84
Table 4.6: Expenditure Schedule by Source of Finance (in million UA)
Sources of finance
ADF Loan
Government
Total
2006
1.48
0.20
1.68
5.
PROJECT IMPLEMENTATION
5.1
Executing Agency
2007
5.60
0.28
5.88
2008
3.47
0.44
3.91
2009
3.28
0.45
3.73
2010
3.17
0.47
3.64
Total
17.00
1.84
18.84
The Ministry of Food and Agriculture, which is mandated to provide agriculture
services will be the Executing Agency. The Coordinator for AgSSIP (a programme under
MOFA) will be responsible for the day-to-day overall management, and co-ordination of
project activities, including accounting, procurement and monitoring of progress and
achievements of set targets. The Coordinator will work with the existing team of three
technical specialists, an M&E specialist, two existing AgSSIP procurement specialists and
two existing AgSSIP accountants, making up the Project Coordination and Management Unit
(PCMU). The technical specialists are currently implementing the World Bank-financed HEII
project, which is scheduled to be completed in September 2006. The specialists were
seconded to the HEII project by the Government. When implementation of the Export
Marketing and Quality Awareness project commences, the GoG will officially assign the
staff to the PCMU; this will be a condition of the loan. The GoG will assign a Monitoring and
Evaluation officer to the current HEII technical team, for efficient coordination with the
Monitoring and Evaluation Unit of the Programme Planning, Monitoring and Evaluation
Directorate (PPMED).
5.2
Institutional Arrangements
5.2.1 Project Steering Committee: A Steering Committee with 13 members has been
established to oversee and guide the implementation of the HEII project and comprises one
each from: (1) Ministry of Food and Agriculture (MOFA), Chief Directorate; (2) Federation
of Associations of Ghanaian Exporters (FAGE); (3) Directorate of Crop Services, MOFA; (4)
Agricultural Services Sub- Sector Investment Program, MOFA; (5) GABRHO Farms
Limited; (6) Sea freight and Pineapple Exporters of Ghana (SPEG); (7) VEAPEG; (8) Ghana
Exports Promotion Council (GEPC); (9) Phoenix Tropical Exports Limited; (10) Athena
Foods Limited; (11) Ghana Ports and Harbours Authority (GPHA); (12) Private Food Safety
Practitioner; and (13) Ghana Civil Aviation Authority (GCAA). The project will utilize the
services of this committee, chaired by the Minister of Food and Agriculture or his
representative. The AgSSIP Coordinator will provide secretariat services to the committee for
the Export Marketing and Quality Awareness project.
37
5.2.2 Additional members representing stakeholders in the horticulture export and cassava
industries will be appointed, so that the following members will be represented: The first 8
members on the list above plus one each from MOFA (research, extension), MOTI, GSB,
MOFEP, MOPS–PSI, Ministry of Roads and Transport, the private sector (ACFA), a
representative of NGOs. The Fund will require evidence from the Government of Ghana that
these representatives are currently members or have been appointed to the Steering
Committee. The Government will also provide evidence that the Steering Committee has
been given official responsibility to oversee project activities of the current project. The
Steering Committee will approve the Annual Work Programs and Budgets which will be
consolidated by AgSSIP based on inputs from implementing units.
5.2.3 The Steering Committee will meet quarterly, and will be responsible for the overall
direction of the project implementation. The Committee will a) review and approve the
annual work programme submitted by the PCMU; b) discuss and resolve any regional issues
related to the horticultural export and cassava industries in general; c) address any interagency constraints and facilitate project implementation; d) review the regular project
progress reports, including monitoring and evaluation reports, from the PCMU.
5.2.4 Decentralised implementation structure: At the field level, the project implementing
team will work very closely with the RADUs and the DADUs in each of the districts in the
project area. A Senior Monitoring and Evaluation Officer from PPMED will be responsible
for the direct monitoring of project activities within the regions. The management of the
demonstration farms will be by the Ministry of Food and Agriculture (MOFA), under the
Crops Directorate and through their existing decentralized Regional Offices (RADUs). Given
that the farms will be located at existing Government facilities, MOFA will collaborate with
those established management units of the existing facilities. MOFA’s extensive experience
in managing similar facilities will be instrumental in ensuring that they are sustainable. The
Ministry of Health will implement Malaria prevention campaigns, while the HIV/AIDS
Commission will implement the campaign on HIV/AIDS prevention.
5.2.5 The GoG is currently undertaking efforts to strengthen AgSSIP management.
Recognizing that these efforts could take time to finalize under the current project, the GoG
will at least have assigned two additional qualified accountants and two additional
procurement officers, to adequately meet the additional work generated by the Export Market
and Quality Awareness Project and other projects. The additional personnel will be assigned
before implementation of the project starts, and no later than the first quarter of 2006.
5.3
Supervision and Implementation Schedule
The Fund will field supervise the project twice a year, and undertake continuous desk
supervision, review requests for proposals, bidding documents, reports and disbursement. In
addition, the country office which will have been established at the time project
implementation starts, will carry out periodic supervision and will be available to assist the
PCMU staff with procurement and disbursement issues. The presence of Bank staff in the
country will also provide effective coordination with other donors supporting activities in the
horticulture and cassava industries. The PCMU will oversee the implementation of all project
activities including those to be undertaken by consultants and participating institutions. At the
start of the project, an annual work programme and budget shall be submitted to ADF.
Project activities are expected to start in January 2006. During the first year, emphasis will be
on preparing bidding documents for procurement of civil works and goods, as well as making
38
the necessary preparations for sensitisation and training. Details of the implementation
schedule are given in Annex III, while key implementation target dates are set out in Table
5.1 below.
Table 5.1: Key Implementation Target Dates
ITEM ACTIVITY
No.
1
Approval Board of Directors
2
Signature of loan agreement
3
4
5
6
7
8
9
10
11
General procurement Notice
Effectiveness and first disbursement
Launching
Recruitment of TA
Bidding doc. & signing of contracts
Implementation of Project activities
Mid-term review
Audit of project Accounts
Project Completion Report
5.4
ACTION BY
START
DATE
ADF
06/2005
GoG/ADF
07/2005
ADF
08/2005
GoG/ADF
09/2005
ADF/GoG/PCMU
02/2006
ADF/ PCMU
01/2006
PCMU/ADF
01/2006
PCMU/ADF
01/2006
ADF/PCMU/Consultant 06/2008
PCMU/Consultant
12/2006
ADF/GoG/PCMU
06/2010
END
DATE
06/2005
09/2005
10/2005
01/2006
03/2006
09/2006
12/2010
12/2010
12/2008
12/2010
12/2010
Procurement Arrangements
5.4.1 All procurement of goods, works and acquisiti.on of consulting services financed by
the ADF under the project will be in accordance with the Bank’s Rules of Procedure for
Procurement of Goods and Works or, as appropriate, Rules of Procedure for the Use of
Consultants, using the relevant Bank Standard Bidding Documents.
5.4.2 Civil Works: Procurement of civil works comprising of rehabilitation of 407 km of
feeder roads, (estimated at UA8.17 million), construction of farm buildings and lodging
facilities for trainees, and plastic houses at the demonstration farms (UA0.91 million) and
construction of Residual Analysis laboratory, 4 pack houses for preservation and storage of
fruits and vegetables (UA1.01million) will be procured through several small contracts under
National Competitive Bidding procedures. The location and size of the construction works to
be undertaken are such that they are unlikely to attract bids from outside Ghana.
5.4.3
Goods: Procurement of drip irrigation equipment and accessories, farm and training
equipment (seed extractor, fridge, computers and accessories) valued at UA0.73 million,
insulated vehicles, double cabin vans, motorcycles, tractors (UA0.65 million) will be procured
through International Competitive Bidding procedures. The procurement of various types of
equipment for office, valued at UA0.06 million, will be through National Shopping since the
goods to be procured are so diversified that it would be of no commercial interest for a single
supplier to bid for them.
5.4.4 Consultancy Services and Training: Consulting services shall be procured on the
basis of shortlists in accordance with the Bank's "Rules of Procedure for the Use of
Consultants". These will include market studies on cassava starch, fruits/vegetables,
preparation of audio visual programmes, environmental monitoring, socio-economic
monitoring, all estimated at UA0.89 million. Training and workshops would include preproduction practices for farmers/farm workers, extension officers, production practices for
39
farmers/ farm workers, production practices for extension officers, post production practices
for harvesters/graders/sorters/packers, post production practices for traders/exporters/
transporters, training in tissue culture techniques (estimated at UA2.26million). Design and
supervision of civil works valued at UA1.09 million. The selection procedure will be based
on technical quality with price consideration. The activities under HIV/AIDS and malaria
initiative (valued at UA0.20 million) will be carried out directly by MOFA (Gender Unit,
Youth and Health in the Directorate of Agriculture Extension Services) and the Ministry of
Health on the basis of two protocol agreements to be signed with the project. The two organs
are the specialised GOG institutions.
Table 5.2: Procurement Arrangements (Million UA)
Category
ICB
NCB
Other *
SL
NBF
Total
1.Civil Works
1.1 Infrastructure (roads)
8.17 [8.17]
8.17 [8.17]
1.2 Construction of farm
0.91 [0.91]
0.91 [0.91]
buildings and lodging facilities
for trainees, and plastic houses
1.3 construction of Residual
1.01 [1.01]
1.01 [1.01]
Analysis laboratory and pack
houses
2. Goods
2.1 drip irrigation equipment and 0.73 [0.73]
0.73 [0.73]
accessories, farm and training
equipment
2.2 Vehicles
0.65 [0.65]
0.14
0.79 [0.65]
2.3 Office equipment
0.06 [0.06]
0.06 [0.06]
3. Consulting Services
3.1 market studies, audio visual
0.89 [0.89]
0.89 [0.89]
programmes, environmental
monitoring, socio-economic
monitoring
3.2 Training
2.26 [2.26]
2.26 [2.26]
3.3 Design and supervision of
1.09 [1.09]
1.09 [1.09]
civil work
3.4 HIV and Malaria initiative
0.20 [0.20]
0.20 [0.20]
3.5 Annual audit
0.09 [0.09]
0.09 [0.09]
3.6 Mid term review
0.03 [0.03]
0.03 [0.03]
5. Miscellaneous
5.1 Personnel
1.63
1.63 [0]
5.2 Operating expenses
0.91 [0.91]
0.07
0.98 [0.91]
TOTAL
1.38 [1.38] 10.88[10.88] 0.91[0.91] 4.17[4.17] 1.84
18.84 [17.00]
Notes: - The short list applies to the use of consultants only. -*"Other" refers to LIC, international or local
shopping, Direct Purchase or Force account; - The figures in brackets are amounts financed by ADF.
5.4.5 Annual auditing (UA0.09 million), mid-term review (UA0.03 million) will also be
procured based on shortlists, using the selection procedure of technical quality with price
consideration.
5.4.6 National Procedures and Regulation: Ghana’s national procurement laws and
regulations have been reviewed and determined to be acceptable.
40
5.4.7 The Executing Agency: MOFA will be responsible for the procurement of goods,
works, consulting, and training services. MOFA has extensive experience implementing
donor-financed projects included those financed by the Bank Group. The Implementing
Agency is therefore familiar with ADF Rules of Procedure for the Procurement of Goods,
Works and Services. The resources, capacity, expenses and experience of MOFA are
adequate to carry out the procurements. Table 5.2 above gives a summary of the procurement
arrangements under the proposed project.
5.4.8 General Procurement Notice: The text of a General Procurement Notice (GPN) will
be issued for publication in United Nations Development Business, after approval of the
project loan proposal by the ADF Board of Directors.
5.4.9 Review Procedures: The following documents are subject to review and approval by
ADF before promulgation: (a) Specific Procurement Notices; (b) Tender Documents and
Requests for proposal for Consultants; (c) Tender Evaluation Reports or Reports on
Evaluation of Consultants’ Proposals, including recommendations for contract award; (d)
Draft contracts, if these have been amended from the drafts included in the tender documents.
5.5
Disbursement Arrangements
Project funds will be disbursed according to the expenditure schedule by component and
source of finance and by category shown in Tables 4.5 and 4.6. The Government will open an
account in the name of the project for the funds provided by ADF. The contribution of the
Government to the project will also be deposited in a separate account. The opening of the
account will be a loan condition. The ADF funds will be disbursed according to annual work
plans and Budget, which will be approved by the Government and the Fund. Initial request
for disbursement of the special account will be submitted to the Bank for approval and the
amount shall be in accordance with relevant Bank Group Rules of Procedure. The first
disbursement from the ADF account will be made after entry into force of the loan and
fulfilment of conditions precedent to first disbursement on the loan. The disbursement of
subsequent funds will be subject to justification of the utilization of the preceding funds.
Other disbursements under the project will be made in accordance with the procedures in
force. The contribution of the Government to the project costs will be deposited in a special
account on a quarterly basis according to the schedule shown in Table 4.6. The settlement of
expenses relating to services of consultants, contractors and suppliers will be effected by
direct payment in accordance with rules of the Bank.
5.6
Monitoring and Evaluation
5.6.1 Monitoring and Evaluation (M&E) will be an important management tool to
effectively assess progress of project activities, identify critical problems and constraints, and
evaluate new opportunities. Monitoring and Evaluation activities will include a) a baseline
survey; b) on-going monitoring; c) a mid-term evaluation; and d) a project completion report.
A start-up workshop will be organised in order to provide a forum for the beneficiaries to
participate in the project before the start of implementation. The workshop will also
contribute to raising awareness about the project, and provide an opportunity for close
collaboration with the beneficiaries and other stakeholders on project objectives and
modalities of implementation.
41
5.6.2 Project monitoring and evaluation will be the responsibility of the PPMED in MOFA.
This is the Directorate tasked to monitor development interventions in the rural and
agriculture sector and to evaluate their impacts. Monitoring and evaluation will be carried
out in a participatory and gender-sensitive manner. At the start of project implementation,
and building on the indicators presented in the matrix of this document, PPMED will set up
verifiable gender-disaggregated indicators for monitoring project impact on male and female
beneficiaries, and recommend necessary modifications where required to ensure that the
benefits reach the target group, and that the project attains the indicators set out in this
appraisal report. PPMED will be required to provide quarterly reports prior to each of the
Project Steering Committee meetings. The Ministry of Finance will periodically monitor the
overall implementation of the project. A mid-term review of the project’s performance will
be undertaken in the third year, which will form the basis for modifying the project’s
approach, if found necessary.
5.6.3 At the beginning of project implementation and with the use of short-term local
consulting services, a baseline survey will be carried out to verify in detail the situation
analysis in the participating four regions, using best practice participatory methods approach.
The survey will, inter alia, identify key indicators under which the project impact will be
determined and provide data against which specific project activities will be assessed vis-àvis project objectives. Key indicators will include rate of women’s participation in
horticultural crop production and in cassava production.
5.6.4 Project management will prepare quarterly progress reports (according to the Bank
Group format) and annual progress reports indicating physical progress, procurement
activities, expenditures, and evaluating the representation of men and women as beneficiaries
according to the requirements of ADF. Quarterly reports should reach ADF within two
months of the end of the reporting period, while the annual report should be submitted before
the end of March of the following year. A project completion report will be submitted by
MOFA within six months of the end of project implementation.
5.7
Financial Reporting and Auditing
5.7.1 The GoG has passed a new law on procurement which aims to build capacity in
procurement skills from central government to the devolved institutions. The purpose of the
new law is to enhance transparency, cost effectiveness and efficiency. In this regard,
Government is addressing the issue of institutional strengthening, in AgSSIP. An Assistant to
the AgSSIP Coordinator has been appointed and has already commenced work. When these
efforts are completed, AgSSIP will have a Financial Controller and three qualified
accountants. For procurement, professional staff with the necessary academic background
will be trained at Regional and District levels, which will avail AgSSIP projects with
qualified procurement specialists at the headquarters as well as at the devolved institutions, in
line with the decentralized structure of MOFA. Given that these efforts being undertaken by
the GoG, could take time to finalize, under the current project, the GoG will at least have
assigned two additional qualified accountants and two additional procurement officers to
AgSSIP, to meet the additional work, which will be generated by the Export Marketing and
Quality Awareness Project.
5.7.2 Internal Control Mechanism: The PCMU will utilize the established internal control
mechanism at AgSSIP to record, verify and report all transactions to present a true and fair
view of financial records maintained for ADF and Government funds disbursed to the project,
42
which will be submitted to the Fund for review. The PCMU will also prepare and submit
quarterly project financial monitoring reports and annual project financial statements and
arrange for their auditing by a qualified auditor acceptable to the Bank.
5.7.3 Accounting System: The PCMU-AgSSIP Accounting Unit will keep financial and
accounting records in accordance with sound international accounting practices and in line
with internal control mechanism and audit formalities required by the Fund. Quarterly
progress reports will be prepared and sent to the Bank on a quarterly basis, and will include
progress on project implementation, and a financial report.
5.7.4 Flow of Funds: A Special Account in US Dollars will be established and managed by
the PCMU. Replenishment of resources will be made using Bank Rules of Procedure for
Disbursement including direct payment, replenishment to the Special Account on the basis of
Statement of Expenditures and full documentation as required. Government contribution to
the project will be deposited in a separate account in local currency.
5.7.5 Auditing: The project financial statements will be audited once a year under
International Standards by an independent auditor acceptable to the Bank, and under terms of
reference acceptable to the Bank. The audit will cover all sources of funds and expenditures
related to the project. The audit report will be sent to the Bank no later than six months after
year-end.
5.8
Aid Co-ordination
5.8.1 As indicated under institutional arrangements (Section 5.2), the project will be
implemented by the Agriculture Services Sector Investment Programme (AgSSIP). Within
AgSSIP there is an established mechanism for donor co-ordination for all bilateral and
multilateral donor organizations providing support to the agricultural sector. The donor
consultative meetings are held under the auspices of FAO. Joint donors’ co-ordination
committee meetings are held on a quarterly basis, or as and when deemed necessary. The
agencies represented include the AfDB, World Bank, EU, IFAD, USAID, CIDA, DFID,
GTZ, AFD, FAO, and JICA.
5.8.2 During project preparation, the project was discussed in detail with donors, first in
meetings arranged separately with representatives of those donor agencies directly involved
in the horticultural and cassava sub-sector and in the four regions under the project (World
Bank, USAID, JICA), and then at a joint donors’ meeting, and was attended by World Bank,
USAID, DFID, EU, KFW, GTZ, FAO, CIDA, WFP, IFPRI. Consultations with bilateral and
multilateral donors will continue during the implementation of the project, through these
donor consultation meetings. The implementation of project activities will be carried out in
close collaboration with USAID, the World Bank and JICA who are also financing activities
which are complementary with the proposed project.
6.
PROJECT SUSTAINABILITY AND RISKS
6.1
Recurrent Costs
Total recurrent costs under the project are UA2.81 million. The year–by-year
expenditure of ADF and GoG on operating costs is shown in Table 6.1 below. After project
implementation, the government agencies connected with implementing project activities
43
would continue to pursue the same under their existing recurrent expenditures. These
agencies would fund their respective roles in training, feeder road maintenance, research and
extension services to farmers and exporters. Recurrent costs incurred for production,
processing, trial farms, cold chain, transportation and all other expenses pertaining to exports
shall be the responsibility of the private sector beneficiaries.
Table 6.1: Financing of Recurrent Expenses by Source of Finance (million UA)
Sources of finance
ADF
Government
Total recurrent costs
6.2
2006
0.16
0.20
0.36
2007
0.32
0.28
0.60
2008
0.26
0.30
0.56
2009
0.20
0.45
0.65
2010
0.17
0.47
0.64
Total
1.11
1.70
2.81
Project Sustainability
6.2.1 The project has been prepared and designed in a participatory manner. Through the
training programmes under the project, farmers, exporters and community based
organisations will build upon their experience and strengthen their capacity to undertake their
own business activities and decisions. The horticultural crops to be promoted under the
project have been selected on the basis of their adaptability to the agro-climatic zones and
consumer preferences in the domestic and export markets. Cassava is highly adaptable to the
Ayensu area (selected project area) where it has been grown for many decades. The use of
higher quality inputs, better cultural practices, and appropriate technology, will improve soil
fertility and structure, leading to sustained production and productivity in an environmentally
friendly manner.
6.2.2 The crop budgets indicate that income gains from growing the crops with improved
management are substantially higher than traditional practices, which provides adequate
incentives for farmers to adopt the improved varieties. The comparatively favourable farmgate and export prices of horticultural crops and cassava will generate higher marginal
returns. As a result, the high additional incomes, which producers will realise through
increases in the area cropped and productivity per unit area, will provide the necessary
incentive and motivation for the farmers to continue production. The training in basic
business accounting through various project delivered courses will enable them to run
financially viable operations even after the end of project implementation, a further incentive
to the farmers and exporters. For cassava farmers, the ability to sell their high quality produce
at stable prices to a reliable market will ensure continued production, an assertion farmers
themselves indicated during preparation of the project.
6.2.3 Through sensitisation, stakeholders will participate actively in project activities during
which implementation processes and constraints will be discussed and solutions proffered as
an integral part of the problem solving process. This will contribute to fostering the
achievements of the project, thereby engendering a sense of ownership which will enhance
sustainability.
6.2.4 The MD2 multiplication program is based on the request of the Ghanaian pineapple
farmers and exporters, in response to market demands. The producers/exporters see the
switch to MD2 production as the way to maintain their existing market shares and profit
margins, and a way to increase export volumes, which, in turn, should generate enough
revenues to finance their recurrent costs. Also, pineapple being a crop that multiplies
44
vegetatively (through suckers from harvested roots stocks), the investment costs will be
limited to the first acquisition of the mother suckers from the appropriate tissue culture
laboratories. Thereafter, each producer would be able to produce its own supplies of planting
materials, as is the current situation, and even sell the surplus.
6.2.5 The establishment of demonstration farms will provide the industry with an effective
manner of disseminating innovative technology to the farmers and to undertake adaptive
research for the scientist, such as generating a horticulture database, which will provide
growers with crop profiles (type, planting calendars, productivity, yields, pests and diseases
control actions). This process of innovative R&D will develop strong collaboration between
the public and private sectors, which will contribute to the sustainability of the farms. The
demonstration farms will also serve as a focus for awareness campaigns and sensitisation to
new products for diversification and new technological packages, which will enable the
industry to improve its productivity and open new markets. The farms will also establish
sustainable sourcing and development of high quality seeds and planting materials to adapt to
changing market needs. In the process of training, the demonstration farms will produce high
quality fruits and vegetables, which will be exported or sold on the local market. The revenue
from the sale of this produce will generate income for the ongoing operations of the farm.
6.2.6 The Associations (Vegetables Producers and Exporters Association of Ghana
(VEPEAG), the Sea-Freight Pineapple Exporters of Ghana (SPEG), the Association of
Cassava producers in the Ayensu area, and the Federation of Associations of Ghanaian
Exporters (FAGE)) established by producers and exporters of horticultural products and of
cassava have exhibited well managed structures headed by elected leaders. The accounts of
all these associations are audited. They also receive resources directly from external
financiers, in kind or as budgetary support. Capacity building of these institutions will further
lay the foundation for their success and accountability. Their success will also continue to
induce further private investments.
6.2.7 The tractors and temperature-controlled trucks provided to the associations of the
cassava producers, SPEG and VEPEAG, will be used by their members at a fee, which will
be used to run and maintain the fleet. In addition, the associations will be strengthened
through training so that they will be able to manage and maintain their assets, especially
equipment. Based on the experience and the incomes to be generated under the project, the
recurrent operating and maintenance charges will not create an additional burden and hence
the management of these tractors and trucks will be sustained.
6.2.8 The improved feeder road network in the project area will be regularly maintained
through GoG’s established Road Fund, which is financed through fuel levies and donor
contributions. Therefore there will be no additional cost due to the project.
6.3
Critical Risks/Assumptions and Mitigation Measures
6.3.1 It is assumed that the Government of Ghana will continue to promote a conducive
agricultural and economic policies in support of agriculture intensification. To encourage
this, the Bank and other donors will continue to dialogue with the Government.
6.3.2 The primary risk for the project is farmers’ adoption of Good Agricultural Practices
(GAP) in the production of horticultural export crops and cassava and the use of improved
planting materials and seed. This risk will be minimized through mobilization and training of
45
farmers in GAP. Farmer groups and associations will be formed and registered which will
enable the project to effectively follow up their utilisation of the improved planting materials
and seeds.
6.3.3 It is assumed that the growth rate in demand for horticultural crops being promoted
will remain high. As a mitigation measure, the project will actively implement a marketing
strategy, to retain or expand the country’s market share. The strategy will focus on creation of
awareness in international markets that the New Ghana Produce adheres to GAP, residualfree and ethical procedures. The project has provided for funds to recruit an advertising firm
specialized in this area to use international media to advertising and publicize the products.
6.3.4 It is assumed that supply of cassava will be continuous to enable Ayensu Starch
Company to consistently operate at full capacity. As a mitigation measure farmers are being
assisted by the project through their association with high quality, disease-tolerant and high
yielding cassava varieties which will enable them to produce increased amounts of cassava
throughout the year. In addition, the project will finance the development, multiplication and
distribution of new disease-tolerant higher yield cassava varieties to increase the availability
on a continuous basis of improved planting materials for farmers. This will lead to increased
production of cassava with high starch content to meet the demands of the starch company.
6.3.5 The MD2 variety from Ghana will meet the consumer tastes and preferences on the
international market. This variety of pineapples is already grown and exported by Costa Rica
and its demand on the international market is increasing. Since the agronomic practices of
this variety are similar to those already in practice in Ghana for the Smooth Cayenne variety,
it is expected that farmers will not find any difficulty in producing MD2 to meet the
appropriate international quality requirements.
6.3.6 It is assumed that the cost of production for Ghanaian products will remain favourable
and internationally competitive. As a mitigation measure, the project has made provision for
the improvement of feeder roads to reduce transport costs. The project will also provide to the
associations temperature controlled trucks to reduce post harvest handling losses. This will
reduce the average unit cost of production and ensure competitive market prices.
6.3.7 The quality of handling and management services at both the airport and sea ports is
not appropriate to meet requirement in the international market. As a mitigation measure,
government is in the process of liberalization and privatization of these. It is expected that
private sector involvement in the provision of these services will enhance quality. In addition,
the HEII project financed by the World Bank to upgrade the facilities at the airport and Tema
port is already under implementation.
6.3.8 Government road fund will be sufficient to maintain the additional 400km of feeder
roads. The mitigation measure: The selection of the feeder roads to be upgraded were chosen
by the Ministry of Transport and Roads in collaboration with the Crops Services Directorate
and the roads are part of the overall programme for road construction and upgrading, and
eventual maintenance using resources from the road fund. The project continue this
collaborative efforts between the concerned Ministries, to ensure adherence to the planned
programme.
46
7.
PROJECT BENEFITS
7.1
Financial Analysis
7.1.1. Based on the rapid growth in pineapple and papaya exports in the fruits segment and
promising growth opportunities in vegetables segments, increased areas under cultivation are
shown to be used for pineapple, papaya, green chillies, okra and eggplants over a period of 20
years from the date of the start of the project. The project's overall benefits would accrue
from quality improvement in both horticultural crops and cassava, improvements in quality
control, timely issuance of export certificates for horticultural crop exports, and savings in
terms of transportation costs. For quantification purposes, it has been conservatively
assumed that the project benefits would accrue from shifts in produce market destination, i.e.
from shifting more produce from domestic to export markets for horticultural crops and to the
Ayensu factory for cassava. It has further been assumed that the small and medium
participating farmers would have an opportunity to make the market shift as they improve the
quality of their produce.
7.1.2 Although the project's main focus group is the participating farmers and exporters, the
project would benefit all horticultural growers and exporters through the upgrading of market
information and intelligence capacity, improvement in infrastructure facilities like feeder
roads, pack houses, refrigerated vehicles, opening windows for marketing in regional and
European markets, strengthening of quality control and certification facilities and services. It
would also provide the environment where private investors would be encouraged to
undertake further investments. For the cassava industry, the project would raise the quantity
and quality of the produce even for that which is sold on the local market, thereby
encouraging other farmers to invest in similar possessing facilities and hence creating a
market for the small-scale growers. For the farmers, this would expand the reliable market for
their produce.
7.1.3 Farmgate Price: The difference between the CIF and FOB prices is approximately
70-75% which is due to the loading of freight charges (either sea or airfreight). Between the
FOB and farm-gate price the difference is 50% covering margin or commission to traders/
exporters, transportation charges, packing material cost, port handling charges. A major
portion (around 41%) of this 50% is the margin or commission to traders/exporters. These
elements have a direct impact on the pricing of the products and on the outcome of general
trade or business practices prevalent in the export sector. To reduce the incidence of freight
costs in determining cost-competitiveness, the project will increase value, mainly through
high-value processing operations, seedlings and adopting good agricultural practices.
7.1.4 Crop budgets without and with the project were prepared for five selected crops:
pineapple, papaya, okra, eggplants, green chillies. The costs and revenues were estimated per
hectare. Farm-gate prices per kilogram of output have been considered as revenue and all
variable costs, including seed, chemical fertilizers, mulch, irrigation water, and labour were
deducted from the total revenue in the Net Farm Income. Fixed costs were assumed to be: the
depreciation cost of plastic houses, irrigation system, and working capital interest charges.
Incremental value obtained per hectare has been considered for project inflows in the
computation of FIRR and EIRR in financial and economic analysis. Although the significant
potential benefits that farmers could obtain from export of horticultural products compared to
their sale in the local markets is not in doubt, nevertheless the magnitude of these benefits
need to be monitored further during project implementation.
47
7.1.5 Net financial benefits, obtained after deducting investment cost and recurrent costs
from net incremental value obtained from cultivation of selected crops would generate an
FIRR of 25% (see Annex 7)..
7.2
Economic Analysis
7.2.1 The economic benefits of the project will be derived from an increase in exported
volumes, through increased production and reduced number of rejected consignments, as well
as through increase in value per unit volume due to improvement in product quality.
7.2.2 The project is expected to create a conducive environment for small and medium
scale farmers to channel their produce toward more profitable exports in the Regional and
European markets. It would also help large farmers/exporters to consolidate their market
positions by raising sufficient volume from the small farmers and out growers in order to
meet demand requirements, reduce their marketing costs and establish strong client
relationships with buyers in importing countries.
7.2.3
The Economic Internal Rate of Return computation is based on the following
assumptions:
(a) The net benefits accrue to the project over a period of 25 years from the date of the start
of the project.
(b) A conversion factor of 0.88 was used to derive the economic prices from market prices,
(c) Investment costs of the project have been adjusted to economic costs by excluding taxes,
duties and price contingencies.
(d) The investment costs have been computed by considering opportunity costs at 12%.
The EIRR of the project was found to be 24% (see Annex 7).
7.3
Social Impact Analysis
7.3.1 The project will have positive social impact on men, women and youths in the project
area through: i) increased crop production; ii) increased productivity enhancement; iii)
improved export marketing and infrastructure; and iv) capacity building. The sensitisation
and training activities under the Capacity Building component will enhance the awareness
and capability of the project beneficiaries to make better business decisions. In addition, the
HIV/AIDS awareness campaigns and malaria prevention activities are expected to contribute
to improved health of the population. Increased production will create more employment in
the rural and urban areas and lead to increased incomes for smallholder men and women
producers and exporters. All of these improvements will contribute to improved welfare and
reduced poverty.
7.3.2 About 13,502 rural households or 81,012 people living in these households will
directly benefit from the project. An estimated 12,000 people employed at all levels of the
horticultural export industry will be trained over the project life, of whom 4,680 (39%) will
be women, who are predominantly engaged in weeding, spraying, picking, sorting, grading
and packing. Training of women farmers in good agricultural practices will enable them to
increase crop production which will lead to increased incomes of the women farmers in the
project area. The increase in incomes for women will contribute to improved standard of
living for entire households and thereby contributing to poverty reduction.
48
7.3.3 The project will have a significant impact on the collective voice of the community,
as the capacity building of existing groups will contribute to empowering members to take
charge of their development needs. Under the project, men and women will be mobilised and
trained in horticultural and cassava good agricultural practices, as well as in basic accounting
methods. Ghana has long-term experience in group formation for both men and women.
Women groups have been comparatively more successful, and membership does not require a
male guarantor.
7.3.4 In Ghana, women account for 52% of the agricultural labour force and 70% of
agriculture work. They play the leading role in post-harvest activities such as storage,
processing, marketing of horticultural crops. In spite of their importance in the agricultural
labour force, they have limited access to basic resources, especially land. Increased incomes
for women will improve household food security and well-being, as women spend most of
their earnings on their families, especially on their children.
7.3.5 Training of Association elected leaders and administrative staff will avail the
communities with leadership skills which would further foster cooperation around economic
and social activities. This would also contribute to minimising conflict in this area. The
project will, therefore create the capacity for the communities to self-promote rural
development operations. The structures, training and procedures that the project will put in
place should enable the beneficiaries to pursue and develop the activities initiated, as well as
to maintain the infrastructure set up. Therefore, the project will have a positive impact on
rural organization by making farmers more accountable and by developing human resources
in general.
7.3.6 Improved feeder road network in the project area will attract more transporters, which
should result in reduced cost of transportation in these area and will facilitate intercommunity travel and social activities. This will ensure year-round passage in the districts,
and increase trade in various goods and services, among others.
7.4
Sensitivity Analysis
7.4.1 The sensitivity analysis was based on a number of assumptions: (i) increase in the
project cost owing to increase in the costs of infrastructure, equipment and project activities;
(ii) reduction of additional project benefits because of the fall in returns or in product prices;
(iii) occurrence of both of the two assumptions mentioned above, namely reduction of
benefits and increase in costs; and (iv) increase in the maintenance/operating expenses of the
structure and additional expenses of the important speculations used. The results of the
sensitivity analysis are:
•
•
•
•
10 % increase in expenses, EIRR=21.8%;
Fall in return leading to a 10% reduction of the benefits, EIRR=21%;
10 % increase in expenses and 10% fall in earnings, EIRR=20.3%;
Two years slippage on project implementation, EIRR=18.4%.
7.4.2 These sensitivity tests allow concluding that the project remains viable in spite of
increase in expenses. The sensitivity of the EIRR will be reduced by the constant monitoring
of the implementation of all the project activities in order to maintain their expected level of
full production.
49
8.
CONCLUSIONS AND RECOMMENDATIONS
8.1
Conclusions
8.1.1 The project will address the constraints and challenges facing the horticulture export
sub-sector and cassava production in Ayensu. (i) Horticultural crops are high value crops
and the export market exists and continues to grow. As well, international market prices for
these products provide a comfortable profit margin for the producers. During the past ten
years Ghana has demonstrated that it can compete on this very challenging global market.
Thus the technical feasibility of the proposed project activities is already verified. The need
therefore is to invest in infrastructure development, and in human and institutional capacity
building to create a conducive climate for further development of this sub-sector. (ii)
Cassava farmers in the Central Region have been given an opportunity for a ready market for
their produce, at the Ayensu Starch Company. To effectively exploit this opportunity the
project will support farmers in the production of quality high-starch content cassava crop to
sell to the Ayensu factory.
8.1.2 Project activities are expected to contribute to increased incomes of the targeted
growers and exporters. In average income per hectare will increase from Cedis 0.50 to 5.00
million for Chillies growers, and from Cedis 1.3 to 4.40 million for Cassave growers, from
Cedis 11.0 to 31.00 million for Pineapple growers, from Cedis 14.00 to 17.00 million for Egg
plant growers and from Cedis 43 to 59 million for Papaya growers. The increase in incomes
among horticultural producers and exporters, and the consequent improvement in rural living
conditions, will significantly contribute to the reduction of rural poverty among small-scale
producers as well as other operators in the two industries.
8.1.3 Capacity building is mainly focused on human recourse training to ensure
sustainability. In this regard, 80,000 farmers and exporters will be mobilized into groups
and/or associations. By project completion, about 11,120 farmers, exporters, and other related
service officials will be trained out of which 4,700 i.e. 42 percent will be women.
8.1.4 The project is socially desirable, technically feasible, financially viable and
environmentally friendly. Furthermore, it is accorded high priority in the agriculture
development strategy adopted by the Government of Ghana and is consistent with the Bank
Group Vision statement as well as the Bank strategy for Ghana. At the national level, the
project is expected to contribute to the diversification of the country's export base, generate
rural employment and enhance rural incomes.
8.2
Recommendations
It is recommended that a loan not exceeding UA17.0 million, should be granted to the
Government of Ghana for the purpose of implementing the proposed Export Marketing and
Quality Awareness project subject to the following conditions:
(a)
Conditions Precedent to Entry into Force
The entry into force of the Loan Agreement shall be subject to the fulfillment by the
Government of Ghana of the provisions of Section 5.01 of the General Conditions of the
ADF.
50
(b)
Conditions Precedent to First Disbursement
The obligations of the Fund to make the first disbursement of the loan shall be conditional
upon the entry into force of the Loan Agreement and the fulfillment of the Government of
Ghana of the following conditions:
The Borrower shall have provided to the Fund evidence:
i) of opening two special accounts in a commercial bank acceptable to the Fund, one to
receive the proceeds of the loan and the other to receive counterpart funds for the project
(Para. 5.5)
ii) of having assigned the existing HEII PCMU to coordinate and manage the project; and of
having assigned the staff working on the HEII PCMU to work on the Bank project (Para.
5.1).
iii) of having assigned a Monitoring and Evaluation officer, to work closely with the HEII
technical team, who will remain in the Monitoring and Evaluation Unit of PPMED, two
qualified accountants and two procurement officers to AgSSIP (Para. 5.1 and 5.7.1)
iv) of the appointment of an ADF-approved list of additional members to serve on the
existing HEII Project Steering Committee, that will comprise but not be limited to:
representatives of MOFA (research, extension), MOTI, GSB, MOFEP, PSI, Ministry of
Roads and Transport, VEPEAG, ACFA, and GEPC. (Para. 5.2.2).
(c)
Other Conditions
The Borrower shall provide to the Fund:
i) six months after loan effectiveness, the agreements signed with the Department of Feeder
Roads, UNU-INRA/Botanic Department and AESD/Crops Research Institute, following
the Bank’s approval of the draft agreements, respectively, for the implementation of the
feeder roads, Tissue Culture, and farm demonstrations (Para. 4.5.16 and 4.5.6)
ii) evidence of including the maintenance cost of the feeder roads to be rehabilitated by the
project in the Road Fund Budget on the annual basis (Para 6.2.8)
ANNEX 1
Ghana: Export Marketing and Quality Awareness Project Location
BURK INA FASO
UPPER EAST
UPPER W EST
#W a
#
Te mal e
NORTHERN
TOGO
COTE
D'IVOIR E
VO LTA
BRONG AHAFO
ASHANTI
#
EAS TERN
CENTRAL
WE ST ERN
#
#
0
100
#
GREAT ER
ACCRA
Accra
Cap e C oas t
Seko nd i
200
300 Kilometers
Project Area
VOLTA
#
EASTERN
#
Ola Tafo
#
# Oda
Koforidua
#
Nsawan
# Tema
#
# Swedru Accra
GREATER
#
Winneba
ACCRA
# Cape Coast
CENTRAL
0
50
100
150 Kilometers
This map was provided by the African Development Bank exclusively for use of readers of the report to which it is attached. The names
used and borders shown do not imply on the Bank and its members any judgement concerning the legal status of territory nor any or
acceptance of these borders.
ANNEX II
Implementation Organization Structure
Project Steering Committee:
MOFEP, MOFA, MOTI, Ministry
Roads and Transport, GSB,
EDIF PSI, FAGE, SPEG,
VEPEAG, Cassava Growers
-–
Association,
Representative of
NGOs)
Institutions Partners
Ministry of Food and
Agriculture
AgSSIP Coordination
Unit
CSRI
Ghana Standards
Board
PPMED
Field level
implementation
AYENSU CASSAVA
FARMERS
ASSOCIATION
SPEG - PINEAPPLE
PRODUCERS/
EXPORTERS
VEPEAG -VEGETABLES
PRODUCERS/
EXPORTERS
ANNEX III: Project Implementation Schedule
0
Quarters
PROJECT MAJOR ACTIVITIES
Preparatory Phase for Start-up
0.1 ADF Appraisal Report
0.2 Project Approval by ADF
0.3 General Procurement Notice
0.4 Signature of Protocol of Grant Agreement
0.5 Appointment of PCMU
0.6 Project Effectiveness
0.7 Launching of project activities
Implementation of Project Activities
1.1 Elaboration of draft bidding documents/Shortlist of consultants.
1.2 Procurement of contracts for Civil Works and Goods
1.3 Proc. of Civil Works -Access Roads/Laboratory Building
1.4 Procurement of Civil Works – Model Farms
1.5 Proc. of Goods -Tractors/Trucks/Other equipment
1.6 Civil Works supervision
1.7 Implementation Agreement with Research Instructions
1.8 Recruitment of Consultants by short list
1.9 Training of Extension Workers, Exporters and Farmers
1.10 Adaptive Research Activities on new NTE crops
1.11 Marketing and Markets Development activities
1.12 Multiplication of MD2 pineapple suckers
1.13 HIV/AIDS and Malaria Campaigns
1.14 Supervision missions
1.15 Audit
1.16 Mid-term Review
1.17 Project Completion Report
2005
1
2
2006
3
4
1
2
2007
3
4
1
2
2008
3
4
1
2
2009
3
4
1
2
3
4
1
ANNEX IV
PROVISIONAL LIST OF GOODS AND SERVICES (UA million)
Local Cost
1. Works
Foreign
Exchange
1.45
6.64
Total
2. Goods
2.1 Equipment
2.2 Vehicles
0.04
0.07
0.61
0.53
0.65
0.60
3. Services
3.1Training and sensitization
3.2 Technical assistance
3.3 Studies/Audit/Research Programs
0.22
0.02
0.13
0.97
1.32
0.88
1.19
1.34
1.01
4. Personnel
0.00
0.00
0.00
5. Operating expenses
0.07
0.63
0.70
Base cost of the project
2.00
11.58
13.58
Physical contingency
Price contingency
0.44
0.67
0.93
1.38
1.37
2.05
Total project cost
3.11
13.89
17.00
8.09
ANNEX V
Page 1 of 2
GHANA: LIST OF ONGOING PROJECTS AS AT 31 MARCH 2005
Project
1
2
3
4
5
6
7
8
9
10
11
12
13
1
2
3
4
5
6
7
8
9
10
11
12
1
2
1
2
3
4
5
1
2
RURAL ENTERPRISES PROJECT
FOURTH LINE OF CREDIT TO AGRICULTURAL DEV.
BANK
AFRAM PLAINS DEVELOPMENT STUDY
LIVESTOCK DEVELOPMENT PROJECT
FOOD CROPS DEVELOPMENT PROJECT
CASHEW DEVELOPMENT PROJECT
INLAND VALLEY RICE DEVELOPMENT PROJECT
KPONG IRRIGATION PROJECT
KPONG IRRIGATION PROJECT (GRANT)
SMALL-SCALE IRRIGATION DEVELOPMENT
PROJECT
COMMUNITY FORESTRY MANAGEMENT PROJECT
RURAL FINANCIAL SERVICES PROGRAMME
NERICA DISSEMINATION PROJECT - GHANA
Agriculture
ACHIMOTA-ANYINAM ROAD REHABILITATION
PROJECT
REHABILITATION OF ACHIMOTA-ANYINAM ROAD
REHABILITATION OF ACHIMOTA-ANYINAM ROAD
ROAD INFRASTRUCTURE PROJECT 2003
ROAD INFRASTRUCTURE PROJECT 2003
ROAD INFRASTRUCTURE PROJECT 2003
AKATSI-DZODZE-NOEPE ROAD(AKATSI-AKANU)
THREE ROADS STUDY
TEMA-AFLAO ROAD REHABILITATION PROJECT
ANYINAM-KUMASSI ROAD CONSTRUCTION
ANYIANAM-KUMASI ROAD REHABILITATION
TETTEH QUARSHIE CIRCLE MAMFE ROAD
REHABILITATION
Transport
ACCRA SEWERAGE IMPROVEMENT STUDY
RURAL WATER AND SANITATION PROGRAMME
Public Utilies
SENIOR SEC. SCHOOL SUPPORT PROJECT - III
SENIOR SEC. SCHOOL SUPPORT PROJECT - III
HEALTH SERVICES REHABILITATION III
HEALTH SERVICES REHABILITATION III
POVERTY REDUCTION PROJECT
Social Sector
INSTITUTIONAL SUPPORT TO THE MINISTRY OF
FINANCE
CAP.BUILDING, GOVERNANCE & POVERTY RED.
Multisector
Grand Total
Date
%
Approved Disbursed
Loan Amount
12/12/2002
1.2
7,500,000
07/14/1999
05/03/2000
10/10/2001
12/10/1997
10/31/2000
05/18/2001
09/17/1990
09/17/1990
99.9
46.8
5.4
45.8
16.3
1.3
83.1
78.2
15,000,000
619,395
19,580,000
10,000,000
9,890,000
15,000,000
23,238,142
2,081,578
12/04/1997
07/03/2002
10/11/2000
09/26/2003
34.0
10.5
56.0
0.0
39.4
15,000,000
7,000,000
3,580,000
2,650,000
131,139,115
12/15/1997
12/15/1997
12/15/1997
09/17/2003
09/17/2003
09/17/2003
12/20/2002
10/20/1999
04/17/2002
11/22/1985
09/27/1985
69.0
0.0
0.0
0.0
0.0
0.0
0.0
36.9
0.0
85.8
0.0
10,000,000
7,000,000
0
18,000,000
800,000
3,000,000
12,720,000
1,160,000
14,700,000
23,671,036
6,670,000
12/11/2000
28.4
28.3
62.8
0.0
4.3
0.3
0.0
0.0
0.0
98.3
19.9
25,000,000
122,721,036
950,000
12,800,000
13,750,000
20,000,000
5,000,000
17,640,000
1,000,000
11,000,000
54,640,000
67.0
25.9
42.3
30.5
2,000,000
3,000,000
5,000,000
327,250,151
05/03/2000
09/08/2004
09/24/2003
09/24/2003
10/30/2002
10/30/2002
10/28/1998
11/14/2001
GHANA: LIST OF COMPLETED PROJECTS AS AT 31 MARCH 2005
No.
Project Title
Date Approved
Source
Loan Amount
1
2
3
4
5
6
Cocoa processing factories
Gold Mining Rehabilitation
El-Din Salt Mill LTD
Particle Board Manufacturing
Sheratom Ambassador Rehabilitation
Pulp and Paper Mills
12/18/1979
ADB
8
4/17/1990
ADB
26.74
4/17/1990
ADB
0.66
4/17/1990
ADB
1.08
4/17/1990
ADB
7.96
8/28/1985
ADF
1.07
ANNEX V
Page 2 of 2
GHANA: LIST OF COMPLETED PROJECTS AS AT 31 MARCH 2005
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
50
51
Project
Date Approved
Loan Amount
LINE OF CREDIT TO CAL MERCHANT BANK
ECONOMIC REFORM SUPPORT LOAN II (ERSO II)
TERTIARY EDUCATION REHABILITATION
WOMEN'S COMMUNITY DEVELOPMENT
WOMEN'S COMMUNITY DEVELOPMENT
PRIMARY EDUCATION REHABILITATION PROJECT
GOPDC Oil Palm Expansion Project
SPECIAL PROGRAMME FOR FOOD SECURITY PILOT PROJECT
AGRO-INDUSTRIAL STUDY
POVERTY REDUCTION SUPPORT LOAN
ECONOMIC REFORM SUPPORT LOAN
LINE OF CREDIT (II)
AGRICULTURAL SECTOR REHABILITATION
REHAB.OF AGRICULTURE - TRANSPORT SECTION
SUBRI INDUSTRIAL PLANTATIONS
STUDY OF SMALL-SCALE IRRIGATION PROJECT
COCOA REHABILITATION
COCOA REHABILITATION
STRUCTURAL ADJUST.LOAN FOR PRIVATE SECT.
ROADS STUDY
RAILWAYS PROJECT
MECHANISED RAINFED COTTON PRODUCTION
PALM OIL MILLING FACTORIES
LINE OF CREDIT (I)
KPONG IRRIGATION STUDY
THIRD LINE OF CREDIT TO THE AGRICULT.DEVEL.BANK
LINE OF CREDIT
EXPANSION OF GLASS MANUFACTURING UNIT
INDUSTRIAL SECTOR ADJUSTMENT
MPATABA-ELUBO ROAD CONSTRUCTION
MPATABA-ELUBO ROAD CONSTRUCTION
ACHIMOTA-ANYIMAN ROAD STUDY
ACCRA-TEMA WATER SUPPLY REHABILITATION
ACCRA-TEMA WATER SUPPLY REHABILITATION
ACCRA-TEMA WATER - SEWERAGE FACILITIES
ACCRA-TEMA WATER - SEWERAGE FACILITIES
ACCRA SEWERAGE STUDY (GRANT)
BRONG AHAFO ELECTRICITY NETWORK
INTERCONNEXION PROJECT
TELECOMMUNICATIONS NETWORK
HOSPITAL REHABILITATION STUDIES
HEALTH SERVICES REHABILITATION I
HEALTH SERVICE REHABILITATION (GRANT)
HEALTH SERVICES REHABILITATION II
NASIA RICE DEVELOPMENT
NASIA RICE DEVELOPMENT
BONSA TYRE REHABILITATION
PARTICLE BOARD MANUFACTURING
07/10/2002
03/29/2001
06/18/1991
06/18/1991
06/18/1991
01/09/1997
12/12/2002
05/17/2000
09/09/1998
10/22/2003
11/12/1998
12/13/1984
06/26/1987
12/16/1983
11/15/1984
05/25/1992
04/25/1988
04/25/1988
11/25/1991
08/31/1993
04/28/1981
08/20/1975
03/31/1976
05/21/1980
12/16/1983
11/24/1993
11/13/1984
01/17/1975
05/27/1988
01/25/1978
01/25/1978
08/24/1992
10/18/1988
10/18/1988
05/08/1974
04/06/1977
10/29/1990
06/17/1986
08/22/1978
10/21/1977
09/27/1985
01/16/1990
01/16/1990
12/16/1991
09/17/1973
12/21/1976
12/14/1988
07/15/1993
5,000,000.00
38,584,142.82
12,776,664.78
1,388,150.99
446,628.53
12,000,000.00
7,140,000.00
709,902.79
701,977.93
34,580,000.00
13,180,075.67
13,791,520.09
18,605,250.40
28,092,085.97
14,112,792.52
1,778,584.83
17,599,560.82
6,620,510.78
18,421,040.00
427,143.98
10,000,000.00
1,830,101.11
1,827,911.00
7,364,842.81
1,470,180.60
22,994,736.69
17,815,406.66
4,989,707.63
49,999,999.99
3,524,098.40
2,269,559.07
564,120.70
16,450,000.00
6,343,886.87
4,000,000.00
2,266,550.98
690,211.88
24,344,460.80
6,239,999.27
4,909,447.41
1,723,323.37
12,527,817.77
300,590.03
12,146,927.34
2,300,000.00
878,446.18
20,299,328.78
1,516,875.18
487,544,563.42
ANNEX VI
Page 1 of 2
ENVIRONMENTAL AND SOCIAL MANAGEMENT SUMMARY
Brief Description of the Project
The project will be implemented over five years in four regions and has four components, (i) Production
and Productivity Enhancement which envisages establishing demonstration farms and increasing
volume of MD2 pineapple suckers and quality seeds of other horticultural crops available to farmers;
(ii) Export Marketing Promotion and Infrastructure Improvement which establishes a living database on
market information and consumer preferences, a cold chain in each of the four regions under the project
and a 407km of year-round accessible feeder road network; (iii) Capacity Building; and (iv) Project
Coordination and Management.
Major environmental and social impacts
Possible environmental impacts that may result from implementation of project activities are in the
agricultural domain when farmers do not comply with recommended levels of agro-chemicals, which
could lead to water pollution. Soil compaction that reduces rainfall infiltration and increases run-off can
be triggered by frequent use of tractors in the land preparation. Impacts from the rehabilitation of
feeder roads can also be noticeable with the potentiality of prompting disturbances in local hydrology
and drainage patterns, and natural habitats. Other environmental impacts arising from the feeder roads
rehabilitation are road side drains and borrow pits, silting in rivers from road wash-off. When the roads
are rehabilitated, vehicular traffic and speed will increase, generating more accidents, dust and noise
that will adversely affect humans, animals and vegetation. It has been noticed that most rural roads are
not sealed and are therefore exposed to the elements making them prone to erosion particularly in areas
of heavy rainfall and poor drainage. Erosion affects the main carriageway and the drains especially at
steep sections where it creates deep gullies. The combined effects of gully erosion and localized
ponding render most feeder roads unmotorable during rainy seasons
The rehabilitation works involving excavation will create borrow pits that can be found littered all over
the rural areas and contribute to land degradation. Borrow pits can trap water and create health
problems associated with stagnant water bodies. They also have the potential of disrupting natural
drainage patterns. Road alignment which interferes with flow paths can cause flooding of adjacent areas
by blocking the flow and by increasing run-off.
Issues may also arise from the use of diesel operated power generators to run the various agroprocessing and storage facilities ranging from fuel storage and handling, smoke emission and noise
generation. Improving existing rural roads in the rural communities encourage over-speeding, abuse by
trucks with excessive axle load. Public health and safety are worsened through accidents and dust
generation. Opening up rural areas could be both beneficial (retaining the youth, access to vital social
amenities) and detrimental (influx of people and pressure on limited resources).
Mitigation and Enhancement program
To address the impacts mentioned, the ESMP has laid out several measures of mitigation.
Within the capacity building component, it is recommended that farmers be trained in proper irrigation
scheduling and operation planning to ensure a more efficient use of water. With the risk of water
pollution resulting from possible misuse of agro-chemicals, the ESMP recommends that safe drinking
water facilities be provided to farmers. A need assessment has been conducted
during the ESMP, and has helped to determine the adequacy of water supply facilities, specific
prevention, prophylactic and treatment measures. Proper canal maintenance through weeding and lining
should help avoid vector breeding and conveyance to plots. Other mitigating measures include:
reinforcement of health centers; latrines; advocacy and awareness campaigns, etc.
ANNEX VI
Page 2 of 2
For the feeder roads rehabilitation, appropriate mitigation measures envisaged to address the potential
impacts include clearing only required area, compensatory tree planting, avoiding steep gradients and
banks, providing drainage, providing interception gutters and infiltration pits to capture silt and
pollutants, training work force in safety measures, watering of road surface and no operations at night,
advance warning for all the affected, re-instatement after use by landscaping, enforcing speed limits.
Proper planning and the provision of appropriate drainage structures at regular intervals and raising the
carriageway slightly above the existing ground level will mitigate any adverse effects.
For other project activities, mitigating measures include the controlled use of chemicals in storage
facilities, the limitation of site preparation to dry season, with no clearing of highly erosive areas.
Monitoring program and complementary initiatives
A site-specific survey will be conducted before the commencement of project activities in order to
determine environmental mitigation / enhancement measures which should be integrated with project
design and implemented under the ESMP. Among other outputs, the survey will prepare a matrix of the
potential environmental and social impacts of the project with their corresponding mitigation measures,
the associated costs and time frame for effectively carrying out the mitigating measures. Special
attention must be given to those beneficial impacts that can be enhanced to improve the project’s
environmental and social performance.
To ensure compliance with national environmental and social policies and standards as well as with the
Bank’s policies and guidelines, the Monitoring Program of the ESMP includes both surveillance and
monitoring activities, as well as indicators to be used to assess efficiency of the mitigation and
enhancement measures during project implementation. Moreover, the implementation schedule shall be
developed in co-ordination with the overall project implementation plan.
Institutional arrangements and capacity building requirements
The Ghana Environment Protection Agency (EPA) will be responsible for supervising the ESMP
implementation. They will facilitate a consultative workshop that will serve as a forum for consensus on
the objectives and institutional arrangements for implementing the ESMP. Before the commencement
of project activities, an agreement will be signed between PCMU and EPA to carry out the supervision
of the site-specific survey aimed at facilitating the ESMP implementation.
Public consultations and disclosure requirements
The project is designed to operate in a participatory approach where all activities will be implemented
in close collaboration with local communities to increase their sense of ownership of the new
techniques to be introduced under the project.
Estimated costs
Environmental Monitoring and Supervision by EPA
Implementation of mitigation measures
Total:
- UA 30,000
- UA 45,000
- UA 75,000
Implementation schedule and reporting
Reports on monitoring activities done by the EPA will be provided to the Project Steering Committee
(PSC), the Bank, and will also be available to the public. Moreover, copies will be presented to NGOs
and other interested groups.
ANNEX VII
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
ECONOMIC INTERNAL RATE OF RETURN (figures in UA)
COSTS
BENEFITS
Investment Operating
Cost
Cost
2,884,000
9,481,000
1,559,000
1,467,000
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
760,100
Total
Incremental Net Incremental
Costs
Income
Income
2,884,000
0
-2,884,000
9,481,000
1,848,057
-7,632,943
1,559,000
2,477,913
918,913
1,467,000
3,146,991
1,679,991
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
760,100
4,296,878
3,536,778
EIRR
23.8225
ANNEX VIII
2000
Pineapples
EVOLUTION OF HORTICULTURAL PRODUCTS EXPORTS (Period 2000-2004)
2002
2003
2004 (*)
%Change
Volume
Value
Price
Volume
Value
Price
Volume
Value
Price
Volume
Value
Price
Volume
Value
Price
2004/2000
(Mt)
(000USD)
(USD/Mt)
(Mt)
(000USD)
(USD/Mt)
(Mt)
(000USD)
(USD/Mt)
(Mt)
(000USD)
(USD/Mt)
(Mt)
(000USD)
(USD/Mt)
Volume
28,512
11,853
416
35,174
13,316
379
46,391
15,520
335
45,145
14,378
318
71,858
22,090
307
n/d
n/d
n/d
n/d
n/d
n/d
n/d
n/d
n/d
n/d
n/d
n/d
3,582
20,539
5,734
12,463
7,172
575
14,410
7,786
540
13,025
8,248
633
7,974
4,442
557
16,169
8,400
58
15
259
46
12
261
362
58
160
17,884
3,365
188
16,868
3,438
Fresh Fruit cuts
Yams
2001
Onions/Shallots
Other vegetables
%Share
2004
Value
Value
152
86
36
n/d
n/d
34
520
30
17
14
204
28983
22820
6
n/d
n/d
n/d
n/d
n/d
n/d
n/d
n/d
n/d
n/d
n/d
n/d
3,933
1,998
508
n/d
n/d
3
Papaya
1,747
1,361
779
1,792
993
554
1,474
864
586
1,916
737
385
3,752
1,267
338
115
-7
2
Tinda
1,126
474
421
1,256
532
424
1,137
587
516
1,135
636
560
n/d
n/d
560
1(**)
34(**)
n/d
326
130
399
248
92
371
328
154
470
795
514
647
n/d
n/d
647
144(**)
295(**)
n/d
Aubergines
1,080
434
402
1,295
519
401
1,512
455
301
1,867
522
280
698
260
372
-35
-40
0
Banana
3,882
3,695
952
3,251
3,189
981
3,233
3,250
1,005
364
227
624
725
209
288
-81
-94
0
Marrow
Mangoes
268
118
440
232
78
336
126
70
556
234
108
462
376
164
436
40
39
0
Pepper/Chillies
2,819
1,255
445
5,281
1,938
367
4,688
1,782
380
4,674
1,822
390
282
107
379
-90
-91
0
Oranges(fresh)
1,242
249
200
1,336
126
94
15,213
672
44
4,307
329
76
742
94
127
-40
-62
0
Fresh Okra
64
45
703
67
22
328
65
21
323
136
62
456
n/d
n/d
456
113(**)
38(**)
n/d
Tomatoes
2,033
446
219
4,539
757
167
4,961
1,096
221
4,369
427
98
607
56
92
-70
-87
0
Berries
267
59
221
353
44
125
445
58
130
1,141
159
139
644
54
84
141
-8
0
Flowers
55
114
2,073
53
53
1,000
13
15
1,154
78
68
872
8
10
1,250
-85
-91
0
Other
TOTAL
132
47
356
119
35
294
323
59
183
1,014
192
189
9,267
1,586
171
6920
3274
3
58,013
28,082
484
71,565
29,989
419
96,320
33,614
349
98,452
29,219
297
130,310
60,543
465
125
116
100
(*)Provisional data
(**)%Change 2003/2000
(***)%Share 2003
(n/d) No data available
Source: GEPC
Annex
GHANA
EXPORT MARKETING AND QUALITY AWARENESS PROJECT
CORRIGENDUM
Appraisal Report
(1)
Para. 4.5.6, Page 25: The last three lines have been amended to read as follows: “The
PCMU will sign an agreement with the Botany Department of The University of
Ghana and the Crops Research Institute (CRI), to implement the sub-component
on development of tissue culture. CRI will participate in farm demonstration
programmes. ”
(2)
Section 5.1, Page 36: Executing Agency has been amended to read as follows: “ The
Ministry of Food and Agriculture, which is mandated to provide agriculture services will
be the Executing Agency. This project will be under the umbrella of AGSSIP,
Government programme for growth and development strategy, with the
Directorate of Crop Services having the technical oversight of the project. The dayto-day implementation of project activities will be carried out by the existing HEII
management team. The technical specialists, as described in 4.5.30, currently
implementing the World Bank-financed HEII project, scheduled to be completed in
September 2006, will be reassigned to manage the Export Marketing and Quality
Awareness project. ”
(3)
Para 5.4.2, Page 38: Civil Works: line number 6 has been amended to read as follows:
“…National Competitive Bidding procedures, subject to post review for an amount up
to UA 50,000.00…”
(4)
Para 5.4.3, Page 38: Goods: line number 5 has been amended to read as follows:
“…through National Shopping, subject to post review for an amount up to UA
50,000.00…”
(5)
Para 5.4.4, Page 39: has been amended to read as follows: “…..Training and workshops
shall be procured on the basis of short list, which includes …..(Estimated at
UA2.26million). Government procurement procedure will be used for training
logistics…The selection procedure for consulting firms will be based on technical
quality with price consideration….”
(6)
Para.5.4.9, Page 40: Review procedures: The following sentence is added to the end of
the paragraph: “post review process can be used for NCB and NS up to UA 50,000.00.”
(7)
Conditions Precedent to First Disbursement
Condition (b) (iii), Page 50 has been amended to read as follows: “ …….two qualified
accountants and two procurement officers from Agricultural Services Sub-sector
Investment Programme (AgSSIP) to the Project (Para. 5.1 and 5.7.1). ”
Condition (b) (iv), Page 50 has been amended to read as follows: “…..but not be limited
to: representatives of Ministry of Food and Agriculture (Directorate of Extension
2
Services), Crop Research Institute of Counsil for Scientific and Industrial
Research, Ministry of Trade and Industry, Ghana Standard Board, Ministry of Finance
and Economic Planning, Ministry of Private Sector Development and President’s Special
Initiatives, Ministry of Road Transport (Department of Feeder Roads) and Ayensu
Cassava Farmers Association. (Para. 5.2.2)”.
(8)
Other Conditions
Condition (c) (i), Page 50 has been amended to read as follows: “Within six (6) months
of loan effectiveness, two Fund-approved agreements signed with (a) the Department
of Feeder Roads, for the implementation of the feeder roads sub-component, and (b)
the Botany Department of the University of Ghana and Crops Research Institute (a
joint-agreement), for the implementation of tissue Culture sub-component (Para.
4.5.16 and 4.5.6).”
Condition (c) (ii), Page 50 has been amended to read as follows: “Evidence of inclusion
of the maintenance cost of the feeder roads to be improved by the project in the Annual
Road Fund Budget of the relevant year (Para 6.2.8). ”