Technological and Financial Assessment of Small Scale Palm Oil Production in Kwaebibrem District, Ghana

Abstract

A study was carried out in the Kwaebibrim District of the Eastern Region of Ghana to study the production practices and the profitability of palm oil production among small scale processors using focus group discussions, semi-structured interviews and participant observations. Three categories of processing equipment namely digester screw press combined, digester with separate hand operated hydraulic press and digester with separate hand operated screw press were found in the district with the latter constituting about 80% of the processing equipment used by the processors. The major activities involved in the processing of fruits into oil are removal of the fruit containing spikelets from the fresh fruit bunches, fruit loosening and storage, boiling and digestion of fruits and pressing and clarifying of the oil produced. Fruits are usually stored for a period ranging from one to four weeks before processing leading often to high levels of free fatty acids in the oil produced. Due to scarcity of firewood in the district, waste lorry tyres and mesocarp fibres are used in place of firewood generating a lot of smoke with serious health risk to processors and other mill workers and the environment. Constraints in the small scale processing industry include inaccessibility to remunerative market especially during the peak fruit production period of February to May, lack of credit and skills and knowledge in good processing practices. The financial appraisal of palm oil production shows that in the peak fruit production period of April-May, processors make a loss of 38% of every cedi in sale in their operations and that the production of palm oil can be a profitable venture only during the lean fruit production season (from September -December) when oil is relatively scarce. The study suggests that to improve the income of small scale processors, there is the need to help the processors change their practices through research but at the same time it also requires work to create entry into the existing value chains through policy (e.g. bye-laws).

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“…Palm oil processing through small-and medium-sized firms offers viable opportunities for local people, particularly women, to improve their livelihoods and to raise incomes from agricultural production and related enterprises. Ghana produces 232,700 MT of crude palm oil (MASDAR, 2010) annually, which is used for food and other industrial purposes, which originates for about 80% from the small-scale processing sector (Adjei-Nsiah, Sakyi-Dawson, & Kuyper, 2012;Adjei-Nsiah, Zu, et al, 2012). A case study of a medium-scale firm in the eastern region of Ghana (Adjei and Vellema, forthcoming), operating since 30 years, demonstrates a combination of processing and trading palm oil and other related products for the domestic market and (mostly) for the ethnic markets in Europe, where the firm competes with producers from other West African and Asian countries.…”

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“…This prevents them from accessing the huge unsatisfied demand for high-quality oil in the remunerative market that exists both locally and externally. A study by Adjei-Nsiah et al (2012) has shown that processors in Ghana make little or no profit during the peak fruit production season due to lack of remunerative market for the oil. Lack of knowledge about good processing practices and inaccessibility to extension services are partly to be blamed for the poor processing practices by small scale processors.…”

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“…Taiwo et al (2000) also reported that sterilising was done in open drums. Adjei-Nsiah et al (2012) in a study of 90 small-scale processors in the Kwaebibrem district of Ghana also reported that the threshing operation was done manually and that the fruits were sterilised in open drums.…”

“…This could be the reason why only a few horizontal digesters were adopted by the processors in the study area. However, Adjei-Nsiah et al (2012) reported that the digester and the digester screw press were used by 87% and 13% of the small-scale processors, respectively, in the Kwaebibrem District of Ghana.…”

“…High costs of acquisition may also be a reason why these technologies are not in use. Adjei-Nsiah et al (2012) reported that all the processors in the Kwaebibrem district of Ghana used the dry method with 80% using the hand-operated screw press, 13% utilising the hydraulic press, and 7% used the digester screw press. Poku (2002) and Adjei-Nsiah et al (2012) reported that manually operated hydraulic presses were being replaced by the hand-operated screw press in Ghana because the latter was found to be more efficient.…”