ROOTS AND TUBERS IN GHANA:
OVERVIEW AND SELECTED RESEARCH PAPERS II III
Edited by:
Robert Aidoo Department of Agricultural Economics, Agribusiness and Extension, Kwame Nkrumah University of Science and Technology (KNUST), Ghana
Jacob K. Agbenorhevi Department of Food Science and Technology, Kwame Nkrumah University of Science and Technology (KNUST), Ghana
Faustina D. Wireko-Manu Department of Food Science and Technology, Kwame Nkrumah University of Science and Technology (KNUST), Ghana
Arne Wangel National Food Institute, Danish Technical University (DTU), Denmark
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Copyright © 2019 by College of Agriculture & Natural Resources All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the copyright owners Printed in Ghana At KNUST Printing Press KNUST, PMB, Kumasi V
Contents
Acknowledgement...... ix Forward...... vii
ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW...... 1
THEME I:
MARKETING, VALUE CHAINS, ECONOMICS AND EXTENSION ISSUES IN THE GHANAIAN ROOT AND TUBER INDUSTRY...... 23 Structure, Conduct and Performance of the Gari Market in Mampong and Techiman Municipalities in Ghana...... 24 Trust, Governance, Upgrading and Market Power in the Cassava Value Chain of Southern Ghana...... 45 Overview of the Sweetpotato value Chain in Ghana...... 80 Resource-Use-Efficiency in Yam Production in Pru District of the Brong Ahafo Region, Ghana...... 102 Consumers’ Perception and Willingness to Pay for Cassava-Sweet Potato Non- Alcoholic Beverage (Bansu) in the Kumasi Metropolis...... 123 The Effect of Training on Extension Delivery and Performance of Agricultural Extension Agents (AEAs) under RTIP...... 143 An Evaluation of the Cassava Value Chain in Ghana...... 167
THEME II:
FOOD SCIENCE AND TECHNOLOGY RELATED ISSUES IN THE GHANAIAN ROOT AND TUBER INDUSTRY...... 204 Value Addition Interventions along the Root and Tuber Food Supply Chain...... 205 Enhancing the food applications of cocoyam (Xanthosoma sagittifolium): Deductions from a three-year study...... 243 Orange-fleshed sweetpotato composite bread: The nutritional and economic potential...... 268 VI
Shelf life extension and sensory properties of orange-fleshed sweetpotato using pre – and post-harvest techniques...... 284 Protein and Beta-carotene in Maize-Sweet Potato Fermented Composite Flours..... 308 Utilization of cassava peels as feed for ruminants in Ghana: A review of alternative methods of improving their nutritional value...... 332 Product development from Yam in West Africa: market potential and challenges..... 351 The student breakfast foodscape on the campus of Kwame Nkrumah University of Science and Technology, Kumasi, Ghana ...... 373
THEME III:
PRODUCTION, PROCESSING AND MECHANIZATION ISSUES IN THE GHANAIAN ROOT AND TUBER INDUSTRY...... 384 Influence of Fertilizer Application on Postharvest Storage of Whiteyam Tubers...... 385 Biocontrol of Meloidogyne spp. using Arbuscular mycorrhiza in root and tuber cropping systems...... 392 Mechanisation of Cassava (Root and Tuber Crops) Production in Ghana...... 413 Eco-design options for processing gari in Ghana...... 443 VII
Forward
Root and tuber crops (yam, cassava, cocoyam and sweetpotato) provide the greatest opportunity for long-term poverty alleviation and food security in Ghana than any other group of staple foods produced in the country. Markets for these staple food crops are rapidly changing due to new consumption patterns and dynamism in their production and distribution systems. Value chains of these root and tuber crops present opportunities for employment generation and improved livelihoods, especially for women and youth, in Ghana and other producing regions in West Africa. Scientific investigations into various aspects of primary production, marketing, extension, processing, value chains and value addition, as well as consumption of root and tuber crops have been undertaken by different experts at different places across different time horizon. In spite of this, a huge body of scientific knowledge on roots and tubers remains largely unpublished and inaccessible to the scientific community and players in the policy arena. Those research outputs that have been published are also scattered in different journals, institutional libraries and online portals. Currently, there exists no single published book that contains information exclusively focusing on root and tuber research works in Ghana. The DANIDA Root and Tuber Value Chain Project in Ghana (2013-2017) decided to compile and publish this book as its contribution towards bridging this information gap in Ghana. The book provides a broad overview on root and tubers in Ghana and presents specific research papers that focus on primary production, marketing, value chains, extension, processing, value addition and new product development, as well as consumption of different root and tuber crops. With contributions from seasoned researchers and academics from universities and research institutes in Ghana and beyond, this book takes a holistic value chain approach and touches on key aspects of all the roots and tuber crops in Ghana. It is aimed at providing information on the current state of the art as far as root and tuber research in Ghana is concerned. VIII
It is my hope that the contents would serve as inspiration to researchers to identify gaps to inform further research in the root and tuber sector. Also, insights from the papers in this book are expected to inform policy dialogue in Ghana in our effort to strengthen root and tuber value chains for job creation, inclusive growth, food security and sustainable development. Professor Robert C. Abaidoo Director, Office of Grants and Research (OGR), Kwame Nkrumah University of Science and Technology (KNUST), Ghana
Former Provost, College of Agriculture and Natural Resources, Kwame Nkrumah University of Science and Technology (KNUST), Ghana
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AP C W C S ANE NO IX
Acknowledgment
The publication of this book was made possible through the financial support of the Danish Ministry of Foreign Affairs under its three year South Driven Development Research Project funding. In 2012, KNUST was awarded funding through Danida to undertake various research activities aimed at strengthening the root and tuber value chains in Ghana. KNUST partnered with a consortium of three Danish Universities (DTU, AAU and UCN) to undertake various field surveys and capacity building including the training of two PhDs (one in Food Science and one in Agribusiness Management) and five Master of Philosophy students in Agricultural Economics, Food Science and Business Management. The financial support and technical assistance received from Danida and the Danish partners are sincerely acknowledged. The contributions of Professor Arne Wangel (DTU), Nielson Thokild (AAU), Anne Zakaria Lassen (UCN), and Olav Jull Sorenson (AAU) are deeply appreciated. Contributions of KNUST scientists like Professor Ibok Oduro, Professor Robert C. Abaidoo, Dr. Kwasi Ohene-Yankyera and Professor William Otoo Ellis (former Vice Chancellor – under whose tenure the project was won and implemented) are deeply appreciated. Contributors and Editors of all manuscripts published here are very much appreciated for making this book a reality.The support provided by all the research team members and students on the Danida Root and Tuber Value Chain Project as well as all actors in the value chains of the four root and tuber crops who contributed to the success of the project are duly acknowledged.The support services rendered by Mr. Stanley Boakye-Achampong in managing the Danida Root and Tuber Value Chain Project in Ghana, and particularly in compiling the manuscripts for this publication cannot be underestimated. His efforts are greatly appreciated. Finally, the staff of the Office of Provost of College of Agriculture and Natural Resources, including Accounting and Finance Officers, who manged the project resources efficiently are duly commended for their dedication to duty. X 1
ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW
Aidoo, Robert; Boakye-Achampong, Stanley; Wie, Prosper; and Appiah, Boakye Gifty Department of Agricultural Economics, Agribusiness and Extention, Kwame Nkrumah University of Science and Technology (KNUST), Kumasi-Ghana
INTRODUCTION Africa ranks first in the share of the production of roots and tubers in Roots and tubers belong to the class of the world, accounting for about 70.3%, foods that provide energy in the human followed by Asia, America, Oceania diet in the form of carbohydrates. The and Europe which account for 15.2%, terms refer to any growing plant that 10%, 4.3% and 0.3% respectively stores edible material in subterranean (FAOSTAT, 2015).The production of root, corm or tuber. The common root root and tuber crops in Ghana gradually and tuber crops in Ghana are yam, increased from 10.2 Million in 2000 to cassava, cocoyam and sweetpotato. 17.0 Million in 2013 (ibid). The growth Until recently, policy makers and is as a result of expansion in acreages researchers had paid very little attention rather than increase in productivity to these crops, as most of their efforts or yield. According to GSS (2014), were concentrated on cash crops and Ghana’s roots and tubers contribute the more familiar grains (Aidoo, 2009). about 50% of agricultural GDP and are This was so because, root and tuber produced by about 55% of farmers in the crops were previously regarded as food country. The resistance to drought and mainly for the poor. This misconception adaptability to marginal environments lingered for so long because of the initial and poor soils give root and tubers lack of appreciation of the number of a great potential in contributing to people who depended on these crops, household food security. and the number of lives they have saved Figure 1 shows the land area put during famine and periods of natural under different root and tuber crops disasters. production in Ghana from the year 2000 2 ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW
to 2010. Cassava is seen as the root and 2011).According to MOFA (2012) the tuber crop produced on a larger area of average yield levels for all root and land, followed by yam and cocoyam. tuber crops in Ghana are low and well There have been steady increases in the below attainable levels (Figure 3). area of cultivation for all crops over the Current yields are estimated at 28%, years. In terms of annual production 31%, 81% and 19% of the potential measured in metric tonnes, cassava is achievable yields of cassava, yam, again the largest produced root and tuber cocoyam and sweetpotato respectively. crop in Ghana with a yearly production These yield gaps highlight the need of over 10 million Mt (Figure 2). In for primary producers to become more 2008, when disease resistant and high productive and efficient in order to yielding varieties were introduced, the derive full benefits from the root and annual production levels increased to tuber industry. about 14 million metric tonnes (MOFA,
Figure 1: Land area cultivated to main Root and Tuber crops in Ghana (‘000Ha)
Source: MOFA/SRID, 2011. ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW 3
Figure 2: Production of Roots and Tubers in Ghana (2000 to 2010)
Source: MOFA/SRID, 2011. Figure 3: Productivity gap of Roots and tubers
Source: MOFA/SRID, 2012. According to Aidoo (2009), the isolate the various root and tuber crops tendency to treat roots and tubers as as individual food crops for critical undifferentiated commodities has for analysis. This is necessary to ensure that some time now obscured their varying policy recommendations emanating uses and performances. It has also from such studies are targeted at specific hindered analysis of their individual root and tuber commodities instead roles in the global food system, clouded of broad generalizations which hardly understanding of their future prospects, work. and handicapped formulation of Yam appropriate policies to exploit their Yams (Dioscorea spp.) are annual or unrealized potentials. Therefore, it is perennial climbing plants with edible imperative for research scientists to underground tubers. Yam belongs 4 ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW
to the genus Dioscorea (family originated from South East Asia. It is the Dioscoreaceae) and only about half- species most widely spread throughout dozen of the estimated 300-600 the world and in Africa, it is second species available are grown for human to white yam in popularity. The tuber consumption; some are grown for shape is generally cylindrical, but can medicinal purposes. Yams originated in be extremely variable. The tuber flesh the Far East and spread westwards. They is white and “watery” in texture. have since evolved independently in In Ghana, yams are produced in the Eastern and Western Hemispheres, all regions except the Upper East and and today yams are grown widely Greater Accra Regions. Brong-ahafo throughout the tropics. In the West and northern regions are the most African yam zone, which is the principal important yam producing regions in producer on a global scale, white yam the country (Table 1). In West Africa, (D. rotundata), water yam (D. alata), Ghana is second to Nigeria in terms and yellow yam (D. cayenensis) are the of yam production. However, Ghana most common species. White yam (D. is the leading expoter of yams in the rotundata) originated in Africa and is the world. This emphasizes the importance most widely grown and preferred yam of the crop not only for household food species. The tuber is roughly cylindrical security but also in terms of its foreign in shape, the skin is smooth and brown exchange earning potential for the and the flesh usually white and firm. A country. large number of white yam cultivars Yam is a very important food exist with differences in their production commodity in the food basket of and post harvest characteristics. Yellow not only rural households but urban yam (D. cayenensis) derives its common households in Ghana as well. On the name from its yellow flesh, which is average, 12% of the food budget of a caused by the presence of carotenoids. typical urban household in Ghana is It is also native to West Africa and very spent on yam products (Aidoo, 2009). similar to the white yam in appearance. The crop is even more important to Apart from some morphological low income households as they devote differences (the tuber skin is firm and a larger proportion (12-16%) of their less extensively grooved), the yellow food budget to yam compared to high yam has a longer period of vegetation income earners who spend less than and a shorter dormancy period than 10% of their food budget on yam and white yam. Water yam (D. alata) yam products. Yam also constitutes ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW 5
about 13% of the away-from-home from home, yam is an important food food budget of urban dwellers in Ghana. commodity in Ghana. Implying that, whether home or away
Table 1: Yam Production Statistics across all Regions in Ghana Production Figures (MT) Area Cropped (Ha) Regions 2014 2015 2014 2015 Western 94926.86 97774.66 12480.00 12480.00 Central 14769.27 15064.66 2759.80 2759.80 Greater Accra 0.00 0.00 0.00 0.00 Volta 494608.95 519339.40 30591.00 31028.00 Eastern 823191.30 847887.04 40262.00 40700.00 Ashanti 521345.50 536959.32 34038.20 34474.89 Brong Ahafo 2416990.00 2425508.0 140410.00 140847.0 Northern 2169542.88 2235723.0 136131.27 136568.0 Upper East 0.00 0.00 0.00 0.00 Upper West 583515.10 617867.00 31340.00 31340.00 Ghana 7118889.86 7296123.0 428012.27 430197.7
Source: MoFA (2016). Yams store relatively longer in Southeastern Nigeria, the meals offered comparison with other tropical fresh to gods and ancestors consist principally produce, and therefore stored yam of mashed yam. In parts of Igboland in represents stored wealth, which can Southeastern Nigeria, it is customary be sold all-year-round by farmers or for the parents of a bride to offer her marketers. Besides their economic yams for planting as a resource to assist importance, yams also play a significant her in raising a family. According to role in the socio-cultural lives of some Diop (1998), the ritual, ceremony and producing regions like the celebrated superstition often surrounding yam New Yam Festival in West Africa, cultivation and utilization in West Africa a practice that has also extended to is a strong indication of the antiquity overseas where there is a significant of use of this crop. In Nigeria, yam is population of the tribes that observe it considered to be a “man’s property” (Nweke et al, 2012). In some parts of and the traditional ceremonies that still 6 ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW
accompany yam production indicate the just 50mm to more than 1000mm (FAO, high status given to the crop (Nweke 2008). The crop is able to resist many et al, 2012). In Ghana, celebration of plant diseases, drought and locust attack many new yam festivals in major yam and can be harvested at any convenient growing areas like Techiman, Atebubu, time, usually between 8 and 24months Yendi, etc. attest to the socio-cultural after planting depending on the variety. significance of the crop in Ghana. Cassava, therefore, serves as the last option among food crops in Cassava many African countries and provides Cassava is a major staple crop in a protection against unforeseen food Ghana and has almost become a shortages or famine (FAO, 2008; primary food security crop in Africa. Meridian Institute, 2009). However, the It contributes about 22% to Ghana’s choice of late harvesting could mean an agricultural GDP (ISSER, 2005). The opportunity cost of trading high quality total world utilization of cassava is and more starch content of the root for a projected to reach 275 million tonnes much lower quality and starch content. by 2020 (IFPRI, 2008). Cassava is the A major problem with caasava is its most widely produced root and tuber poor storability after harvest; once the crop, cultivated vastly in nearly all cassava root is unearthed, it has roughly the agro-ecological zones of Ghana. a two-day shelf life without treatment This is because the crop can survive on (ibid). poor quality soils within latitudes 30° The production of cassava in north and south of the equator with pH Ghana was estimated at 8.1 million ranging from 4 to 9. It also fares well in tonnes in the year 2000 and 16 .5 million temperatures ranging between 18°C and tonnes in 2014 (Figure 4). 25°C and areas with annual rainfall of ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW 7
Figure 4: Cassava Production series for Ghana
Source: FAOSTAT, 2014.
The production of cassava in Ghana beneficiaries of these developments constitutes nearly 50% of all roots and (Haggblade and Theriault, 2012). tuber production, mainly by farmers Table 2 shows the production of who operate on a small-scale. At this cassava and the proportions that were scale, there is limited chemical and exported in the form of dried chips and mechanical input in the production, starch (quantities in tuber equivalent) harvesting, processing and other post- from 2005 to 2009. Only a small fraction harvest handling activities (MOFA/ of the total production were exported, SRID, 2012). Cassava is produced and the volumes kept declining from by more than 90% of Ghanaian 0.054% in 2005 to 0.0003% in 2009. farmers, either as a main crop or in The exports of cassava chips and starch combination with other crops. The kept declining because there was a increase in the production of cassava, decline in the demand for cassava chips together with the development of low- in Europe which could be ascribed to cost cassava processing technologies, the introduction of price interventions have contributed to the expansion for feed grains in the EU, promoting the of employment opportunities along utilisation of domestic grains (USDA the cassava value chain. Women, GAIN Report, 2012). Also, producers especially those engaged in marketing got better prices for selling cassava and processing, have been the main locally as against exporting chips and 8 ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW
starch that were produced from it. In Export of cassava starch also dropped in 2008 and 2009, exports of dried cassava that year because the presidential special dropped significantly because of the initiative (PSI) processing facility was increased demand for domestic cassava. shut down (FAO, 2012).
Table 2: Production and Export of Cassava in Ghana, MT (2005-2010) Production/Export 2005 2006 2007 2008 2009 2010 Production (‘000MT) 9,567 9,638 10,217.9 11,351.1 12,230.6 13,504.1 A. Exported cassava chips 3,450 5,690 3,592 27 27 - B. Exported qty of starch 1,661 632.5 154 5.5 5.5 -
Exports (A+B) as a % of production 0.053% 0.066% 0.037% 0.0003% 0.0003% -
SOURCE: FAO STAT, 2012. In addition, the export companies of many Ghanaians with an estimated dealt directly with the numerous small annual per capita consumption of 151.4 scale farmers and chip processors by kg (FRI, 2012). It also accounts for up setting up chipping/ buying centers to 40% of daily food intake (kcal per in the producing districts to assemble capita per day), serving as a good source a required volume of chips to export. of carbohydrate. Its leaves are of high Processors complained of lack of nutritional value and can be eaten as a information flow on pricing and mode vegetable. In Ghana, cassava is mainly of payment of their products and used for household consumption; about therefore preferred to sell on the local 85 percent of the production is eaten as market. Of all the products in the cassva food (IITA, 2009) and its consumption value chain, Gari is the highly exported cuts across all ten administrative product and it has been growing annually regions of the country (World Bank, by 23.2% from 2001-2007. It has seen 2010). Due to the bulkiness and high a fair patronage in the EU and other perishable nature of fresh cassava, it is ECOWAS countries but there is still a usually traded in derived or processed firm competition from the ECOWAS forms which also serve as intermediate countries to Ghana’s exports of this products for human diet, animal feed, product (FAO, 2012).Locally, cassava bioethanol production and starch constitutes a major part of the diets markets. ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW 9
Due to the increasing demand industry, cassava is used to produce by the urban populace for high quality glue, veneer adhesives and other binding products of processed cassava and materials. In addition to that, it is used the increased acknowledgement of its to produce eco-friendly and recyclable diverse industrial potential, there is plastics and textiles. Moreover, it is an increase in the commercial use of used in the pharmaceutical industry cassava (Jumah et al., 2006). There to derive glucose and dextrin from exist the demand for cassava in both cassava for syrups. The leaves, peels, food and non-food industries for high dried chips and pellets are also used as quality processed products of cassava at animal feed in the livestock industry different end-user markets. An example (Dziedzoave et al., 2002). The peels are is the high demand for high quality also used as substrate in the production cassava flour (HQCF), where about of mushrooms. 1000 MT was produced in 2011 in Ghana Based on the socio-economic as well as an increased production of significance of cassava, the government industrial grade cassava glue for the ply of Ghana launched a special program wood industry. called the “President’s Special Initiative A larger part of HQCF was (PSI) on Agribusiness” for starch supplied to the food industry and about production and processing for export in one half to the plywood manufacturing August 2001, as a means to transform sector (Kleih et al., 2013). In the food cassava into a major economic growth industry, cassava is processed mainly pole (Kasalu-Coffin et al., 2005). into cassava grits, commonly known as However, the success of the PSI on gari, cassava pellets (kokonte), cassava cassava was very minimal, due to flour, cassava dough (agbelima) and operational and technical challenges. starch. Some of the traditional meals Sweetpotato prepared from cassava are fufu, banku, Sweetpotato holds the position as one of akple, yaka yaka, agbeli kakro, akyeke, the main food security crops in Africa etc. Processing of cassava ranges from due to its resistance to drought, flexible simple boiling, drying and roasting of planting, harvest cycle and tolerance the roots to fermentation of the products of low-quality soils. Due to the crop’s as well as the production of alcohol for versatility and adaptability, it is ranked beverages and extraction of starches as a universal crop and seventh most (Appiah, 2017). important food crop next to wheat, rice, In the paperboard and plywood 10 ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW
maize, potato, barley, and cassava; it is Central, Northern, Upper East, and an important source of carbohydrate, Volta Regions. Figure 5 provides land carotene and vital vitamins (CIP, 2000; area cultivated to sweetpotatoes and FAO, 2002). The consumption of the anual production volumes in Ghana crop is mainly in the fresh form by from 1996-2013. It can be seen from either frying, boiling or roasting. The the figure that much of the increase in vegetative parts (vines) are mostly fed production levels may be as a result of to livestock predominantly in areas such steady increases in the area cultivated. as central Kenya where zero grazing It is also important to note that sweet management systems particularly in potato production levels over the period small scale dairying is well established. are seen to be generally fluctuating. They may also be utilized by young Notwithstanding this general trend, it calves as starter feed and partial milk is worth noting that from 2006-2013, replacer (Orodho et al., 1995).Notable there was a continuous increase in production areas and sweet potato production although a slight decline supply centers in Ghana are Eastern, occurred in 2010. Figure 5: Sweet Potato Production Trend in Ghana
160 Area cultivated(Ha) Production(000MT) 140
120
100
80
60
40
20 Area planted (Ha) and and planted ('000Mt) Area (Ha) Production
0 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Source: Generated from Author’s own computation obtained from FAO Stats, 2015. In Ghana, primary data on sweetpotato survey on regional basis to ascertain the production was very scarce until 2012 levels of sweet potato production in the when MoFA in collaboration with country. Table 3 provides information West Africa Agricultural Productivity on the area cultivated and the production Programme (WAAPP) conducted a levels of sweet potato by region. It may ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW 11
be evident from the table that, bulk the chunk of production. However, the (54.3%) of sweet potato produced in the Eastern region produced the bulk of country comes from the Northern sector sweet potatoes in the southern part of with the Upper East region contributing Ghana. Table 3: Sweet Potato Production in Ghana (2012) Region Area (Ha) % Contribution Production (Mt) % Contribution Central 371 3.9 6,490 4.9 Volta 880 9.1 15,340 11.6 Eastern 1,030 10.7 34,910 26.4 Gt. Accra 38 0.4 640 0.5 Ashanti 37 0.4 620 0.5 Brong Ahafo 145 1.5 2,390 1.8 Northern 414 4.3 6,070 4.6 Upper East 5,550 57.7 46,000 34.9 Upper West 1,157 12 19,530 14.8 Total 9622 100 131990 100
Source: MoFA Field Survey, 2012. The sweet potato value chain in Ghana Cocoyam comprises many actors interlinked by Cocoyam is an herbaceous plant different governance structures which which belongs to the family Araceae expose them to different risks and and is usually cultivated for its edible constraints. Like most agricultural roots, although other parts of the plant, enterprises, sweetpotato production especially its leaves, are used as human and marketing are subject to many risks food. Cocoyam is the universal name emanating from weather, technical and for corm and tuber plants in the Araceae institutional constraints. Addressing or Aroids family. It belongs to either constraints in sweet potato production the genus Colocasia or Xanthosoma as well as in the physical, facilitating and are generally comprised of a large and exchange functions in the spherical corm (swollen underground marketing of the commodity promise storage stem), from which a few large huge improvements in poverty and food leaves emerge (AGRO-HUB, 2013). security status of chain actors (Wie, Even though cocoyam 2016). encompasses different genera 12 ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW
such as Alocasia, Crytospema and cocoyam voluntarily springs up anytime Amorphophallus, the two most secondary forests are cleared because extensively cultivated species in Sub- of the presence of old pieces of corms Saharan Africa are Colocasia esculenta and cormels lying dormant in soils of and Xanthosoma sagittifolium (Onyeka, old and abandoned farms (Acheampong 2014). The leaf blades are large and et al. 2015). Cocoyam cultivation heart-shaped and can reach 50 cm is primarily by cutlass and hoe and (15.8 in) in length. The corm produces cultivars are either sourced from own lateral buds which give rise to tubers farms, gifted to farmers who need it or cormels and suckers or stolons. or purchased from fellow farmers. A Cocoyam commonly reaches in excess major source of planting material for of 1 m (3.3 ft) in height and although planting is from dormant corm setts that they are perennials, they are often sprout voluntarily after a piece of land is grown as annuals, harvested after one cleared for farming (Sagoe, 2006). season (PlantVillage, 2014). Cocoyam ranks fifth in importance In Ghana, there are two common in terms of production of staple crops in varieties of cocoyam; the white and red Ghana. Characteristically, it is cropped or mauve types. The root crop usually for its roots (corms) and leaves at takes between 12 to 18 months before subsistence level by farmers. Therefore, harvesting. Wright (1930) indicates the only the production surplus is supplied root crop was first introduced to Ghana to markets in the urban centres for by missionaries from the West Indies. cash. Onyeka, (2014) noted that during Cocoyam was first planted at Akropong critical periods of crop failure, outbreak Akuapem in the Eastern Region of of devastating pests and diseases to Ghana. The crop gradually spread out main crops, drought, famine, conflict or to other areas within the forest belt. other natural disasters, cocoyam is the Cocoyam was easily established within staple food that farmers and the rural the forest zones of the country mainly folks depend on to mitigate hunger. because of the predominance of cocoa Consequently, cocoyam is the crop that production along the forest belt. many dwellers in the rapidly growing Cocoyam complemented cocoa urban centres consume especially in off- by providing an ideal shade for cocoa season times of plantains (Acheampong seedlings. During the early years of et al. 2014). establishment, cocoyam was cultivated According to Sam and Dapaah after virgin forests were cleared. Now, (2009), cocoyam is an alternative ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW 13
source of carbohydrates for most of the protein. It also contains thiamine, people in West Africa and the Pacific. riboflavin, and niacin as well as Cocoyam corms, cormels and leaves are significant amounts of dietary fiber. eaten after roasting, boiling or baking. Cocoyam also contains higher amounts Meals, sauces and baking flours can of essential minerals like Mg, Ca, K and P also be prepared out of it. It can also than yam, cassava and plantain (Eleazu, be pounded, fried, milled or converted 2013 and Niba, 2003). Cocoyam leaves into other semi-processed end products are also a good source of vitamins A and for stabilizing (Owusu-Darko et al. C and contain about 20 percent protein 2014). Cocoyam is considered the on dry weight basis which is more than most nutritious compared to other root the amount of protein contained in the and tuber crops like yam and cassava. corms. Cocoyam leaves are highly According to Onyeka, (2014) cocoyam recommended for diabetic patients, has nutritional values comparable to the aged, children with allergies and potato. for other persons with gastro-intestinal A lot of nutrients are derived disorders (Plucknett, 1970). Table 4 from the corms, cormels and leaves. provides a summary of the nutritional Owusu-Darko et al. (2014) noted that contents of cocoyam per 100g of edible cocoyam contains 20 to 28 percent portion. starch (carbohydrates) and 1.12 percent 14 ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW
Table 4: Nutritional content of cocoyam per 100g edible portion
Constituent Tannia (Xanthosoma saggittifolium) Major Nutrients Corms Leaves Shoots Calories 133 34 24 Protein (g) 2.0 2.5 0.5 Fat (g) 0.3 1.6 0.2 Carbohydrates (g) 31 5 6 Fibre (g) 1.0 2.1 0.9 Calcium (mg) 20 95 49 Phosphorus (mg) 47 388 25 Iron (mg) 1.0 2.0 0.9 Vitamins -carotene equiv (g) trace 3300 - Thiamine (mg) 0.10 - - Riboflavin (mg) 0.03 - - Niacin (mg) 0.5 - -
Ascorbic acid (mg) 10 37 82
Source: Opara (2003) The starch from cocoyam is readily such as palaver sauce and agushi stew digestible, hence it is used to prepare can be prepared with it. Cocoyam is used baby food (by cutting corms into pieces, as a ready alternative to plantain and boiling and mashing). Owusu-Darko yam in making ‘fufu’ or ‘ampesi’ during et al. (2014) noted that the smaller the off-seasons of yam and plantain. It is starch granules of cocoyam have been also common in Ghana to find cocoyam associated with better digestibility over chips which are deep-fried slices of the other starchy crops. The young fresh corms about 1 mm thick often prepared leaves locally known as ‘kontomire’ and sold as snack (Owusu-Darko et al., are used as vegetables after boiling in 2014). order to remove the acrid flavour (which Cocoyam has other uses aside the causes irritation in the throat or mouth commonly known traditional culinary linings upon ingestion). Local sauces uses. The flour can be used to bake ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW 15
bread and biscuits, prepare soups, producer of cocoyam, producing 3.9 beverages, and puddings. Cocoyam million tonnes (40.5 percent of total starch can be modified into becoming production) in 2013. China, Cameroon an alternative to the other commonly and Ghana follow in order of importance used industrial starches (Lawal, 2004). producing 1.8 million (19.2 percent Subhadhirasakul et al. (2001) reported of total production), 1.6 million (16.1 that cocoyam starch can be used to percent of total production) and 1.3 effectively replace maize as a binding million tonnes (13.1 percent of total agent in the manufacture of tablet drugs. production) of cocoyam respectively Sub-Saharan Africa (SSA), is (FAOSTAT, 2014). In 2014, Africa by far the world’s major producer of accounted for 52 percent of the total cocoyam according to the statistics from taro (cocoyam) production in terms the Food and Agriculture Organization of Gross Production Value (Figure (FAOSTAT, 2014). Onyeka (2014) 6). Africa’s total gross product value indicated that SSA alone accounted for (GPV) has decreased by US$ 412 74 percent of total cocoyam production million while Asia’s has appreciated in the world between 2008 and 2013. by US$ 107 million between 2008 and In 1999, the FAO Database reports 2012. Generally, cocoyam production showed that about 6.6 million tonnes of worldwide has slightly decreased by cocoyam were produced worldwide on 13.4 percent between 2008 and 2014 a total land area of 1.07 million hectares. (FAOSTAT, 2014). Nigeria is the world’s largest
Figure 6: World cocoyam production – Gross Production Value – constant 2004-2006 million US$
Source: FAOSTAT, (2014) 16 ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW
production has subsequently decreased. In 2013, Ghana contributed about 13 In Africa, statistics show that Cameroon percent of the world’s total cocoyam and Nigeria are experiencing gradual production (FAOSTAT, 2014). increase in production as at 2012 even Production in Ghana appeared to though cocoyam production in Nigeria have peaked between 2007 and 2008, severely dropped between 2009 and but that was not sustained for long 2011. Figure 7 depicts the trend of because production started declining cocoyam production for the three till 2013. Onyeka (2014) posits that most important producing countries in this period of sharp decrease coincided Africa. The figure shows that Ghana has with the outbreak of taro leaf blight in been experiencing consistent annual the region. Annual production statistics production fall since 2003 (Figure 8). from MoFA-SRID (2013) reveal that Ghana is currently the fourth national output of cocoyam declined by most important cocoyam producer in about 25.2 percent between 2000 and the world and third in Africa. Available 2013. National production information statistics show that by 1996, Ghana on cocoyam leaves is hardly available was the world’s leading producer of however, since both the corm and leaves cocoyam contributing 1.6 million tonnes are composite products of cocoyam, per annum representing 36.4 percent production decline will also be reflected of world’s total production (Onyeka, in the output and availability of cocoyam 2014). Percentage contribution to world leaves.
Figure 7: Trend of cocoyam production for top three producers in Africa ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW 17
Source: FAOSTAT (2014). The root crop is most suitable in the Ahafo and Western Regions of Ghana forest areas of Ghana hence the bulk of are noted for the production of cocoyam cocoyam is produced along the forest even though other regions like Volta and belt of Ghana. Acheampong et al., Central Regions produce the root crop (2014) stated that cocoyam production on purely subsistence scale (Figure 9). occurs in the southern parts of Ghana The major cocoyam producing regions where there are lots of vegetation cover (Ashanti and Eastern) have experienced and relatively well distributed amounts the hardest decrease in production over of rainfall. Ashanti, Eastern, Brong the past decade. Figure 8: Trend of cocoyam production and area harvested from 2000-2013
Sources: (FAOSTAT, 2014; MoFA – SRID, 2013) 18 ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW
Figure 9: Regional production trend of cocoyam (2000-2011)
Source: (MoFA-SRID, 2013; Acheampong et al. 2014) Cocoyam generates significantvalue per tonne which favourably amounts of foreign exchange for compares with that of yam. Data the country through exports. The from Ghana Export Promotion export market for cocoyam presents Council (GEPC) shows that between itself with a vast potential due to the 2000 and 2013, Ghana exported demand for both corms and leaves 2176.88 metric tonnes of cocoyam largely by West Africans living in worth US$1,170,641.7 (Table 5). the diaspora and the good export ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW 19
Table 5: Export volumes and values for cocoyam in Ghana
Quantity Value (US$) Year Total export value (US$) (metric tonnes) (US$/mt) 2000 117 464.9 54393.3 2001 172 343.0 58996 2002 224 347.3 77795.2 2003 228 364.0 82992 2004 64 562.5 36000 2005 189 507.9 95993.1 2006 243.73 634.3 154597.9 2007 234.04 485.0 113509.4 2008 272.23 776.0 211250.5 2009 241.83 678.9 164178.4 2010 96.84 603.6 58452.62 2011 61.49 832.2 51171.98 2012 32.72 345.7 11311.3
Source: Acheampong et al. (2014); GEPC (2013)
Conclusion is required to unleash the full potential Root and tuber crops will continue to of root and tubers to reduce poverty, play significant roles in the farming malnutrition and hunger in Ghana and systems and food consumption patterns Africa as a whole. in Ghana. However, many production, marketing, processing, financial and logistical constraints have stifled the growth of the root and tuber industry in the country. Introduction of improved technologies along the various nodes of the root and tuber value chains would spur growth in the sector to engender job creation for improved livelihoods of key actors in these value chains. Continuous innovative research focusing on specific root and tuber crops 20 ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW
REFERENCES
Acheampong, P. P., Osei-Adu, J., Amengo, E., Sagoe, R. (2014). Cocoyam value chain and benchmark study in Ghana. A report submitted to West African Agricultural Productivity Project (WAAPP). Project Information Document. pp 7-11 AGRO-HUB (2013). Cocoyam. Accessed from http://agro-hub.com/portfolio-view/ cocoyam/#.VTuM3pPSf_g on 25/04/2015 Aidoo Robert (2009). An Analysis of yam consumption pattern in Ghanaian urban communities, PhD Dissertation submitted to Kwame Nkrumah University of Science and Technology (KNUST), Kumasi-Ghana. Appiah, B. Gifty (2017). Efficiency, Competitiveness and Technology Gaps in the Cassava Value Chain in Ghana, PhD Dissertation submitted to Kwame Nkrumah University of Science and Technology (KNUST), Kumasi-Ghana. Dziedzoave, N. T., Graffham, A. J., Mensah, B. A. and Gyato, M. (2002) ‘Use of Cassava Flour in Paperboard Adhesives’. In: Proceedings of the 12th Symposium of the International Society for Tropical Root Crops (ISTRC), Tsukuba, Japan: http:// www.tiu.ac.jp/~bduell/ISTRC/Symposiums/Japan.00.html Eleazu, C. O., Iroaganachi M., and Eleazu, K. C., Ameliorative Potentials of Cocoyam (Colocasia esculenta L.) and Unripe Plantain (Musa paradisiaca L.) on the Relative Tissue Weights of Streptozotocin-Induced Diabetic Rats. Journal of Diabetes Research. Vol. 2013. Article ID 160964. doi:10.1155/2013/160964 FAOSTAT (2014). Production Statistics Ghana, Cameroon, Nigeria – Taro (cocoyam). Sourced from http://knoema.com/FAOPRDSC2015Feb/production-statistics- crops-crops-processed-february-2015 on 12/09/2015. FAOSTATS (2015). FAO Statistics. Food and Agriculture Organization, Rome, Italy [http:www.apps.fao.org].Orodho et al., 1995) FAO (2002). FAO Statistics.Food and Agriculture Organization, Rome, Italy [http:www. apps.fao.org]. FAO (Food and Agricultural Organisation) (2012). Promoting CARICOM/CARIFORUM Food Security (Phase II) (GTFS/RLA/141/ITA): Evaluation Report. FAO, Rome, Italy. FAO (2008). Value Chain Analysis of Cassava Subsector in Zambia. Part II: Value Chains Analysis Final Report .GTFS/RAF/364/ITA ISSER (Institute of Statistical, Social and Economic Research) (2005): The state of Ghanaian Economy in 2004, ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW 21
University of Ghana, Legon-Accra FAOSTAT (2015). Statistics of the Food and Agricultural Organization: Retrieved on 10th February, 2015. http://faostat.fao.org/site/567/DesktopDefault.aspx FRI (Food and Research Institute) (2012) ‘Gratitude Draft Report on Cassava Value Chain’. GSS (Ghana Statistical Service) (2014): Statistics for Development and Progress: Final Gross Domestic Product for 2012 and Revised GDP for 2013. National Accounts Statistics (GDP 2014): available at www.statsghana.gov.gh Haggblade, S. and Theriault V. (2012) ‘Improving the Inclusiveness of Agricultural Value Chains in West Africa: The Role of Market Segmentation and Emerging Sub-Channels’. http://www.aec.msu.edu/fs2/IFAD-WA/index.htm IITA (International Institute of Tropical Agriculture) (2009): The Root and Tuber System, Medium Term Plan, 2009-2011. www.iita.org Kasalu-Coffin, E., Bedingar, T., Dosso, H. and Diop, E. (2005) ‘Ghana Export Marketing and Quality Awareness Project’. Appraisal Report Kleih, U., Phillips, D., Wordey, M. T., Komlaga, G. (2013) ‘Cassava Market and Value Chain Analysis, Ghana Case Study’. Final Report January 2013. Lawal, O. S. (2004). Composition, physicochemical properties and retrogradation characteristics of native, oxidised and aceteylated and acid-thinned new cocoyam starch. Food Chemistry. 87: 205-218. Meridian Institute (2009) ‘Innovations for Agricultural Value Chains in Africa: Applying Science and Technology to Enhance Cassava, Dairy, and Maize Value Chains’. Cassava Value Chain Overview MOFA/SRID (Ministry of Food and Agriculture/ Statistics, Research and Information Directorate) (2012) ‘Various Statistics compiled by the Statistics, Research, and Information Directorate (SRID) of the Ministry of Food and Agriculture (MOFA)’. Accra, Ghana. MoFA-SRID (2013). Agriculture in Ghana: Facts and Figures 2012. Statistics, Research and Information Directorate. Ministry of Food and Agriculture. Accra, Ghana. MoFA (2013). Crops Subsector (Ashanti Region). Major Crops Produced, Cropped Areas and Performance. Assessed from www.MoFA.gov.gh/site/?page_id=972 on 12/09/2013. MOFA/SRID (Ministry of Food and Agriculture/ Statistics, Research and Information Directorate) (2012) ‘Various Statistics compiled by the Statistics, Research, and Information Directorate (SRID) of the Ministry of Food and Agriculture (MOFA), Accra, Ghana. MOFA (Ministry of Food and Agriculture) (2011) ‘Agriculture in Ghana, Facts and Figures’. Statistics, Research and Information Directorate (SRID), Accra, Ghana. 22 ROOT AND TUBER CROPS IN GHANA - AN OVERVIEW
Niba, L. L. (2003). Processing effects on susceptibility of starch to digestion in some dietary starch sources. International Journal of Food Sciences and Nutrition. 54 (1): 97–109. Nweke F, Okoye B.C and Aidoo R (2013). Yam Consumption Patterns in West Africa; Technical report for Bill and Millender Gates Foundation. Onyeka, J. (2014). Status of Cocoyam (Colocasia esculenta and Xanthosoma spp) in West and Central Africa: Production, household importance and the threat from Leaf Blight. CGIAR Research Program on Roots, Tubers and Bananas (RTB). Opara, L. U. (2003). Edible Aroids: Post-harvest operation. In Post-Harvest Compendium. FAO. Rome. Owusu-Darko, P. G., Paterson, A., & Omenyo, E. L. (2014). Cocoyam (corms and cormels): An underexploited food and feed resource. Journal of Agricultural Chemistry and Environment. 3(1): 22-29. PlantVillage (2014). Cocoyam. https://www.plantvillage.com/en/topics/cocoyam/infos/ diseases_and_pests_description_uses_propagation on 25/04/2015 Plucknett, D. L. (1970). Status and future of the major edible aroid Colocosia, Xanthosoma, Alocasia, Cyrstosperma and Amorphophallus. In Tropical Root Crops Tomorrow: Proceedings of the 2nd International Symposium on Tropical Root Crops, Hawaii, pp 127-35. Sagoe R. (2006). Climate change and root crop production in Ghana. Crops Research Institute, Kumasi. Prepared for Environmental Protection Agency (EPA). Sam, J. & Dapaah, H. (2009). Baseline survey report-West African Agricultural Productivity Programme (WAAPP). Ghana. Subhadhirasakul, S., Yuenyoungsawwad, S., Ketjinda, W., Phadoongsombut, N. & Faroong-Sarng, D. (2001) Study on tablet binding and disintegration properties of alternate starches prepared from taro and sweet potato tubers. Drug Development and Industrial Pharmacy. 27: 81-87. Wie, 2015. Assessment of risks and constraints of actors along the sweet potato value chain in Ghana, MPhil Dissertation, KNUST. Wright, J. (1930).Cocoyam varieties in the Gold Coast. Gold Coast Department of Agriculture (1930): Bulletin No. 23: 198-201. 23
THEME I:
MARKETING, VALUE CHAINS, ECONOMICS AND EXTENSION ISSUES IN THE GHANAIAN ROOT AND TUBER INDUSTRY 24
STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET IN MAMPONG AND TECHIMAN MUNICIPALITIES IN GHANA
Aidoo Robert, James O. Mensah, Appiah Barnie Isaac, Aboagye Ernest Tabbih, Assamoah-Cobbiah George, and Yirenkyi Ahmed Kojo Department of Agricultural Economics, Agribusiness & Extension, Kwame Nkrumah University of Science & Technology (KNUST), Kumasi- Ghana
ABSTRACT of the conduct of actors in the market. This study sought to assess the The study revealed that Gari wholesaling structure, conduct and performance of and retailing are almost perfectly the Gari market in the Mampong and competitive whereas the processing Techiman municipalities. A purposive sector is weak oligopolistic in nature in sampling technique was used to select both municipalities. In terms of conduct, the communities in both municipalities. players in the gari market relied heavily Simple random sampling technique was on the forces of demand and supply to used to select one hundred (100) actors set prices. The Gari business was found in the Gari market in each municipality to be profitable in both municipalities including 40 processors, 40 retailers as it generated positive gross and net and 20 wholesalers and structured marketing margins at all nodes of the questionnaires were employed to elicit market chain. However, net margins primary data for analysis. Descriptive were not equitably distributed among statistics, frequency tables and the key market participants, a situation percentages were used to summarize which could threaten the sustainability the socio-demographic characteristics of the chain, especially in the Mampong of respondents. Gross margins, Net municipality. The study revealed that marketing margins, Concentration ratio, major constraints faced by processors and Herfindahl-Hirschman Index (HHI) were limited access to credit, price were used to examine the structure and performance of the market. Simple fluctuations and low efficiency of narrations were also used in the analysis processing equipment. Among traders, STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET 25
the most pressing constraints were Gari processing and marketing limited access to credit, inconsistent are important economic activities that supply of Gari and high transportation serve as sources of livelihoods for many cost. To ensure consistency and product women in Ghana. A well-functioning traceability, there is the need for Gari market will guarantee regular product differentiation and innovation income and food security for not only through packaging, labelling and value the actors in the chain, but members of addition for niche markets. Formidable their entire households. Income from trader associations are also needed in the business is used to supplement the industry to facilitate linkages and household income to cater for children’s strategic alliances with institutional education and other family needs. A buyers and other stakeholders in the well-performing Gari market will also larger enabling business environment. drive the production of cassava (the main raw material) further and therefore BACKGROUND help secure the livelihoods of farmers in An efficient marketing system is rural communities. essential for developing and also Although Gari is very popular maximizing returns from agricultural and essential among Ghanaians and production. In this regard Abott (1981) some people in the West African has pointed out that an efficient market sub-region, there has not been much acts as bridge between the producer improvement in its marketing system and consumer. It is through the market in Ghana. Issues of poor packaging and that production patterns are changed labelling, less value addition, limited according to the requirements of differentiation, inefficient production customers. Gari, a granular flour of methods which affect the final quality varying texture, is a widely patronized of the product are usually raised by Ghanaian food item that has over the consumers (Mylene and Kirsten, 2001). years served as a good companion to This is likely to affect the performance the citizenry especially students at all of the product on the market in an era levels from the primary schools to the where consumers are very conscious universities particularly those in the and are increasingly diverting to malls, boarding and hostel facilities. This specialty stores and restaurants instead is due to its relative long shelf life of the traditional supermarkets and and affordability compared to other retail shops for quality, variety and traditionally made consumables. value for money. As a result, packaging 26 STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET
of products seems to play a major role Region). Population was all actors in marketing now. Consumers who involved in Gari processing and are now conscious of product safety, marketing in both municipalities. Sample traceability and nutritional value look size was 200, with 100 respondents for proper packaging with product sampled from each district and made up labels; and this is hardly found in the of 40 processors, 20 wholesalers and 40 Gari market in Ghana. Key players in retailers. In the Techiman municipality the value chain are not market-oriented the study focused on Aworowa, and this has led to low productivity and Tuobodom, Akrofuom and Krobo profitability. communities. Kyiremfaso, Mampong, There is little or no coordination Krobo and Woraso were the selected among trading partners and thus most communities visited in the Mampong processors operate in spot markets municipality. These communities were which make them vulnerable to purposively selected because they are powerful market women in a market well known for Gari processing in both characterized by imperfect information districts. From each community, ten flow. Increased gari production, processors of gari were selected through however needs to be accompanied by simple random sampling. Wholesalers efficient marketing system that provides and Retailers were also selected from place, time, form and possession utility the main markets in the districts by to the customer. simple random samling technique. This research, therefore, sought Primary data was collected through to examine the structure, conduct and personal interviews with the use of performance of the gari market to structured questionnaires. Additional provide useful information for future information necessary to supplement policy and strategy formulation towards the primary data was derived from the efficient functioning of the gari market internet, journals and Ministry of Food in Ghana. and Agriculture (MOFA).
METHODOLOGY OF THE DATA ANALYSIS STUDY Characteristics of respondents were Study areas/Sampling/Data Collection summarized and described using Study areas were Mampong descriptive statistics and with the Municipality (Ashanti Region) and help of Statistical Package for Social Techiman Municipality (Brong-Ahafo Scientists (SPSS). The descriptive STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET 27
analysis made use of frequency tables, percentages and arithmetic mean. The Structure-Conduct-Performance (SCP) framework was used in assessing the Where; Gari market structure, conduct and S represents market share of the ith firm performance in Ghana. This study i N represents the total number of firms adopted Concentration Ratio (CR) and for which the index was calculated. Herfindahl – Hirschman Index (HHI) Potential barriers to entry were in analyzing the degree of traders’ investigated based on initial capital, concentration in the market place in technology involved, legal and performing the exchange function. The institutional requirements. Product concentration ratio was estimated using differentiation was investigated based the formula below. on presence or otherwise of product packaging, labelling and customer relation. The market conduct was examined based on information such Where CR= Concentration Ratio, as existence of trader associations, th Si represents market share of i firm availability of price and product n is the number of largest firms in the supply information (and means of market. communication); and pricing strategies Herfindahl-Hirschman Index (HHI) adopted. Narrations were used to was calculated by squaring the market present results relating to these market share of each firm competing in the conduct issues. market, and then summing the resulting Gross margin and Net margin were numbers. used in measuring maket performance. They were calculated mathematically by using the following equations:
Where: TGMi= total gross margin i=actor in the chain
Where, TNM = Net margin i= actor in the chain 28 STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET
Gross and net margins were calculated the general situation in Ghana where based on the number of bags (120kg per trading activities especially in the food bag) of Gari bought and sold monthly sector are predominantly controlled by by wholesalers and retailers in the gari women. business. Marketing costs included Among the Processors the transportation cost, labour cost (loading dominant educational level was basic and off-loading), selling expenses, ducation representing 64% followed storage cost, and value of losses, etc. by no formal education (30%) and Simple proportion was used to examine secondary education (5%). Majority of the distribution of costs and margins the wholesalers and retailers had basic among key actors in the gari market. education, represented by 53% and 55% respectively. The overall educational FINDINGS status of respondents was very low. Demographic Characteristics of The relatively low educational status of respondents respondents is not surprising given the Table 1 presents the distribution fact that most agro-industrial processing of respondents by sex, educational activities do not demand higher level of level and marital status. It may be academic qualifications. seen that only 6% of processors were Table 1 also shows that most of males with the remaining 94% being the key players in the gari market were females. Gari trading activities were married; 91% for processors and 90% completely dominated by women since for traders. This means that actors in 100% of traders in both study areas the gari business could rely on family were females. This is a reflection of labour to perform certain activities. STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET 29
TABLE 1 Demographic characteristics of Respondents
PROCESSORS WHOLESALERS GENDER RETAILERS (N=80) (N=80) (N=40)
Variable Frequency % Frequency % Frequency %
SEX
Male 5 6.25 0 0 0 0
Female 75 93.75 40 100 80 100
EDUCATIONAL BACKGROUND
No formal 24 30 16 40 33 41.25 education
Basic 51 63.75 21 52.5 44 55
Secondary 4 5 3 7.5 3 3.75
Tertiary 1 1.25 0 0 0 0
MARITAL STATUS
Married 73 91.25 36 90 72 90
Single 3 3.75 1 2.5 1 1.25
Widowed 2 2.50 3 7.5 7 8.75
Divorced 2 2.50 0 0 0 0
Source: Field survey (2016) Table 2 provides the descriptive municipality with an average processor statistics of respondents. The table being 43years and trader being 41years shows that majority of the key players old. This suggests that most of the were in their forties; average age of respondents were fully active and in processor was 42 years and 40 years for their prime working age. The number traders in Mampong municipality. The of years in business in Mampong for same condition existed in Techiman processors and traders averaged 10.48 30 STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET
and 8.85 years respectively and that of higher quantities of gari than those in Techiman were 11.12 and 11.87 years Mampong since the mean quantities respectively. This indicates that actors produced and handled by Processors in Techiman were more experienced and Traders in Techiman were 6600 kg and skilled in Gari processing than and 9840 kg respectively. Processors their counterparts in Mampong. It is and Traders in Mampong municipality evident from Table 2 that those actors produced an average of 1200 kg and in Techiman produced and handled 3530 kg of gari per month respectively. TABLE 2: Descriptive Statistics of Respondent characteristics
Mampong Techiman Variable Processors Traders Processors Traders Mean Std. Dev. Mean Std. Dev. Mean Std. Dev. Mean Std. Dev. Age (yrs.) 41.90 7.97 40.20 7.65 42.53 8.91 41.27 9.09 Experience (yrs.) 10.48 6.83 8.85 5.56 11.12 8.03 11.87 7.97 Household size 6.65 2.99 6.53 2.15 6.03 2.60 6.27 2.16 Years of formal 5.55 4.10 6.05 3.77 4.73 3.44 5.82 4.10 education Quantity of gari handled monthly 1200 5.46 3530 9.36 6600 21.55 9840 50.75 in Kg Source: Field survey (2016)
Market structure 12, 24, 24 and 24 bags (120kg per bag) From Table 3, the market share ratio of gari per month averagely.The largest showed 35.82% for processors, 49.77% eight wholesalers used in determining for wholesalers and 37.37% for retailers the market ratio produced 24, 34, 32, 24, in the Mampong municipality and the 28, 24, 25 and 30 bags (120kg per bag) Herfindahl-Hirschman Index (HHI) was of gari per month averagely. The largest estimated at 0.03 for processors, 0.05 eight retailers used in determining the for wholesalers and 0.03 for retailers market ratio produced 12, 12, 15, 16, in the same municipality. The largest 16, 11, 14 and 12 bags (120kg per bag) eight processors used in determining of gari per month averagely. All the the market ratio produced 16, 12, 20, 12, respondents share of gari produced STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET 31
per month were used in estimating the the Techiman municipality. All the Herfindahl-Hirschman Index (HHI) for respondents share of gari handled per each actor. month were used in estimating the In the Techiman municipality the Herfindahl-Hirschman Index (HHI) concentration ratio was therefore found for each actor. The market structure of to be 29.51% for processors, 58.9% for Gari is almost perfectly competitive wholesalers and 41.2% for retailers. for both wholesalers and retailers. The largest eight processors used in However, processing structure is weak determining the market ratio produced oligopolistic in nature. The Gari market 72, 72, 72, 72, 72, 72, 108 and 108 was characterized by many buyers and bags (120kg per bag) of gari per month sellers. The condition of the market is averagely. The largest eight wholesalers free entry and exit with the exception used in determining the market ratio of Techiman market where there was a handled 70, 145, 80, 58, 58, 110, 80 barrier of consulting the market queen and 210 bags (120kg per bag) of gari if a shed was needed for operations. per month averagely. The largest eight There is perfect knowledge, little or no retailers used in determining the market advertisement, product homogeneity, ratio produced 16, 16, 24, 24, 40, 30, no legal and institutional barriers and 35 and 35 bags (120kg per bag) of gari low level of technology employed in per month averagely .The Herfindahl- their operations for both municipalities Hirschman Index (HHI) was calculated which is consistent with the findings of to be 0.03 for processors, 0.07 for Olagunju et al. (2012). wholesalers and 0.03 for retailers in 32 STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET
TABLE 3: Market Concentration Ratio for Gari markets in Techiman and Mampong
MARKET HERFINDAHL- MONTHLY SHARE RATIO HIRSCHMAN INDEX
NUMBER OF (CR8) (HHI) PLAYER BAGS(120kg/ bag)
MAMPONG PROCESSORS 402 35.82 0.03
WHOLESALERS 444 49.77 0.05
RETAILERS 289 37.37 0.05 TECHIMAN PROCESSORS 2196 29.51 0.03
WHOLESALERS 1378 58.9 0.07
RETAILERS 534 41.2 0.03
Source: Field Survey (2016) Market Conduct All the respondents confirmed that during the bumper season from August to prices are set by factors such as demand January, cassava roots are in abundance and supply and cost of acquisition plus increasing the output of processors. margin which confirms the finding This leads to supply exceeding demand. of (Afolabi, 2009). Demand mostly Prices therefore decrease ranging exceeds supply in the lean season and from GH₵180 to Gh₵220 per 120kg supply exceeds demand in the bumper bag of gari. Gari traders association season. The lean season spans from exists only in the Techiman market February to July. During this time and does not exclude anybody from harvesting of cassava is very tedious selling in the market. The association due to lack of rains. Cassava roots does not interfere in the trading but for become scarce hence low output from welfare purposes. There is low level processors. Demand therefore exceeds of product differentiation in the Gari supply resulting in price increase market except for their fineness and ranging from GH₵250 to GH₵330 per color in the market. The colour of gari 120kg bag of Gari. On the contrary, produced in Techiman is usually yellow STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET 33
mostly preferred by senior high schools, were GH¢800 and 34.78% and a Net prisons service, food vendors, and final Margin estimated at GH¢28.02 and consumers and other customers. Gari in 1.22% respectively in the Mampong Mampong is usually white in colour and municipality. A processor sold an mostly preferred by senior high schools, average of 10bags (120kg per bag) of prison service, final consumers, food Gari every month. This indicates that vendors and other customers. for every GH¢1 invested in processing Most of the respondents activity a gross margin of 34.78% (92.5%) confirmed there is readily and a net margin of 1.22% accrued available information on price in their to processors. The cost price item for market of operation. The respondents processors consists mainly of fresh confirmed that information about raw cassava tubers costing GH¢1500 in material is available through mobile Mampong. A processor handled an communication with farmers and visits average of 10 tricycles (333kg of to farms. cassava roots per tricycle) per month at an average price of GH¢ 150 in Market Performance Mampong municipality. From Table 4 the profitability analysis The major cost items making of the 200 respondents in the study area up the processing costs were water, for the year 2016, indicated that Gari firewood, peeling, grating, milling, processing was generally profitable, roasting and packaging totaling recording both positive gross margins Gh¢771.98 in Mampong. This was and net profits in both municipalities. incurred for processing 3330kg of From Table 4 the average Gross cassava roots per month. Grating and Margin accrued to a processor milling activities were done together in per month in value and percentage a single machine. 34 STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET
TABLE 4 Average monthly costs and returns of processors in Mampong and Techiman
ITEM MAMPONG TECHIMAN Output 10 bags 55 bags Selling price per Unit Gh¢230 Gh¢250 A. Gross revenue Gh¢2300 Gh¢13750 Output 10 tricycles 6 trucks Cost price per Unit Gh¢150 Gh¢1400 B. Variable Cost/Cost of produce Gh¢1500 Gh¢8540 C. Gross Margin (A-B) Gh¢800 Gh¢5210 Gross margin as % of gross Revenue ( 34.78% 37.89% ) Amount Amount Processing costs Gh¢ Gh¢ Water 9 - 30 (25lt gallon)*0.30p Firewood 340.5 823.5 Peeling 136.2 183 Grating, labor and pressing - 152.5 Milling 138.72 366 Roasting 113.52 658.8 Packaging 34.04 164 D. Total processing costs 771.98 2348.5 E. Net Margin(C-D) 28.02 2861.5 Net margin as % of Gross revenue 1.22% 20.81%
Source: field survey (2016) Also, the average Gross Margin that 37.89% respectively in the Techiman accrued to a processor per month in municipality. This indicated that for value and percentage was GH¢5210 and every GH¢1 invested in processing STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET 35
activity a gross margin of 37.89% Techiman. In Techiman municipality, a accrued to processors in Techiman.Net processor handled an average of 6 KIA margin in value and in percentage was trucks (3000kg of cassava roots per estimated at GH¢2861.5 and 20.81% truck) at an average price of GH¢1400. in Techiman. A processor in Techiman The major cost items making up municipality sold an average of 55bags the processing costs were firewood, (120kg per bag) of Gari every month. peeling, grating, milling, roasting and This showed that for every GH ¢ 1 packaging totaling Gh¢2348.50.This invested in processing activity a net incurred for processing 18000kg of margin of 20.81% accrued to processors cassava roots. There was no cost item in Techiman. The cost price item for for water in Techiman since processors processors consists mainly of fresh do not wash the peeled cassava before cassava tubers costing GH¢8540 in grating and milling. 36 STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET
TABLE 5 Average monthly cost and returns of wholesalers in Mampong and Techiman
ITEM MAMPONG TECHIMAN Output 22 bags 69 bags Selling price per Unit Gh¢250 Gh¢270 A. Gross revenue Gh¢5500 Gh¢18630 Output 22 bags 69 bags Cost price per Unit Gh¢230 Gh¢250 B. Variable Cost/Cost of produce Gh¢5060 Gh¢17250 C. Gross Margin (A-B) Gh¢440 Gh¢1380 Gross margin as % of gross 8% 7.41% Revenue =(C/A)*100% Amount Amount Marketing costs Gh¢ Gh¢ Transportation cost 41.75 588.05 Loading and Offloading 15.95 212.2 Market Toll 13.8 139.3 Association dues - 12 D. Total marketing costs 71.45 951.55 E. Net Margin(C-D) 368.55 428.45 Net margin as % of Gross 6.70% 2.30% revenue =(E/A)*100%
Source: field survey (2016) From Table 5 It was realized that the which ranged from transportation, average returns for a wholesaler in loading and offloading and market toll. Mampong in value and in percentage A wholesaler’s average marketing cost was GH¢440 and 8% gross margin per month was estimated at GH¢71.45 and GH¢ 368.55 and 6.70% and net in Mampong municipality for handling respectively. A wholesaler in Mampong 22 bags (120kg per bag) of gari municipality handled 22 bags (120kg Also, a wholesaler in Techiman per bag) of Gari every month. A received a gross margin in value and in wholesaler incurred marketing costs percentage of GH¢1380 and 7.41% and STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET 37 a net marketing margin in value and in transportation, loading and offloading, percentage of GH¢428.45 and 2.30% market toll and association dues. A per month respectively. A wholesaler wholesaler’s average marketing cost per in the Techiman municipality handled month was estimated to be GH¢951.55 69 bags (120kg per bag) of Gari for handling 69 bags (120kg per bag) every month. A wholesaler incurred of Gari. marketing costs which ranged from
TABLE 6 Average monthly cost and returns of retailers in Mampong and Techiman
ITEM MAMPONG TECHIMAN Output 7 bags 13 bags Selling price per Unit Gh¢270 Gh¢290 A. Gross revenue Gh¢1890 Gh¢3770 Output 7 bags 13 bags Cost price per Unit Gh¢250 Gh¢270 B. Variable Cost/Cost of produce Gh¢1750 Gh¢3510 C. Gross Margin (A-B) Gh¢140 Gh¢260 Gross margin as % of gross 7.41% 6.90% Revenue (C/A)*100% Amount Amount Marketing costs Gh¢ Gh¢ Transportation cost 8.63 57.8 Loading and Offloading 5.25 47.53 Market Toll 6.9 26.85 Association dues - 12 D. Total marketing costs 20.78 144.18 E. Net Margin(C-D) 119.22 115.82 Net margin as % of Gross revenue 6.31% 3.07% (E/A)*100%
Source: field survey (2016) 38 STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET
From Table 6 a retailer received an 8.27% and 2.41% share of transaction average gross margin in value and in costs along the chain in the Mampong percentage of GH¢140 and 7.41% municipality respectively. Among key and a net margin of GH¢119.22 and players in the Techiman municipal, 6.31% respectively in the Mampong processors, wholesalers and retailers municipality. A retailer in Mampong had 68.19%, 27.73% and 4.19% municipality handled 7 bags (120kg share of transaction cost respectively. per bag) of Gari every month. An Juxtaposing the proportion of cost average retailer in Mampong incurred as against player’s share of margin, a monthly marketing cost of GH¢20.78 the study rejected the null hypothesis for handling 7 bags (120kg per bag) of of equitable distribution of margins Gari. There were no trade associations along the gari marketing chain. This in Mampong municipality hence there is in consonance with the findings of was no cost item for association dues. Olagunju et al. (2012). Margins are Also, retailers received a gross not equitably distributed along the margin in value and in percentage of chain relative to cost. For instance, in GH¢260 and 6.90% and a net margin in Mampong, retailers obtained 23% of value and in percentage of GH¢115.82 the net margin even though they covered and 3.07% respectively in the Techiman just 2.4% of the total transaction cost municipality. A retailer in Techiman along the chain. In the same district, municipality handled 13 bags (120kg wholesalers who incurred 89% of the per bag) of Gari every month. A transaction costs rather received 71% retailer incurred marketing costs which of the net benefit along the chain. ranged from transportation, loading and Processors in Mampong got just 5.4% offloading, market toll and association of the net margin after incurring as high dues. A retailer incurred an average as 89% of the total transaction cost monthly marketing cost of GH¢144.18 along the chain. This diaproportionate for handling 13 bags (120kg per bag) distribution of margins can threaten the of Gari. sustainability of the gari value chain in the Mampong municipality. Unlike Distribution of Margins Mampong municipality, the distribution From Fig 1 the research revealed that of margins among the key actors in the the key players being processors, gari chain was quite balanced in the wholesalers and retailers had 89.32%, Techniman municipality. STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET 39
Fig 1 Distribution of costs and Margins among key Actors in the Gari market
Source: Generated from field data (2016)
Constraints of Key Players of scale. Frequent price fluctuations Table 7 shows the constraints faced by affect processors income. Other processors in the Gari business. They pressing constraints include high cost were ranked ranging from the most of raw material, inconsistent supply pressing ones to the least ones based of raw materials and limited access to on the mean score. The most pressing firewood. The research identified other constraints for both municipalities were constraints such as heat and smoke from lack of access to credit, price fluctuations roasting the Gari, credit unworthiness and low efficiency of machines. of some customers, stench from the The lack of access to credit makes it effluence and the drudgery involved in difficult for processors to expand their the business. scale of production to enjoy economies 40 STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET
Table 7: Constraints faced by processors of gari
CONSTRAINTS MAMPONG TECHIMAN MEAN RANK MEAN RANK st nd Limited access to credit 1.2 1 1.4 2 rd st Price fluctuations 1.6 3 0.3 1 nd rd Low efficiency of machines 1.5 2 1.6 3 th th High cost of raw material 1.8 4 1.8 4 th Low dry matter of cassava 2.4 7 2.3 5th roots th th Inconsistent supply of raw 2.2 6 2.5 6 materials th th Limited access to firewood 2.0 5 2.6 7 th th High cost of transportation 2.5 8 3.6 8 th th Poor road network 2.9 9 4.7 10 Low demand for Gari 3.9 10th 4.6 9th Scale for ranking: 1=strongly agree; 2=agree; 3=neutral; 4=disagree; 5=strongly disagree Source: Field Survey (2016) Table 8 presents the various contrary, wholesalers in Techiman constraints faced by wholesalers in municipality claimed that price both municipalities from the major fluctuations, limited access to credit ones to the minor constraints. The and high cost of transportation were wholesalers reported that limited access their major constraints. Other minor to credit, high cost of Gari and price constraints were high cost of Gari, low fluctuations are the major constraints demand for Gari and poor quality of in the Mampong municipality. On the Gari. STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET 41
Table 8 Constraints faced by Wholesalers in Gari business
MAMPONG TECHIMAN CONSTRAINTS WHOLESALERS WHOLESALERS MEAN RANK MEAN RANK st nd Limited access to credit 1.1 1 1.4 2 rd st Price fluctuations 1.4 3 1.2 1 nd th High cost of Gari 1.2 2 2.3 4 High cost of transporta- th rd 1.7 4 1.5 3 tion th th Poor road network 2.4 5 2.4 5 th th Poor quality of Gari 2.6 6 2.5 6 Inconsistent supply of th th 2.7 7 2.7 7 Gari th th Low demand for Gari 3.5 8 3.7 8
Scale for ranking 1=strongly agree 2=agree 3=neutral 4=disagree 5=strongly disagree Source: Field Survey (2016) Table 9 presents the various constraints in Techiman municipality claimed that faced by retailers in both municipalities price fluctuations, limited access to from the major ones to the minor credit and high cost of transportation constraints. The retailers reported were their major constraints. Other that limited access to credit, price minor constraints were high cost of fluctuations and high cost of Gari were Gari, low demand for Gari and poor the major constraints in the Mampong quality of Gari. municipality. On the contrary, retailers 42 STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET
TABLE 9 Constraints faced by Retailers in Gari business
CONSTRAINTS MAMPONG RATAILERS TECHIMAN RETAILERS
MEAN RANK MEAN RANK
st nd Limited access to credit 1.3 1 1.4 2
nd st Price fluctuations 1.6 2 1.2 1
rd th High cost Gari 2.5 3 2.3 4
th rd High cost of transportation 2.7 4 2.2 3
th th Inconsistent supply of Gari 2.9 5 2.9 6
th th Poor road network 3.5 6 4.2 8
th th Poor quality of Gari 3.6 7 3.7 7
th th Low demand for Gari 3.9 8 2.4 5
Scale for ranking 1=strongly agree 2=agree 3=neutral 4=disagree 5=strongly disagree
SUMMARY, CONCLUSION for their texture and colour. Analysis AND RECOMMENDATIONS of the market structure revealed that Summary and Conclusion there was no barrier to entry except The study examined the Gari market for Techiman market where permision structure. The study found that the from the market queen before operation structure of the market for Gari served as a barrier. wholesaling and retailing are almost The study revealed that in terms perfectly competitive in nature. of conduct, market players depend However, Gari processing industry largely on the forces of demand and is weak oligopolistic in nature. This supply and cost of acquisition plus was based on figures from Market margin to set prices of Gari and raw share ratio and Herfindahl-Hirschman material. Gari traders association exists Index (HHI) of key players along the only in the Techiman market. However, chain. There was low level of product the association does not interfere in the differentiation in the Gari market except trading business but it exists largely for STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET 43
welfare purposes. The study concluded Recommendations that the gari business is profitable To enhance market performance in both municipalities. A typical and conduct of actors in the gari processor received a monthly gross industry, improved and more efficient margin of GH¢1662 (34.78%) and processing equipment should be GH¢10765 (83.45%) in Mampong and provided at the community level by Techiman municipalities respectively. central government and development Net margin of GH¢890.02(18.65%) partners. To ensure consistency and and GH¢8416.50(65.24%) were also product traceability, there is the obtained in Mampong and Techiman need for product differentiation and municipalities respectively by innovation through proper packaging, processors. Retailing and wholesaling labelling and value addition for niche segments of the gari market chain markets. There should be formation were equally profitable. However, and nurturing of formidable trader net margins were not equitably associations in the industry to improve distributed among key players in the bargaining position in the market and gari market chain, especially in the also, to facilitate linkages and strategic mampong municipality. This finding alliances with institutional buyers has very serious implications for and other stakeholdes in the broader the sustainalbility of the gari value enabling business environment. Such chain in Mampong if steps are not associations should also be encouraged taken to address the imbalance in the to pool resources together through distribution of margins. The most microcredit/susu schemes to support pressing constraints among processors members with credit facilities at were found to include limited access concessional interest rates. Finally, to credit, price fluctuations and low storage facilities should be provided efficiency of processing equipment. by various trader associations in the Traders reported limited access to gari market to ensure proper storage of credit, inconsistent supply of Gari, high excess Gari during peak season. This transportation cost and fluctuations in will ensure that key market participants price as their major constraints. receive stable prices throughout the year since supply of gari on the market would be very well regulated when improved storage facilities are available. 44 STRUCTURE, CONDUCT AND PERFORMANCE OF THE GARI MARKET
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TRUST, GOVERNANCE, UPGRADING AND MARKET POWER IN THE CASSAVA VALUE CHAIN OF SOUTHERN GHANA
Isaac Manu, Akwasi Mensah-Bonsu, Henry Anim-Somuah and Yaw B. Osei-Asare Department of Agricultural Economics and Agribusiness, University of Ghana, Legon.
Abstract Herfindahl-Hirschman Index (HHI) Currently, the cassava crop is transiting to assess the market power. Gari and from a staple food commodity into an agbelima processing presents the industrial crop for the production of most important market channel for starch and ethanol and this suggests smallholder farmers, while, ethanol, probable changes in marketing cassava starch, industrial flour and high arrangements and conditions. Thus, quality flour processors are important understanding the various outlets of market channels for large-scale cassava cassava products and the nature of the farmers. value chain are important. The results obtained for level of The paper assesses the nature trust relationships along the cassava of trust, governance, upgrading and value chain were mixed: some of market power in the cassava value the indicators suggest a high trust chain in Ghana. The value chain actors relationship among actors along the interviewed include cassava farmers chain, others suggest otherwise. Among and small-scale (gari and agbelima) the various indicators of trust, a verbal processors who were selected randomly contract is predominant for cassava and large-scale cassava processors, farmers and small-scale processors, purposively sampled from the Volta, while large-scale processors engage Eastern and Central regions of Ghana. in written contract with their buyers. The study describes uses percentages The majority of cassava farmers to describe the nature of trust, type of (90%), agbelima processors (73%) governance structure, and upgrading and gari processors (77%) do not along the value chain. It uses the receive assistance on new technology, 46 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
indicative of low trust relationship, but farmers and small-scale processors all the large-scale processors receive is also necessary to ensure process, assistance on new technology shows product and functional upgrading. high trust relationship. Farmers and small-scale processors Generally, the findings suggest should be given technical and credit that captive market and modular support, which could help in modernize governance structures exist between the cassava value chain in the long term. cassava farmers and their buyers, small- Introduction scale (gari and agbelima) processors and Agriculture is important to the their buyers and large-scale processors development of Ghana, particularly and their buyers, respectively. These crucial for reducing poverty (Cervantes- results imply that while farmers can Godoy & Dewbre, 2010). While be exploited, the small and large-scale agriculture contributes 52% of the processors cannot be exploited by work force in Ghana, the service and their buyers. The process of product industry sectors contribute 29% and upgrading is slow among smallholder 19% respectively (Ghana Statistical farmers, while it is high among large- Service, 2013). scale producers. The manufacturing sector The estimates of the HHI for depends on the agricultural sector cassava farmers and small-scale for raw materials in the production processors are low, suggesting low process, with usage of agricultural raw market power and thus, their inability material by the manufacturing sector to influence the price of their respective going beyond the agri-food and fibre products. These markets are not sector to the ethanol, biodiesel and concentrated. However, estimate of polymers sectors (Boehlje & Bröring, the HHI for large-scale processors is 2011). In the Food and Agriculture very high, suggesting their market is Sector Development Policy (FASDEP concentrated. The study recommends II), Ghana’s strategies to generate a policy to increase production should economic activities from agriculture focus on improving the capacity of includes, increased access to market, small-scale processors who represent value chain development, improved a less concentrated segment of the competitiveness of production and value chain and a major market for institutional support (Ministry of Food smallholder farmers. and Agriculture, 2007). Improvement of the capacity of TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 47
Cassava has been a traditional Post-harvest losses in cassava staple food crop for households in affect all actors in the cassava value Ghana. The crop has today also become chain. Value chain actors such as small- an industrial crop in the production scale processors, industrial processors, of starch and ethanol (Adjei-Nsiah traders, transporters, retailers and & Sakyi-Dawson, 2012). There is consumers are all confronted with the potential for the use of cassava dealing with the challenge of high post- products by the brewery industry in the harvest losses (Knipscheer, Ezedinma, production of cassava-based beer (Kleih, Kormawa, Asumugha, Makinde, Phillips, Wordey, & Komlaga, 2013). Okechukwu, & Dixon, 2007). The It is important that Ghana continues challenge of high post-harvest losses to increase cassava production to feed attributed to low value addition and its inhabitants as well as its industries use of cassava in West Africa. In Brazil, with the hope of improving the standard cassava use is about 50% of animal feed, of living of value chain actors. This is while in West Africa cassava use is for because cassava will continue to play animal feed is only between 5-15% an important role in the development (Kariuki, Ochugboju, & Kottoh, 2013). of the country in terms of employment Adjekum (2006) identifies insufficient creation and poverty reduction. market channels in the cassava value Lose Cassava once harvested is a chain as a major constraint to chain highly perishable product and without actors in Ghana, noting that it leads to any kind of value addition, cassava low prices of cassava and its derived easily loses its economic importance products and therefore affects the (Bokanga, 1999). Naziri, Quaye, profitability of activities in the value Siwoku, Wanlapatit, Viet Phu and chain. Bennett (2014) in a study comparing However, recent studies suggest the diversity of post-harvest losses in that new market channels have emerged the cassava value chains in selected from the cassava value chains, presenting developing countries (Ghana, Nigeria, new opportunities for value chain actors Thailand and Vietnam), revealed that in Ghana. Currently, the use of the crop Ghana had the highest post-harvest in Ghana has gone beyond the food losses of 21.2%. This is attributed to sector, into the manufacturing sector, low value addition at the farm gate, as where cassava is processed into starch most harvested cassava tubers get to and ethanol (Adjei-Nsiah & Sakyi- consumers in the raw state in Ghana. Dawson, 2012). Kleih et al.(2013) also 48 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
identify processing of cassava into high the nature of the cassava value chains, quality cassava flour, industrial flour, given the emerging opportunities, is cassava chips and animal feed, among important. To explore this issue, the other products, as new market channels present study examines the nature for cassava in Ghana and add that the of trust, governance, upgrading and brewery industry also presents another market power (concentration) in the market channel for cassava-derived cassava value chain in Ghana. The products for the production of cassava specific research objectives of the study beer in Ghana. are: (i) to describe the market channels The Statistics, Research and for the cassava value chain; (ii) to Information Directorate (SRID, 2014) describe the nature of trust, governance report for the 2013/14 crop year stated and upgrading along the cassava value that the crop had a surplus production chain and (iii) to estimate the market of 7,151,262 metric tonnes, which power or concentration in the cassava represents about 44.72% of gross value chain. biological production of cassava for Brief Review of literature on the crop year. Koyama, Kaiser, Ciugu trust, governance upgrading and Kabiru (2015) explain that the and market power excess production, of 30% to 40% of Marketing channels and cassava produced in Ghana, presents distribution in an agri-food a huge opportunity for value addition marketing system and development of the cassava – value The terms market and distributional chains. Koyama et al. (2015) further channels could be used synonymously argued that the income of cassava (Szopa & Pękała, 2012). Each shows farmers could be improved by 50% to the movement of products from the 300%, when they are integrated into manufacturer or producer to the off- other (new) market channels. This taker or buyer and involves agents and would also lead to yield improvement other market participants. Szopa & through increased use of agro-inputs. Pękała (2012)note that functionally the The forward and backward channel includes not only the flow of linkages of cassava production to the products, but also change in ownership non-farm sector that is emerging through and information about the business existing and new market channels will environment and about risk. Atanasoaie have economic implications for value (2011) states that farmers’ choice of a chain actors. Thus, a study to understand particular channel is important and TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 49
includes the options to choose a direct influence the transformation of channel without the participation of marketing channels. Kirimi, Sitko, marketing agents or indirect channels Jayne, Karin, Sheahan, Flock and Bor with the participation of marketing (2011) found out that the liberalization agents, with their associated merits of the Kenya’s maize sector led to a and demerits. However, the scale of transformation of the maize marketing production and the nature of the market channels, and this resulted in increased should inform the choice of marketing market participants, increased channel, among others (Atanasoaie, competition and a diversity of potential 2011). market channels that small-scale Marketing channels of an agri- maize farmers have to sell the maize food system that involve only the flow their produce. They report that the of products from the farmer, processor primary assemblers were compelled to and retailer have changed, and the purchase maize in very remote areas focus now is on establishing long- on time, while their major off-takers term business relationships between (wholesalers) paid the assembler to chain actors in the agri-food sector perform their function effectively and (Shepherd, 2007). The facilitating this has led to a reduction in the margin factors include high demand for food between assembler and the wholesaler. quality, safety and changes in income Trust (Shepherd, 2007). Musso (2010) also Trust which has been defined as ‘the identifies key elements that could lead extent to which one believes that to changes in marketing channels to others will not act to exploit one’s include changes in demand of product, vulnerabilities’ (Morrow, Hansen, & new expectation requirements for Pearson, 2004, p. 50), has assumed products, technological changes that importance in economics and sociology influence the relationship between for a number of reasons (Vieira, Paiva, chain actors and the type of competition Finger, & Teixeira, 2013). Coulson in the chain. Caiazza and Volpe (2012) (1998) notes that trust is needed for the report an increase in the level of success of firms in the value chain. It is competitiveness of markets within the an engine to the internal and external value chain with shift in focus to cost performance of firms and helps to reduction to increase profit margins reduce the operational cost of firms, without compromising on quality. while strengthening inter-firm linkages Government policies also 50 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
and relations (Coulson, 1998). leadership and a scale in a value Using descriptive statistics, chain, there will be no cooperation Masuku and Kirsten (2003) report that between value chain actors. Kaplinsky trust is important in the improvement and Morris (2000) state that trust is a of cooperation among participants determinant of the value chain leaders’ in a supply chain and yields better control of the value chain and the future performance in an organization than sustainability of a value chain is based binding agreements. Contracts among on trust building. market participants affect the ability Handfield and Bechtel (2002) of chain actors to benefit from new in a study on the role of trust and the dynamics in the market. They note relationship structure in improving that trust based relationships including supply chain responsiveness using truthfulness and absence of exploitation the structural equation model, suggest between processors and sugar cane that a legally binding written contract growers help to improve performance can be an impediment of trust, while of market participants. Masuku and informal verbal agreements on delivery Kirsten (2003) also note that trust schedules, payment terms and pricing improves the obligation of chain actors, enhance trust in relationships among reduces the cost of monitoring and chain actors. Bouckaert, Laegreid and enhances efficiency in the value chain. Van de Walle (2005) add that the use The study further reveals that both of contracts gives indication that there farmers who trust the sugarcane millers is no trust between firms in a chain. and those who do not trust the millers Using confirmatory factor analysis are aware of the importance of building in a study on trust and supplier-buyer relationship. The majority (90.6%) who relationships, Vieira et al. (2013) did not trust the sugarcane millers were found out that cooperation, effective of the opinion that the millers exploited communication between supplier and them. buyer is positively related to trust Webber and Labaste (2007) note (building). In addition, the ability to that the pivot on which the development meet delivery schedules influence trust. of a value chain takes place is trust. It However, they also revealed that the is essential to enhance the relationship flow of information is not a sufficient between the value chain actors for the condition for the existence of trust development that benefits all. They between supplier and other chain actors. argue that without trust, information, Humphrey, Kaplinsky, & TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 51
Saraph(1998) categorise chain this regard, Swinnen, Vandeplas and actors’ conduct in relation to trust as Maertens (2007) note that the type of follows: (i) length of contracts; (ii) governance can lead to growth, food ordering procedure; (iii) contractual security and poverty reduction in relationship; (iv) modes of inspection Africa and advocate for mechanism to used in accepting incoming materials; increase prices of staple foods in Africa (v) degree of dependence among chain to ensure the development of value participants; (vi) types of technical chains through appropriate governance assistance; (vii) nature and methods of system. communication along the chain; (viii) Various methods have been used determination of prices; (ix) credit in analysing the governance structure extended along the chain; and (x) mode in a value chain. Gereffi, Humphrey of payment to external producers. These and Sturgeon (2005) analysed the type indicators of trust building are used in of governance found in a value chain the present study. using three key elements. These are complexity of transaction, ability to Governance of a Value Chain codify transaction and capabilities in the Frederick (2014, p. 7) stated ‘governance is about power and the ability of a firm supply base. They further categorized (or organization or institution) to exert governance into five aspects, which are control along the value chain by setting as follows: and/or enforcing parameters under which others in the chain operate’. 1. Markets: In this type of value chain governance the seller may or may not Humphrey & Schmitz (2000) identify produce to a particular specification. three types of governance: network, The tendency for the seller to switch quasi-hierarchy and hierarchy. Network to another buyer is high. The level of depicts equal power balance in the interdependency among value chain governance structure, while quasi- actors is also low. hierarchy shows a governance structure 2. Modular value chains: Suppliers to a in which one element/component is modular value chain produce according superior to the other. Bitran, Gurumurthi, to a specific quality standards. In the & Sam (2006) state that organizations provision of turn-key services, suppliers are moving from the hierarchical bear full responsibility of activities one sided governance system to the involved. The supplier can even pre- network system of governance, with finance the activity. the focus now on partnership. In 3. Relational value chains: There is 52 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
high interdependency and relationship are the modular, relational and captive between buyer and seller. Trust, spatial are in the middle of the continuum, proximity and reputation play critical similar to Gereffi, Humphrey and roles in relational value chains. These Sturgeon’s (2005) categorization of chains could also be influenced by governance structure. family and ethnic relationships. A Hammervoll (2011) in a study on relational value chain takes time to ‘governance of value creation in build. supply chain relationships’ and using 4. Captive value chains: In this the structural equation model states governance structure, one value that the relational governance system chain actor is dependent on the other. was the best in terms of knowledge and Most often, the small market supplier information sharing. Ji, Felipe, Briz depends on the large buyer. The large and Trienekens (2012) in an empirical buyer dictates the price, the quantity study on governance structure and the standards and thus controls the choices in China´s pork supply chain small supplier. from the perspective of transaction 5. Hierarchy: This is the top to cost economics and transaction bottom approach of governance. It is value analysis state that the market characterized by the superior giving relationship governance structure direction to the subordinate. It could also exists between smallholder pig farmers be instructions from the headquarters of and smallholder slaughterhouses. an organization to its divisions or units. They conclude that the value chain Dunn and Villeda (2005) in analysing participants had full knowledge about the governance structure of a value chain each other, which therefore influences assumed that a continuum indicates the type of the governance structure. vertical relationships between firms. Upgrading of a Value Chain The type of association between firms Upgrading entails improvement of a determines the governance structure of value chain activity from the perspective a value chain. At one extreme end of the of product quality, cost efficiency and the continuum is a market relationship with skills of value chain actors (Pietrobelli limited interaction between firms. The & Rabellotti, 2004). Mitchell, Coles other extreme end of the continuum is and Keane (2009) clarify upgrading hierarchical relationships in which the as the process where value chain value chain has an owner who gives participants acquire the necessary skills direction. The network relationships that TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 53
in technology to improve market and upgrade to add more activities. Under institutional capacity to enhance their some situation, the participant may take efficiency. Upgrading allows value chain over the entire value chain. participants to perform a higher value Market power and concentration adding activity. Mitchell et al. (2009) play important roles in driving identify seven upgrading strategies. innovation in the value chain. Large These are horizontal coordination, firms have the needed resources to push vertical coordination, functional for process and product upgrading. The upgrading, process upgrading, product aim is to introduce new products and upgrading, inter-chain upgrading and rebrand existing ones through packaging enabling environment upgrading. (Riedel, Bokelmann, & Canavari, Humphrey (2004) states that the 2009). Dunn and Villeda (2005) assert strategies for upgrading does not only that the type of governance could also need improvement of competencies but affect the nature of upgrading in a also the establishment of relationship value chain among medium and small between market participants. Thus, it is enterprises. They emphasize that value important to demonstrate the effect of chain actors in a captive relationship value chain relationship on upgrading could benefit from technology that can the acquisition of new knowledge and lead to process upgrading. In addition, technology. modular, relational and captive Humphrey and Schmitz (2000) facilitates product upgrading. identify three issues regarding Neven (2014) states that upgrading in a value chain. The first consumers determined value. This issue is upgrading regarding production. implies that consumer demand In this issue domestic value chain actor, influence upgrading in a value chain. learn new knowledge on improvement Consumer’s ability to pay extra for in production and quality. The improved product quality has been a second issue arises because of buyer driver of value chain upgrading. An succession. Producers produce for a innovation that encourages efficient low market at the initial stage and move production, productivity and reduced on to produce for a complex market wastage facilitates upgrading in the with high demands. The third issue value chain. identified is the functional upgrading where a participant undertakes a particular activity in a value chain but 54 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
Market power Saitone, & Sexton (2012) in a study Individuals, groups and firms acting of U.S farm product markets used jointly can exercise market power the Herfindahl Hirchman Index (White, 2012). It shows the extent and four-firm concentration ratio to which prices are determined by (CR4) to measure market power and a firm or group of firms. In a perfect concentration, respectively and found competition, every market participant a positive relationship between market is a price taker and there is homogenous power and level of concentration. A product. This does not happen when buyer with a higher market power can there is an exercise of market power lower input prices, while, a higher (White, 2012) . market power of the seller lead to An issue arising in the higher product prices (Swinnen & understanding of market power is that Vandepla, 2009). Market power affects firms that determine the price, quantity the efficiency and equity of distribution and quality standards lead numerous of value added in a chain. Riedel et al. markets (Tirole, 2014). Market power (2009) emphasized that with market in a value chain relates to benefits and power, a value chain actor can decide risks shared by value chain participants on the supplier it wants to participate and includes the behaviour of the in the value chain, the sharing of role lead firm regarding the compliance to and the arrangement of production. standards (Webber & Labaste, 2010). The use of market power is for profit Porter (2008) noted that knowledge maximization. Different participants in of the factors influencing market the value chain are exposed to varying power could give an indication of the degree of risk depending on the power current and future profitability and position. competitiveness of a firm. Market power Using a linear simulation model indicates the level of control a firm has to measure the effect of market power in on an industry locally or globally (Wu, the corn sector and it impact as a result Bose, Wierman, & Mohsenian-Rad, of ethanol subsidy, Saitone, Sexton and 2013). Sexton (2008) revealed that the abuse Swinnen and Vandepla (2009) of market power reduced the growth of stated that market power is associated the corn production. They noted that with concentration, where a higher production of corn would have increased concentration could lead to higher without the exercise of market power market power and vice versa. Crespi, under perfect competition. Sexton and TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 55
Zhang (2001) assessed of market power opinion, noting that Lerner’s Index in the U.S. food industry revealed that is also an indirect measure of market the effect of the abuse of market power power. They note that estimating by the oligopolist was more intense than market power using the index requires same exercise of market power by the three important assumptions, namely oligopsonist. The existence of both the assumptions on input and output prices oligopolist and oligopsonistin a market and the cost functional form to estimate leads to severe welfare losses to other econometrically the marginal cost, actors in the market. which could lead to wrong estimations. The use of concentration ratios Leon (2014) adds that the Lerner and the Herfindahl–Hirshman Index index has considerable theoretical and (HHI) have been adopted severally for analytical weaknesses. He notes that assessing market power of firms, though deviation of price from marginal cost they represent indirect measurements relates more to the efficiency of the firm of market power (Kovács, 2011). than the abuse of market power. The use of Herfindahl–Hirshman METHODOLOGY Index to measure market power Methods of Analysis ignores the transmission challenges Analysing the market channels of the on the market (Lee, Baldick, & Hur, cassava value chains 2011). According to Carbo-Valverde, The study conducted a value chain Rodríguez-fernández and Udell (2006) mapping using an organogram to a direct measurement of market power examine the market channels of the entails the use of the Lerner’s Index. cassava value chains. Percentages were The Lerner’s Index measures how far used to express the distribution of the the price of a product deviates from the cassava-derived products along the marginal cost of production, indicating channels. the mark-up to marginal cost because of market power (Carbo-Valverde et al., Analysis of the nature of 2006) the cassava value chains The Lerner Index has advantages i. Trust over the HHI because it provides a To conduct an analysis of trust in the more direct measure of market power, cassava value chain, the study adapted consistent and robust compared to HHI the indicators of trust by Humphrey, (Carbo-Valverde et al., 2006). Yaldiz Kaplinsky, & Saraph (1998). Indicators and Bazzana (2010) are of a different of trust used for the study are length of 56 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
trading relationship, contract, ordering iii. Governance in the cassava value procedure, inspection, payment chain duration, price determination, degree The study used combinations of low or of dependence, technical assistance, high measure for three key indicators credit assistance and frequency of to describe the types of governance communication. The study used structure for the cassava value chain. percentages to describe trust relations The three indicators used, namely along the cassava value chain. complexity of transaction, ability to Percentages lower than 50% for each transmit information efficiently and indicator of trust characterize low trust the capacity to meet requirement of relations, percentages equal to 50% transactions, have been adapted from suggest moderate trust relations, while Gereffi, Humphrey and Sturgeon percentages greater than 50% for each (2005). The study assessed the indicator of trust characterize high trust complexity of transaction, ability to relations. Length of trading relationship transmit information and the capacity greater than two years represents high to meet requirements of transaction as trust relation, while, those less than or follows: equal to two years signifies low trust (a) The complexity of transaction relations. was assessed through the number of ii. Upgrading processes involved for transaction The indicators for upgrading used in to be completed. Low complexity the present study are process, product, of transaction is characterized by functional and inter-chain upgrading in transaction involving not more than the cassava value chain. Percentages two processes for completion, while, were used to assess the type of high complexity of transaction entails upgrading seen in the value chain for more than two processes for transaction each indicator. A percentage lower than to be completed. 50% for an indicator characterizes low (b) The ability to transmit or upgrading, equal to 50 for an indicator codify information was assessed characterizes moderate upgrading, through the frequency and medium of while a percentage greater than 50% communication between chain actors. for an indicator characterizes high (c) The capacity of an actor to upgrading. meet requirements of transaction was assessed through the ability to meet TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 57
quantity and quality requirements of indicator greater than 50% will buyers. characterize high for a particular The study used percentages governance type. to determine whether an indicator The details of the decision rule of governance as measured is high, for the type of governance in the moderate or low. The following cassava value chain are presented in benchmarks establish an indicator of Table 1: A market governance structure governance type: is characterized by low complexity of (d) Average percentage of an transaction, high ability to transmit indicator less than 50% will characterize or codify transaction information and low for a particular governance type. high capacity to meet requirements of transaction. A captive governance (e) Average percentage of an structure is characterized by high indicator equal to 50% will characterize complexity of transaction, high ability moderate for a particular governance to transmit information and low capacity type. to meet requirements of transactions. (f) Average percentage of an Table 1: Determination of the type of Governance in a Value Chain Capabilities Governance Complexity of Ability to codify Power in the supply Type Transaction transaction Asymmetry base
Market Low High High Low Modular High High High Low Relational High Low High Low Captive High High Low High Hierarchy High Low Low High Source: Adapted from Gereffi, Humphrey and Sturgeon (2005)
Analysis of Market Power for cassava value chains is not defined The study uses the Herfindahl- (marginal costs and product prices along Hirschman Index (HHI) to measure the chain are not well estimated). The market power in the cassava value Herfindahl-Hirschman Index (HHI) is chains. It used the Herfindahl- measured by first estimating the market Hirschman Index because the market share that is given as: 58 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
high quality cassava flour processors, gari processors and agbelima processors. Pre-tested structured x 100 (3.1) questionnaires were used to gather relevant information of the cassava Then, the HHI is estimated by taking the value chain for the analysis. sum of the squares of the of the market Cassava starch manufacturers, share of value chain participants as: cassava starch cake and high quality = 2 + 2 + + 2 S1 S 2 ...... S n cassava flour processors were
(3.2)Where Si = percentage market purposively selected. The Dutch share of individual firm (i) Agricultural Trading Company The decision rule for an estimated (DADTCO), Mabert Seed Company HHI is: Limited, Caltech Ventures Limited and (i) A Herfindahl-Hirschman Index the Ayensu Starch Factory all provided lower than 1000 will represent an data for the study. unconcentrated market. This implies The field survey was undertaken a participant in that market cannot in three districts, namely Akuapem influence the price of the product. North, Awutu Senya and Ho Municipal (ii) A Herfindahl-Hirschman Index in the Eastern, Central and Volta regions, between 1000 and 1800 will represent a respectively, which were purposively moderately concentrated market where selected. The purposive selection of the a market participant may sometimes districts was informed by the presence influence the price of a product. of cassava-derived product value-chain (iii) AHerfindahl-Hirschman Index actors in the districts. The random greater than 1800 will represent a sampling technique was used to sample highly concentrated market. In this 301 cassava farmers from these three case, a market participant has the power districts. In addition, 20 each of gari and to influence the price of a product. agbelima processors were randomly Data Collection selected from the three districts. Details The data were collected from cassava of the value chain actors interviewed farmers, cassava cake manufacturers, are presented in Table 2. TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 59
Table 2: Cassava value chain actors sampled
Processors sampled Farmers Communities where farmers were sampled with District sampled Small Large sample size in brackets scale scale
Asenema (50) Akuapem Camp (25) North 99 40 0 MintahKrom (24)
AkoefeAvenui (21) Hodzo (17) Ho Municipal AkoefeGadza (17) 102 40 3 Tanyigbe (24) Tokokoe (23)
Akumatom (25) Manfi (26) Ewutu Senya 100 40 1 Kwasiadri (27) Okuampa (22) Total 301 120 4
RESULTS AND DISCUSSIONS Table 3 presents the socioeconomic Socioeconomic characteristics of characteristics of the cassava farmers cassava farmers and small-scale and small-scale processors. processors Table 3: Socioeconomic characteristics Socioeconomic Farmers Agbelima Processors Gari Processors Characteristics Gender: Male=76.7% Female=100% Female=100% Female=23.3% Age (yrs) 44.41 40.15 44.12 Household size 6 Marital status Married=76.1% Married=95% Married=83.3% Others= 23.9% Others= 5% Others= 16.7% Years in farming/ 16.24 12.35 18.93 processing Primary occupation Farming=99.7% Processing=70% Processing=81.7% Artisan=0.7% Others=30% Others=18.3% Educational level No education=16.3% No education=26.7% No education=5.0% completed Primary=21.3% Primary=10.0% Primary=25.0% JHS//Middle=55.5% JHS//Middle=60.0% JHS//Middle=58.3% SHS=5% SHS=3.3% SHS=8.3% Tertiary=2% Tertiary=0.0% Tertiary=3.3% Source: Field Survey, 2016 60 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
The majority of farmers interviewed years working in the cassava-derived were male (76.7%). Over 70% of product value chains. Farming and farmers and agbelima processors had a processing of gari and agbelima was form of basic education from Primary a primary occupation for most of the to Middle/Junior High School. In respondents. addition, 90% of gari processors had a Market channels and Conduct form of education from primary to the of Key Market Participants tertiary level. Only 16.3% of farmers for the Cassava Value Chains interviewed had no formal education, Figure 2 presents an illustration of the while about 27% of the agbelima market channels for cassava and its processors had no formal education. derived products.Market channels in The mean age of farmers in the study the value chain areas was about 44 years, while those About 21 market channels were of gari and agbelima processors were identified for cassava value chains about 44 and 40 years respectively. in Figure 2. The study revealed that Processing of gari and agbelima is a gari and agbelima processing present female dominated activity. The majority major market channels for smallholder of the respondents interviewed were farmers. married and have spent more than 12
Figure 2: Market channelsfor the cassava and derived product TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 61
It came out from the study that 46.5% of the study show that high quality of the cassava produced by smallholder cassava flour processors’ purchase farmers are purchased by agbelima 40% of the cassava produced by processors, while, 32.9% of cassava large-scale farmers. Cassava starch produced by smallholder farmers and ethanol processors accounts for are purchased by gari processors. 33% and 22% of cassava produced In addition, marketing agents buy by large-scale farmers, respectively. about 20% of the cassava produced Only 5% of cassava produced by large- by smallholder farmers, while the scale producers is used for industrial remaining, 0.7%, are sold to others, flour production. This implies that like directly to consumers. Marketing high quality cassava flour and cassava agents sell about 5% of the raw cassava starch are important market channels to starch, ethanol, high quality cassava for large-scale farmers. flour and industrial flour processors. In assessing the market channel An analysis of the market channel for ethanol, the study found that the for agbelima shows that the majority major off-taker for ethanol is a distiller (83.3%) of the agbelima produced named Kasapreko Company. The is purchased by wholesalers in the Company is a minority shareholder cassava product value chain, while, of Caltech Ventures, the only ethanol 15% is purchased by retailers. Only producer in the value chain. However, 1.7% of the agbelima produced in the Air Liquid Limited purchases carbon chain is bought directly by consumers. dioxide, a by-product in the production On the other hand, the results show of ethanol, from Caltech Ventures. that the majority (66.7%) of the gari Carbon dioxide represents a major produced is purchased directly by value addition in the chain. consumers, while, 30.0% is purchased The major buyer of cassava starch by wholesalers. Retailers buy only produced by Ayensu Starch Company 3.3% of the gari produced directly from is the brewery Guinness Ghana the processor. Limited. Ayensu Starch Company The study revealed that the key has a signed contract with Guinness actors along the market channel for Ghana Limited as the sole supplier of large-scale cassava producers and cassava starch, used in the production outgrowers are the cassava starch, of beer. This implies that any breach ethanol, high quality cassava flour and in the contractual agreement could industrial flour processors. The results lead to the collapse of Ayensu Starch 62 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
Company since it has only one buyer. processing plant. In addition, it has For example, the Dutch Agricultural 15 outgrowers and relies heavily on Trading Company, considered in the large-scale cassava producers outside present study, has collapsed because its its base at Hodzo, in the Volta region. only off-taker, Accra Brewery Limited The Company’s involvement in the stopped sourcing cassava starch cake production of cassava from its own from them. farm is to ensure a regular supply of The market channel for high cassava as raw material to support its quality flour is, however, diverse. The diversified output of ethanol, carbon study revealed that 81% of the high dioxide and high quality cassava flour. quality flour producedis sold to Accra Ayensu Starch Company Brewery Limited for the production Ayensu Starch Company Limited has of cassava beer. The agri-food sector acquired 2,000 hectares of cassava represents another source of market for farm to feed it processing plant. In high quality cassava flour, where about addition, it has established 2,500 15% of the high quality flour produced outgrowers and buys from individual is sold to bakeries and restaurants. In cassava farmers. The company has addition, 4% of the high quality flour terminated its agreement with Maxpo produced is exported. that was its sole agent for the supply The study found that the market of cassava. This implies that Ayensu channels for industrial cassava flour Starch Company Limited will in the are the plywood and mosquito coil future secure its source of raw material producers. It came out from the for the production of cassava starch study that 84% of the industrial flour from its own field and its outgrowers. produced is sold to Volta Forest, a plywood manufacturing enterprise, Mabert Seed and the remaining 16%, is sold to Company Limited Beatex Company for the production of Mabert Seed Company Limited has mosquito coils. 50 hectares of cassava farm to feed it processing plant. The Company has Conduct of Key Market an established 25 outgrowers and buys Participants Caltech Ventures raw cassava from individual farmers to Caltech Ventures Limited has 3,000 support the production of high quality hectares of cassava farm to feed it cassava flour and industrial flour. TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 63
The Dutch Agricultural the existence of trust between cassava Trading Company Limited farmers and their buyers. The study also The Dutch Agricultural Trading revealed that all the agbelima processors Company Limited (DADTCO) was had a verbal agreement with their buyers established in 2012 as a processor before transactions came into effect. of cassava starch cake, which was However, the majority (78.3%) of gari supplied solely to Accra Brewery processors do not have any contract Limited for the production of cassava with their buyers, while, 21.7% had a beer. The Company had no cassava verbal type contract with their buyers. plantation and relied on individual The gari processors who had verbal cassava farmers who sold to them at contracts had them with wholesalers of the farm gate. By using a composite gari only. The study, however, revealed and modernized mobile processing that value chain actors involved in the technology, the company was able production of cassava starch, cake and to process raw cassava at any given high quality flour had written contracts location where cassava was available. with their buyers. This indicates a low A breach in contractual agreement trust relationship between these value between DADTCO and Accra Brewery chain actors and their buyers (Table Limited led to the collapse of the 4), but it guarantees an enforceable company in June 2015. contract with some legal implications. The details of the written contract The nature of trust, included procurement of cassava, governance, upgrading price of product, quality specification, i. Trust relations in the value chain delivery and payment schedule. Table 4 presents the results for the b. Length of trading relationship indicators of trust in the cassava value The study results revealed that the chain. mean length of a trading relationship a. Contracts of farmers with their buyer is about The study revealed that the majority of 12 years, while those of the gari and cassava farmers interviewed (85.7%) agbelima processors were about 11 had a contract with their buyers, while and 7 years, respectively. Using a 14.3% of the farmers did not have benchmark of 2 years to represent low contract with buyers (Table 4). The type trust relations, the findings suggest a of contract that farmers had with buyers high trust relationship in the cassava of cassava was verbal. This indicates 64 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
value chain. The study also revealed that produce is inspected upon delivery. For the mean trading relationship existing processors of cassava starch and cake between cassava starch, cake and high and high quality cassava flour, all of quality cassava flour processors’ and them indicated that their produce is their clients was about 5 years inspected upon delivery. The inspection (Table 4). of starch, cake and flour is on the colour, acid content, moisture content c. Ordering procedure and smoothness. Actors in the cassava value chain do not engage in open bidding, which, e. Degree of dependence according to Humphrey, Kaplinsky The cassava farmers, gari and agbelima and Saraph (1998), is an indication of processors sell their produce to high trust relations in the value chain. numerous buyers. There is therefore a Prices are negotiated along the chain. low level of dependence in the value However, this could be due to the chain actors and this indicates low trust absence of a commodity exchange in relations. However, producer of cassava Ghana, where open trading of cassava starch (Ayensu Starch Company) relies and its products could take place. solely on Guinness Ghana Limited. In addition, Guinness Ghana relies d. Inspection of produce solely on Ayensu Starch Company for About 79.10% of the farmers indicated the supply of cassava starch. This is that the buyer inspects their produce indicative of a high trust relationship. either on delivery or on the farm, while, In an event of a breach of contract, 20.9% indicated that there is little or no either party may be negatively affected. inspection of their produce (Table 4). Although Caltech Ventures depends on The majority of farmers indicating that Accra Brewery Limited, its diversified a form of inspection of produce before output allows it to sell to other value pick-ups, suggest low trust relationship. chain actors. Caltech Ventures Limited For agbelima and gari processors is therefore not over dependent on 83.30% and 81.70% indicated that their Accra Brewery Limited. TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 65
Table 4: Trust relations in the cassava value Cassava starch Indicator of trust Farmers Agbelima Processor Gari Processor and high quality flour processors Yes=21.7% Yes=85.7% Yes=100% Yes=100% No=78.3% Contract No=14.3% Type=Written Type=Verbal (100%) Type=Verbal Type=Verbal (100%) (100%) (100%) Mean=6.53 Mean=5.00 Length of trading Mean=11.50 Mean=10.75 Std. Devia- Std. Devia- relationship Std. Deviation=5.74 Std. Deviation=7.95 tion=2.94 tion=3.37 Ordering No open bidding No open bidding No open bidding No open bidding procedure Prices negotiated Prices negotiated Prices negotiated Prices negotiated Produce inspected on delivery=65.10% Produce inspected Produce inspected Inspection of Inspection on on delivery=83.30% on delivery=81.7% Produce inspected produce field=14.0% Little or no Little or no on delivery=100% Little or no inspection=16.7% inspection=18.3% inspection=20.9% 1.Cassava starch processor has sole Processor supplies Farmer supplies to Processor supplies buyer and buyer to numerous Degree of numerous buyers, to numerous buyers, has sole supplier buyers, buyer dependence buyer has numerous buyer has numerous 2. High quality has numerous farmers suppliers cassava flour suppliers processors have few buyers Technical Yes=10% Yes=27% Yes=23% Yes=100% assistance No=90% No=73% No=77% Yes=10.3% Yes=3.3% Yes=23.3% Yes=75% Credit extended No=89.7% No=96.7% No=76.7% No=25% Frequent through Frequent through Frequent through Frequent through informal both formal and informal sources informal sources sources such as informal sources Communication such as mobile mobile phone, mobile phone, such mobile phone, face-face face-face face-face interac- phone, e-mails, interactions interactions tions letters Negotiated=95.7% Negotiated=93.3% Negotiated=80.0% Quoted by buy- Quoted by buy- Quoted by Bargained and Price er=4.0% er=5.0% buyer=16.7% agreement determination Quoted by sell- Quoted by sell- Quoted by reached= 100% er=0.3% er=1.7% seller=3.3% Payment delivery/spot=1.7% spot=38.3% spot=66.7% within 14 days duration within 14 within 14 within 14 after invoice=50% days=27.9% days=43.3% days=18.3% 3 Months after within 1 within 1 within 1 invoice=50% month=23.6% month=11.7% month=5% within 1 and half within 1 and half within 1 and half month=33.2% month=6.7% month=10% within 2 Months=1% within 3 Months=10% Part payment before delivery=2.7% Source: Field Survey, 2016 66 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
f. Technical Assistance g. Credit Extended Only 10% of the farmers receive Only 10.3% of farmers receive assistance from value chain actors on credit from value chain actors before new technological innovations. The production. The majority (89.7%) of type of support includes the supply farmers do not receive credit from of improved varieties extension and chain actors before production. Also, input support. The majority (90%) of 96.7% and 76.7% of agbelima and gari farmers do not receive assistance from processors do not receive credit from chain actors on new technology. This value chain actors before production. is indicative of low trust relations. This is indicative of low level of trust About 73% of agbelima processors do in the relationship between these actors not receive technical assistance, while and their buyers. However, the majority 27% receive technical assistance, an (75%) of cassava starch and cake, high indicative of low trust relationship. quality flour processors receive credit The technical support includes from their buyers, as indicative of the procurement and the use of modernize existence of trust. pressor, milling machines and new h. Communication processing technology. Majority of the The study results show that value gari processors (77%) do not receive chain actors such as farmers, gari and assistance on the use of new technology. agbelima processors communicate Only 23% receive assistance from the frequently with their buyers through use of new technology. The technical informal sources using mobile phones assistance received also includes access and face-face interactions. This is to cassava pressor, milling machines and indicative to high trust relations. In the use of alternative sources of energy addition, actors such as cassava starch such as gas stoves for processing the and cake, cassava flour producers gari. This is also indicative of a low trust communicate frequently with buyers relationship. All the cassava starch and from each stage of the production high-quality cassava flour processors process until the product is delivered. receive assistance on innovative These chain actors adopt multi- technology from their buyers and other channelled communication tools that chain actors. This is indicative of high are both formal and informal. It includes level of trust in their relationship. communication using mobile phones, face-to-face interactions, emails and TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 67
letters. This is also an indication of high receive pre-finance before production. trust relationship. About 38.3% of agbelima processors i. Price determination are paid on the spot, while, 43.3% are It came out from the study that the paid within 14 days. This is indicative buyer and seller respectively imposed of lower trust relations compared to only 4% and 0.3% of prices received that of farmers. However, 66.7% of by farmers. The majority (95.7%) of the gari processors are paid on the spot, price received by farmers are negotiated while, 18.3% are paid within 14 with the value chain actor until an days. This is indicative of lower trust agreement is reached. This implies relations compared to that of agbelima there are fair trading practices and low processors. However, these different price exploitation in the value chain and levels of repayment time allowed could indicative of high trust relationship. also be related to the shelf life of the The study also revealed that 93.3% different products involved. Cassava of the price received by the agbelima starch and cake processors are paid 90 processor are negotiated, while, 80% of days after invoicing, while, high quality the prices received by the gari processor cassava flour processors are paid 14 are negotiated. This is indicative of days after invoicing, indicative of the high trust relations between the gari establishment of high trust relations. and agbelima processor and the buyer. ii. Governance in the cassava value Prices obtained by cassava starch and chains cake, high quality flour processors are The results from the study all negotiated until an agreement is suggest that the type of governance reached. existing between cassava farmers and their buyers is generally captive (Table j. Payment duration 5). This is because about 56.1% of Only 1.7% of the cassava farmers the farmers stated that the transaction interviewed were paid on the spot for process is complex. Transaction produce sold. About 85% of farmers between farmers and the buyer involves are paid between 14 days to 45 days farm visit(s) by buyer, agreement after sales of produce (Table 4). The on terms of payment, observing the long duration granted for repayment product mature, deciding the date to could be an indication of high trust harvest, harvesting and payments. relation within chain actor, other things Farmers interviewed indicated that being equal. About 2.7% of the farmers the high complexity of transaction is 68 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
because of the dispersed settlements, cost and poor roads. These factors have the inability to preserve the product, implications for the payment duration lack of a ready market, high transport allowed to buyers. Table 5: Type of governance in the cassava value chains
Cassava starch, cake Variable Farmers Agbelima Gari and high quality flour Complexity of Low=43.9% Low=54.2% Low=73.3% High=100% transaction High=56.1 High=45.5 High=26.7% Ability to Low=48.5% Low=43.9% Low=46.7% transmit High=100% High=51.5% High=56.1% High=53.3% information Capacity of Low=87.7% Low=47.5% Low=38.3% Low=25% chain actors High=12.3 High=52.5% High=61.7% High=75% Result of Captive Market Market Modular gover- governance governance governance governance nance type system structure structure
Source: Field Survey, 2016 In addition, it came out from the study captive governance structure between that 52% of the farmers interviewed are farmers and their client. The existence of able to transmit information efficiently a captive governance structure between with their buyers. This is done through the farmers and their buyers implies informal means using the mobile that the farmers could be exploited phones and face-to-face interactions. along the cassava value chain. Most cassava farmers also have low The study results also revealed capacity to meet the requirement of that the type of governance existing transaction. This was attributed among between agbelima processors and others to lack of funds (42.8%), poor their buyers is generally the market weather (18.5%), lack of market (6.8%), governance structure (Table 5). About traditional farming technique (7.2%), 54.2% of agbelima processors stated high input cost (6.2%) and low soil that the transaction process is simple. It fertility (6.4%). The high complexity entails the buyer coming to the market, of transaction, high ability to transmit a negotiation on price and agreement on information and low capacity to meet terms of payment. requirement of transaction imply a This process of transaction has been TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 69
facilitated by their long relationship with their buyers, through informal with buyers and good knowledge ofthe means using mobile phones and face- price of product. About 56.1% of the to-face interactions. The majority of agbelima processors interviewed were gari processors (61.7%) are able to able to transmit information efficiently meet the requirement of transaction, with their buyers, done through which is attributable, among others, to informal means using the mobile phone the purchase of good quality cassava and face-to-face interactions. (42%) and low cassava prices (37.7%). The majority of Agbelima The presence of a low complexity of processors (52.5%) are able to meet transaction, high ability to transmit the requirement of transaction. This has information and high ability to meet been attributed, among others, to good requirement of transaction lead to a quality cassava (46.5%), low cassava market governance structure between prices (42.6%), increased volumes of gari processors and their buyers. cassava (9.3%) and experience (1.9%). The existence of market governance The presence of low complexity of structure between the gari processor transaction, high ability to transmit and its buyer implies there can be no information and high ability to meet exploitation. requirement of transaction lead to a On the other hand, the results market governance structure between from the study suggest that the type agbelima processors and their buyers. of governance existing between This implies that there can be no cassava starch, cake and high quality exploitation. flour processor and their buyers is It was also revealed from the generally the modular governance results of the study that the type of system (Table 5). This is because all the governance existing between gari actors encounter complex transaction processors and their buyers is generally with their buyers. The transaction the market type (Table 5). About process entails expression of interest, 73.3% of gari processors stated that presentation of sample, quality the transaction process is simple. It specification, sample tested, acceptance, involves the buyer coming to the market, pricing and supply agreements. All the negotiate on the price and an agreement processors of cassava starch, cake and on terms of payment. About 53.3% of flour are able to transmit information the gari processors interviewed are efficiently with their buyers. This is able to transmit information efficiently done through formal and informal 70 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
means using the mobile phones, face- a. Farmer to-face interactions, electronic mails The study showed that smallholder and letters. In addition, the majority farmers in the study area continue to (75%) of processors of cassava starch, use the traditional method of farming. cake and high quality flour are able to Major inputs used are cutlasses and meet the requirement of the transaction hoes. Large scale farmers, however, processes. This has been attributed, use agrochemicals and tractors in their among others, to recruitment of quality production process. On improvement staff, technological innovation and of product quality, 99.7% of farmers huge capital investment. The existence indicated that they have not improved of modular governance between the product quality, while, 0.3% have processors of cassava starch, cake improved on product quality. Few and high quality flour and their buyers farmers (47.5%) have moved to a imply there can be no exploitation. higher stage of the value chain, while, iii. Upgrading along the cassava 52.5% are stillon the same stage of value chain the value chain and not performing Table 6 presents the results for upgrading additional value addition. Additional of their cassava products and activities value addition by farmers in the chain by actors along the value chain. includes peeling the cassava (78.3%), peeling and cutting (1.4%). TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 71
Table 6: Upgrading in the value chain
Cassava starch Upgrading Farmer Agbelima Gari and High quality flour
Yes=23.3% No=76.7% Yes Yes=26.7% 1. Use of pressor=58.8% 1.No upgrading by No=73.3% Continuous 2.Gas stoves=10% Smallholders Yes improvement 2.New knowledge=31.2% 2.100% process upgrading 1. Use of pressor=57.3% on production Process No through use of tractors 2.New knowledge=42.7% technology 1.Milled and agrochemicals by No Modern tech- 2. Stone pressing large-scale holders 1.Milled nology 3. Roasted using firewood 2. Stone pressing 4. Stirred using broken calabash 5. Packaged
Improvement No=99.7% in Ph, moisture, Product Nil Nil Yes=0.3% colour and smoothness
Yes=47.5% CS and HQCF No=52.5% performing Yes other functions Functional Peeling cassava=78.3% Nil Nil in the chain Peeling&cutting=1.4% like cassava Peeling&uprooting=1.4% cultivation Uprooting=18.9%
Production Inter-chain Nil Nil Nil of Co2 and Ethanol
Source: Field survey, 2016 b. Agbelima processor The majority (73.3%) of agbelima the value chain and not performing processors in the study area use the additional value addition. traditional processing technique. This c. Gari processor: includes stone pressing of the milled The majority (76.7%) of gari processors cassava. Only 26.7% of agbelima in the study area use traditional processors use modernized and improved processing techniques (Table 6). This technologies, like cassava pressor includes stone pressing of the milled (57.3%) and improved knowledge cassava. Only 23.3% of gari processors (42.7%). There is no improvement on use modernized and improved product quality and no innovations to technologies. These include use of improve product quality. Agbelima cassava pressor (58.8%), gas stoves processors are on the same stage of (10%) improved knowledge (31.2%). 72 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
There is no improvement on product is at the same stage of the value chain. quality and no innovations to improve 1.1.3 Extent of market power product quality. Gari processors are on (concentration) along the cassava the same stage of the value chain and not value chains performing additional value addition. Table 7 presents the estimated d. High-quality cassava flour Herfindahl-Hirschman Index (HHI), processor which measure the extent of market High-quality cassava flour processors power (or concentration) for the use modern and advanced processing different actor groups. The estimated techniques. There is product HHI shows that there is a high degree upgrading. Product upgrading is of fragmentation of cassava production through improvements on acid (pH) activities. Thus, the production of content, moisture content, colour and cassava is highly unconcentrated. The smoothness. There is also inter-chain estimated Herfindahl-Hirschman Index upgrading. This is because one high- (HHI) of 52.18 suggests that a farmer quality cassava flour processor has may not have the power to influence moved to a higher stage of the value price and quantity supplied to the chain and performing additional value market. Also, the low HHI estimates for addition such as the production of gari and agbelima processors suggest ethanol and carbon dioxide. Another that these actors may also not have the high quality cassava processor is also power to influence the price of gari and processing industrial flour and cassava agbelima. pressed cake (Table 6). However, the market for cassava e. Cassava starch processor: starch, cake and high quality flour Cassava starch processor also use is highly concentrated. The high advanced processing techniques (Table Herfindahl-Hirschman Index of 6). There is improvement on product 3987.73 suggests that a value chain quality. There is product upgrading actor in this market could influence the through improvements in pH, moisture price and quantity of the product. There content, colour and smoothness. There could be an abuse of market power by is no inter-chain upgrading and the actor the leading chain actors. TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 73
Table 7: Degree of concentration
Market share (%) Herfindahl Level of concentration Chain actor Mean Std. dev -Hirschman Index of the cassava market Unconcentrated Farmer 0.33 0.2514 52.18 market Unconcentrated Gari processor 1.67 1.1698 247.40 market Agbelima Unconcentrated 1.67 0.6996 195.54 processor market Cassava starch and Highly concentrated 25.00 22.2691 3987.73 flour processor market Source: Estimated from field survey data, 2016
CONCLUSION AND most important market channel for RECOMMENDATION smallholder farmers. The market The study attempted to analyse the channels for large-scale producers and level of trust, governance structure, outgrowers include ethanol, cassava product upgrading and the extent of starch, industrial flour and high quality market concentration (power) of the flour processors. The presence of cassava value chain in Ghana, using vertical integration in the value chain data collected from sampled farmers, by the key participants engaged in both small and large scale processors along the processing of value-added activities the cassava value chain. Percentages and cultivation of cassava, is to secure were used to describe the level of the source of their raw material for trust, governance structure and processing activities. product upgrading and the Herfindahl- The results found that the levels Hirschman Index (HHI) was used to of trust relationship along the cassava measure the extent of market power value chain are mixed. While some (or concentration) in the cassava value of the indicators suggest high trust chains. relationships among actors along the The study found that there chain, others suggest otherwise. Among are about 21 market channels in the the various indicators of trust, the study cassava value chains in Ghana. Gari revealed that the majority of cassava and agbelima processing present the farmers and agbelima processors are 74 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
in a verbal contract with their buyers, The type of governance existing suggesting a high trust relationship. between cassava farmers and their Processors of high quality cassava flour, buyers is generally captive, which means cassava cake and cassava starch cake that other chain actors could exploit engage in written contracts with their farmers. On the other hand, the type of buyers. This is also an indication of a governance existing between gari and low trust relationship. The majority of agbelima processors and their buyers value chain actors have been in trading is generally the market governance relationship for more than two years structure. This implies that other actors and do not receive payment for their cannot exploit the gari and agbelima products on the spot. processors. The findings also suggest These are also indication of high that a modular governance structure trust relations. The majority (90%) of exists between the processors of cassava farmers do not receive assistance from starch, cake and high quality flour and chain actors on new technology. Only their buyers. This implies there can be about 10%, 27% and 23% of farmers, no exploitation by their buyers. There agbelima processors and gari processors, is low process and product upgrading respectively, receive assistance on new among smallholder farmers, while there technology, all indicative of low trust is high process upgrading by large- relationships. On the other hand, all scale producers. The study found out cassava starch and high quality flour that the majority of gari and agbelima processors receive assistance on new processors use traditional processing technology and this shows high trust techniques. However, there is product, relationship. All the actors along the process, functional and inter-chain cassava value chain communicate upgrading among high quality cassava frequently with their buyers through flour processors. The estimates of the formal and informal methods. These Herfindahl-Hirschman Index (HHI) for include the use of mobile phones, face- the cassava farmers, agbelima and gari to-face interactions and written letters. processors are low, showingactivities of This is indicative to high trust relations. these actors are highly defragmented. In addition, the study revealed that Its implication is that it is not possible prices are generally determined through for a cassava farmer, agbelima and negotiation. Very few chain actors gari processor to influence the price stated that the buyer or seller imposes of their respective products. However, prices on them. the estimate of the HHI for Cassava TRUST, GOVERNANCE, UPGRADING AND MARKET POWER 75
starch and high-quality cassava flour cassava-derived product value chains processors is very high, anindication for these chain actors. of a highly concentrated market, where Farmers, gari and agbelima lead actors can influence the price of the processors should be given technical product sold on this market. and credit support, which could be done The study recommends that the through integrating these chain actors policy to increase production should into a network of service providers. focus on improving the capacity of gari Through this, farmers, gari and agbelima and agbelima processors who represent processors will have access to credit a less concentrated segment of the value and improved technology. It is also chain and a major market for smallholder important to institute programmes to farmers. There is the need to modernize improve the capacity of farmers to meet smallholder cassava cultivation and the the business transaction requirements. processing of gari and agbelima through The producers of cassava starch should improved technology. The continuous diversify their product and client base use of traditional techniques does not for sustainable production. improve process upgrading in the 76 TRUST, GOVERNANCE, UPGRADING AND MARKET POWER
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Overview of the Sweetpotato Value Chain in Ghana
Wie Prosper1, Robert Aidoo1, Ohene-Yankyera Kwasi1 and Arne Wangle2 1Department of Agricultural Economics, Agribusiness and Extension, Kwame Nkrumah University of science and technology (KNUST), Kumasi, Ghana 2National Food Institute, Technical University of Denmark (DTU), Denmark
Abstract at the processing node of the value This study was aimed at chain, limited working capital, limited examining the sweetpotato value chain access to credit and high perishability and constraints faced by actors along of produce are the most constraining the chain using Fanteakwa (Southern sector) and West Mamprusi (Northern factors. Policies and strategies aimed sector) districts as case study. Data was at improving the storability of the crop, elicited from 200 producers, 100 traders access to credit and information as and 80 processors who were drawn well as stronger coordination among through simple random, accidental actors in the chain are recommended and snowballing sampling techniques. to improve value chain visibility and Value chain mapping exercise revealed sustainability. that the sweetpotato value chain in Ghana is buyer-driven and governed INTRODUCTION largely by collectors who have capital One of the neglected (orphan) crops in advantage. However, the chain is the country is sweet potato. Like other characterized by weak coordination root and tuber crops, sweet potato is a among the key actors and high degree food security crop which contributes not of information asymetry. Producers are only to calorie intake but employment faced with high cost of chemical inputs, creation, income and poverty alleviation in production and distribution centers. poor road network to farms and high A number of farmers are involved in the cost of labour as constraints. Traders production of the crop in some Southern are constrained by high transport and Northern Regions of Ghana. Due cost, inadequate storage facilities and to its short gestation period, it can be high post-harvest losses. However, Overview of the Sweetpotato Value Chain in Ghana 81
cultivated three times in a calendar High perishability of the crop is also year by farmers serving as a constant seen as the main issue which has made and stable source of income for them. the development of the crop’s value The marketing and distribution as chain sluggish. The crop potentially well as processing of sweet potato can be cropped at least three times have generated employment to many yearly. However, heavy dependence households especially women, and on rains rather than irrigation has made livelihoods to such households largely the crop seasonal, reducing its cropping depend on the crop. potential. Also, limited utilization base Nutritionally, the crop is (few products currently made from the considered to be a well-balanced major crop) and knowledge in the processing plant food with a good ratio between of already existent products cannot be protein and calories, and has substantial gainsaid since the only known products amounts of vitamins, especially Vitamin from the crop are boiled, fried and roasted C, minerals, and trace elements. Due to forms with the fried form dominating its correct balance between protein and the local processing business. Limited calories, it is considered a good weaning coordination among actors in the value food for growing children (Berga et al., chain has made the value chain of sweet 1993). Whilst potentially the crop is potato less developed. recognized as being widely versatile in This paper addresses the following its uses, substantial risks and constraints research questions: of production and marketing have 1. Who are the major actors along caused the sector to remain relatively the sweet potato value chain in sluggish in terms of productivity and Ghana and what roles do they value chain development. play? Thiele et al. (2009) assert that 2. How is the sweet potato value significant issues confronting the chain in Ghana governed? sweet potato value chain are; Limited 3. What are the constraints faced access to quality planting materials and by actors along the sweet other production inputs due to the use potato value chain in Ghana? of vegetative method of propagation. METHODOLOGY There is also limited market for the crop The study was conducted in the as it competes with other prominent Fanteakwa and West Mamprusi districts root and tuber crops like yam which is of the Eastern and Northern regions of a much accepted alternative to the crop. 82 Overview of the Sweetpotato Value Chain in Ghana
Ghana respectively. They were selected to select four (4) communities from because of their prominence when it each district for selection of producers comes to the production of the sweet through balloting. Farmers in the potato. selected communities were then selected Data and sampling by way of simple random sampling Primary data formed the core of the approach using the village farmers’ list data used for this study. The data was from the AEAs and the random number obtained from farmers, processors and table was used to reduce selection marketers (traders) within the study biases significantly. Communities areas. The study used information on selected from the Fanteakwa district sweet potato production, sweet potato were Asadja, Asadja Proper, Akonta marketing, and constraints associated No. 2 and Asetey. With regards to the with activities along the chain. The West Mamprusi district, farmers were formal survey was preceded by an selected from Gabgini, Katabanawa, informal survey to obtain qualitative Nayoko and Tinguri. data on actors along the sweet potato Markets and communities used to value chain through Focus Group select traders and processors were Discussions (FGDs). Primary data purposively selected with areas of from the key actors were however high concentration given highest supplemented with secondary data from priority. A combination of accidental the District Agricultural Development and snowballing techniques were used Units (DADU) of the study areas. to select marketers/traders based on The population of the study was referrals from initial subjects. This all sweet potato farmers, processors approach was used due to the difficulty and traders in the Fanteakwa and West in getting a sampling frame at this level Mamprusi districts. A total of Three since initial survey conducted indicated Hundred and Eighty (380) respondents that traders had weak or non-existent were selected for the study comprising associations where such information Two Hundred (200) sweet potato could easily be acquired. Processors farmers, Eighty (80) processors and one were also selected using the accidental hundred (100) traders. With the aid of and snowballing sampling approach Agricultural Extension Agents (AEAs), since there are no official and formal a list of major production communities institutions where a list of the target was prepared, after which a simple (processors) could be obtained. With random sampling technique was used this, respondents were interviewed Overview of the Sweetpotato Value Chain in Ghana 83 as and when they were identified and Tables 1 and 2 present the sample willing to participate in the survey sizes for the traders and processors after which they referred enumerators drawn from various communities/ to other processors within that vicinity. markets. Table 1: Sample Distribution of Traders by Community/Market
District Community/Market Sample Size Agomanya 12 Ashongmang 10 Begoro 15 Fanteakwa Ehiamanhyene 13 Total 50 Katabanawa 10 Nayoko 13 Tinguri 12 West Mamprusi Walewale 15 Total 50 Source: Field survey, 2015. Table 2: Sample Distribution of Processors by Community District Community/Market Sample Size Ehiamanhyene 10 Fanteakwa Begoro 10 Agomenya 10 Ashongmang 10 Total 40 Katabanawa 10 Mamprusi West Nayoko 10 Tinguri 10 Walewale 10 Total 40 Source: Field survey, 2015. 84 Overview of the Sweetpotato Value Chain in Ghana
The preparatory phase of the study primary data regarding the general involved introductory visits to the nature of sweet potato production and District Agricultural Units where marketing since farmers also sold their discussions were held with the District produce. Enumerators were however Agric. Development Officers (D. D. dropped in groups at vantage market Os). Also, visits were made to research places and communities for them to institutions (i.e. CRI and SARI) to identify traders and processors in no find out available varieties of sweet systematic format given the delicate potato cultivated and the prominent nature and the difficult nature of getting areas of production. Through these these actors. Enumerators therefore consultations, areas for the study interviewed traders and processors who were identified. At the same time, were willing and ready to cooperate and discussions were held with market partake in the study. leaders in these areas to understand Method of Data Analysis sweet potato marketing activities in A combination of descriptive these markets. These visits contributed tremendously in the design of the statistics, value chain mapping and questionnaire,sampling strategy and simple narrations were employed to the subsequent administration of summarize the data collected from the questionnaires. The draft questionnaire sweet potato value chain actors. The was pretested in one community study employed frequency distribution (Asadja) and the Begoro market in the tables, proportions, arithmetic mean Fanteakwa district for the necessary and standard deviation to organize inputs to be made to make up a final and summarize the characteristics of complete structured questionnaire for the respondents as well as to identify the main survey. The final structured constraints faced by chain actors. The questionnaire was used to collect the value chain map was used to show the primary data needed for the study distribution channels for sweet potato through personal interviews. In and the interrelationships among the addition Focus Group Discussions actors in the chain. As an agricultural (FGDs) were also held in each commodity like sweet potato moves community particularly with farmers through various channels to the final with a minimum of five (5) farmers consumer, transactions take place participating. Focus group discussion among multiple chain actors, cost are guides were used as a tool for collecting incurred, money and information are Overview of the Sweetpotato Value Chain in Ghana 85
exchanged and value is progressively study revealed that, whereas there was added. To identify the key players in male dominance at the production stage, the chain and their interrelationships, there was female dominance at the a value chain map was generated from processing and marketing stages of the the field data. Mapping value chain sweet potato value chain. Actors along helps to get a better understanding the sweet potato value chain were in of connections between actors and the economically active age bracket of processes and interdependency between 30 and 50years. With regards to among actors and processes in a value the level of education, chain actors had chain. This exercise was carried out generally low level of education; they in qualitative and quantitative terms had attained basic level or never been through graphs, presenting the various to school. Majority (54%) of producers in the sweet potato value chain operated chain actors, their linkages and all the on their own farm lands and recorded operations of the chain from production an average output of 25 bags (109kg level through traders (collectors, per bag) from an average farm size of wholesalers and retailers) to processors 2 acres. With regards to membership of and finally to the consumer. an association, only 26% of producer, Findings 28% of traders and 11% of processors Demographic characteristics of belonged to associations. Value chain respondents actors were found to have limited Respondent characteristics have access to credit. Majority of chain been provided in Tables 3 to 5. The actors (>85%) financed their activities with their own funds. 86 Overview of the Sweetpotato Value Chain in Ghana
Table 3a: Socio-demographic characteristics of Producers Fanteakwa West Mamprusi (n=100) (n=100) All (N=200) Variables % % Freq. % Male 71 87 158 79 Sex Female 29 13 42 21 Never been to school 26 63 89 44.5 Basic 68 19 87 43.5 Educational Level Secondary 6 16 22 11 Tertiary 0 2 2 1 Single 14 7 21 10.5 Married 75 91 166 83 Marital Status Separated 2 0 2 1 Widowed 9 2 11 5.5 Own land 27 80 107 53.5
Land Family land 15 16 31 15.5 Tenure Arrangement Share cropping 53 0 53 26.5 Renting 5 4 9 4.5
Access to Yes 32 74 106 53 Extension No 68 26 94 47 Membership Yes 0 52 52 26 of a Co-operative No 100 48 148 74 Access Yes 14 17 31 15.5 to Credit No 86 83 169 84.5 Own funds 86 83 169 84.5 Friends/Relative 10 7 17 8.5 Source Financial of Funding institutions 3 10 13 6.5 Private money lenders 1 0 1 0.5 Source; Field survey, 2015 Majority (53%) of farmers in West Mamprusi due to the generally poor the Fanteakwa district practiced soil conditions in the Northern region sharecropping system due to the fact that of the country. It was realized from the they are farmers from Krobo land who study that majority (74%) of farmer in have come to settle in the Fanteakwa the West Mamprusi district compared district. There was considerable use of to their compatriots in the Fanteakwa fertilizer in the cultivation of the crop in district (32%) had access to extension Overview of the Sweetpotato Value Chain in Ghana 87
services. This was not very surprising agents in the West Mamprusi district since the study further revealed that is likely to be easier than those in the 52% of farmers in the West Mamprusi Fanteakwa since farmers could easily district were members of Farmer Based be organized under the supervision of Organizations (FBOs), a situation that FBO leaders in the former for training was almost absent in the Fanteakwa sessions to be offered to members in district. Information dissemination for groups than on individual basis. Table 3b: Socio-demographic characteristics of Producers
Fanteakwa (n=100) West Mamprusi Total (N=200) Variables (n=100) Mean Std. Dev. Mean Std. Dev. Mean Std. Dev. Age (years) 42.99 14.34 37.82 11.69 40.41 13.31 Years of schooling 7.48 2.62 9.1842 3.42 8.053 3.0054 Household size 5.8 2.91 8.28 4.6 7.04 4.032 Distance to 1.6 1.076 2.584 1.97 2.092 1.65 farm (km) Years of SP 14.36 9.17 6.6 5.45 10.48 8.47 farming Farm size 2.2825 1.77 1.2875 0.67 1.785 1.42 of SP (acres) Output 23.095 14.52 26.02 16.31 24.55 15.47 (109kg bag) Extension 2.1481 1.026 3.1067 1.58 2.8529 1.51 Contact Amount saved last 571.5556 469.029 241.1236 190.37 407.26 394.16 season (GHȼ) Credit received 576.42 517.32 286.47 75.74 417.41 374.89 last season (GHȼ) Price 93.7 12.28 65.88 11.0034 79.79 18.15 of SP (109kg) Income from 1899.8 1398.44 1274.82 645.84 1587.31 1130.74 SP (GHȼ) Profit for last 1310.9 1362.44 567.27 611.5 939.085 1117.33 season (GHȼ) Source; Field survey, 2015 Record keeping is very important of farmers in the Fanteakwa indicated for success in agriculture. However, they kept records as compared to about records keeping was seen to be on the 35% of farmers in the West Mamprusi low (41%) with the main reason being district. From the study, majority (84%) farmers’ inability to write. Only 6% of farmers indicated that their main 88 Overview of the Sweetpotato Value Chain in Ghana
source of funding was from their own account, majority (74%) of farmers savings from previous season’s sale of from the pooled sample had no bank farm produce.Farmers in the Fanteakwa account which was not surprising districts made an average income of GHȼ looking at the proportion of farmers who 1899.80 from sweetpotato sales during indicated their main source of funding the 2014 cropping season as against an as financial institutions. Most financial average income of GHȼ 1274.00 for institutions demand that farmers own farmers in the West Mamprusi district. account (with some level of savings) as With regards to ownership of a bank a requirement for financial assistance. Overview of the Sweetpotato Value Chain in Ghana 89
Table 4a: Demographic and socioeconomic characteristics of Traders
West Fanteakwa Total Mamprusi (N=50) (N=100) Variables (N=50) % % Freq % Male 4 0 2 2 Sex Female 96 100 98 98 <30 16 14 15 15 Age 30-60 80 76 78 78 >60 4 10 7 7 Retailers 40 26 33 33 Type of Trader Wholesalers 30 46 38 38 Collectors 30 28 29 29 Never Been to School 30 92 61 61 Educational Basic 68 8 38 38 Level Secondary 2 0 1 1 Tertiary 0 0 0 0 Fellow Traders 54 48 51 51 Target Processors 8 42 25 25 Customer Consumers 38 10 24 24 Main District Market 74 88 81 81 Main Point Market Within District 10 12 11 11 of Sale Market Outside District 16 0 8 8 Trade in Other Yes 52 44 48 48 Commodities No 48 56 52 52 Membership Yes 42 14 28 28 of a Trader Association No 58 86 72 72 Awareness of Yes 74 38 56 56 SP Price Information No 26 62 44 44 Source; Field Survey, 2015 90 Overview of the Sweetpotato Value Chain in Ghana
Table 4b: Demographic and socioeconomic characteristics of Traders
Fanteakwa (n=50) West Mamprusi (n=50) Total (N=100) Variables Mean Std. Dev. Mean Std. Dev. Mean Std. Dev. Age 42.12 10.63 42.5 12.57 42.31 11.58 Years of schooling 5.54 4.067 0.66 2.37 3.10 4.12 Household size 5.62 1.88 6.54 3.19 6.08 2.65 Total income 2336 1952.98 601 372.045 1468.50 1648.18 Distance 37.6795 80.58 4.525 2.19 20.044 57.28 Covered km Volumes of SP 12.945 13.89 4.16 2.61 8.55 10.88 handled per week Minimum capital 1676.2 1533.89 411.6 163.61 1043.90 1257.62 Requirement Entrance Fee 65 46.17 - - 65 46.17 Marketing cost 4188.74 4590.53 698.59 525.58 2443.66 3693.62 Unit Price 130.294 26.77 67.63 10.12 97.22 37.13 Total revenue 4937.56 5072.10 877.65 683.03 2907.60 4138.41 Profit (GHȼ) 748.82 982.021 179.06 190.35 463.94 759.75 Source; Field Survey, 2015 Table 5a: Demographic and socioeconomic characteristics of Processors Fanteakwa (n=40) West Mamprusi (n=40) Total (N=80) Variable Mean Std. Dev. Mean Std. Dev. Mean Std. Dev. Age (years) 38 6.51 34.40 7.67 36.2 7.30 Years of schooling 7.53 3.29 1.53 3.40 4.53 4.49 Household size 4.88 1.67 6.25 2.26 5.56 2.092 Average 3.91 4.59 2.77 1.26 3.32 3.33 distance (km) Total income f 1310.45 846.44 683.75 212.85 997.10 689.56 rom SP (GHȼ) Years of sweet 7.15 3.94 4.33 2.27 5.74 3.49 potato processing Unit Price/slice 0.2 0 0.10 0.016 0.15 0.050 of fried SP (GHȼ) Credit received for SP 1266.67 1342.63 - - 1266.67 1342.63 processing (GHȼ) Average processing cost 64.85 22.83 57.90 11.57 61.37 18.32 /cycle (GHȼ) Average 46.99 63.14 42.77 34.17 44.88 50.49 Profit/cycle (GHȼ) Source; Field Survey, 2015. Overview of the Sweetpotato Value Chain in Ghana 91
Table 5b: Demographic and socioeconomic characteristics of Processors
Fanteakwa West Mamprusi Total (N=80) (n=40) (n=40) Variables % % Freq % <30 7.5 22.5 12 15 Age 30-60 92.5 77.5 68 85 Never been to 12.5 80 37 46 Educational school Level Basic 83 17.5 40 50 Secondary 5 2.5 3 4 Processing more Yes 10 62.5 65 81 than one commodity No 0 37.5 15 19 Membership of Yes 0 22.5 9 11 Association No 100 77.5 48 89 Farm gate 10 10 8 10 Main Point of Collector 23 20 17 21 SP Procurement Wholesaler 30 15 18 23 Retailer 37 55 37 46 Spot trade 100 100 80 100 Mode of Contractual Marketing 0 0 0 0 arrangement Own equity 95 97.5 77 96 Main Capital Credit union 5 0 2 2.5 Source Susu Scheme 0 2.5 1 1.5 No savings 7 12.5 8 10 At home 45 72.5 47 58 Place of Savings Bank 28 0 11 14 Credit union 10 0 4 5 Susu scheme 10 15 10 13 Yes 15 0 6 7 Access to Credit No 85 100 74 93 Source; Field Survey, 2015 92 Overview of the Sweetpotato Value Chain in Ghana
Value Chain Analysis NGOs, Finanxial institutions and Value Chain Map of Sweet Potato Research Institutes. A two-way flow in Ghana of information occurs where service The value chain map of sweet potato providers receive feedback from in Ghana generated from the study producers and vice versa. Producers is depicted in Figure 1. The various after production of sweet potato have a actors in the value chain are depicted number of alternative channels through and the various distributional channels which they can sell their produce. It was of the flow of sweet potato to the final realized from the study that, majority consumer illustrated. From the map, it (65.5%) of producers sold their produce can be seen that producers mainly enjoy to collectors who mainly buy sweet support services such as input supply, potato from the farm gate with 30.5% financial assistance and extension of producers selling to wholesalers and educational programmes on innovative only 1.5% selling directly to retailers. technologies from service providers Less than 2% of producers sold directly such as MoFA, private input dealers, to processors and consumers. Figure 1: Value Chain Map for Sweet Potato in Ghana
2.0% 1.0% CONSUMERS 40.0% 60.0% 100.0%% 1.5% 2.0%% %%PROCESSORS
38.0% RETAILERS 60.0% WHOLESALERS % 20.0% 18.0% COLLECTORS 60.0% 30.5% 65.5% 1.5% PRODUCERS
SERVICE PROVIDERS [MoFA (AEAS), Private Input Dealers, NGOs, FIs, RIs]
Represents a two-way flow of information and technology Represents the physical flow of inputs and produce/products Source; Researchers’ own sketch based on Field data, 2015 Overview of the Sweetpotato Value Chain in Ghana 93
Majority (60%) of collectors sold their farm implements) essential at the produce to wholesalers, 20% sold to production stage. Sweet potato farmers processors and 18% sold to retailers. also participate in this stage of the value Only about 2% of collectors sold their chain particularly when it comes to sweet produce directly to final consumers. potato planting materials (vines) supply Wholesalers sold their produce to whilst training and actual multiplication retailers (60%) and processors (38%). of improved Sweet Potato vines was At the retailer level, however, 60% being facilitated by MoFA through its sold directly to sweet potato processors Agricultural Extension Agents (AEAs). and the remaining 40% sold to final Sweet potato producers are consumers. For processors, all of them the major actors who perform most (100%) sold their products directly to of the value chain functions right consumers in convenient and ready-to- from land preparation to farm inputs eat forms (roated or fried as chips). sourcing or procurement, through the primary production stage to post Value Chain Actors and their harvest handling and marketing. Some Roles notable post-harvest handling activities The Sweet Potato value chain map undertaken by producers include emphasizes the involvement of diverse sorting, grading, packing, storing, actors who participate directly or transportation, loading and unloading; indirectly in the value chain in Ghana. these are mostly done by the farmers The direct actors of a value chain are themselves if they send the produce those involved in actual activities along (sweet potato) to the market or traders the chain (input suppliers, producers, who go to the producing centers to buy traders, processors and consumers) at the farm gate. whilst the indirect actors can be said Traders in the value chain are to be actors who provide financial or those actors who basically ensure the non-financial support services, such as movement of the physical sweet potato credit agencies, government via MoFA, from the farm gate to processors or NGOs, Cooperatives, Researchers and final consumers. These actors are of extension agents (Kit et al., 2006). three types; collectors, wholesalers and Private input suppliers have been retailers. Collectors operate in assembly acknowledged by farmers as their markets and or farm gates to collect main source of input supply (especially sweet potato from farmers in village fertilizer, herbicides, pesticides and markets and from farms for the purpose 94 Overview of the Sweetpotato Value Chain in Ghana
of reselling to wholesalers and retailers. of sweet potato by processors are the They use their financial resources and wholesale and retail points. The main their local knowledge to bulk sweet activity performed at this stage includes potato from the surrounding area. They sorting of produce, peeling, washing, play an important role and they do know frying, boiling and packaging for sale to areas of surpluses well. Wholesalers consumers. This role is mainly tailored are involved in buying sweet potato at making the product convenient and mainly from collectors (and a few from ready-to-eat with the purpose of a producers) in larger volumes than any target market which is mostly location other actor and supply them to retailers, specific. processors and consumers. They also The provision of services such store produce, usually for a maximum as training and extension, information, of four (4) days. Wholesale markets are financial and research services are the main assembly centers for sweet the preserve of the supporting actors. potato produced in surrounding areas These supporting service providers from where collectors aggragate and in the sweet potato value chain are deliver the produce. They have better MoFA, private input dealers, NGOs, storage, transport and communication Financial Institutions and Research facilities than other traders. Institutions. Most of the training given Retailer involvement in the are at the producer level of the chain chain includes buying of sweet potato and these training programs are usually from wholesalers, transport to retail undertaken by MoFA through their points, grading, displaying and selling extension agents at the community to processors and final consumers. level. Such periodic training programs Retailers are the last trader link between focus on both pre – and post-harvest producers and consumers. They mostly activities and marketing. buy from wholesalers and sell to urban Governance of the Sweet processors and consumers. They are Potato Value Chain. The facilitation very key when it comes to the transfer role of value chain is performed of feedback information on consumer mainly by dominant actors. This is preferences.Processors are very vital done mainly through the movement in the value chain due to their role of the commodities and price setting in changing the physical form of the mechanisms. Generally, the governance produce whilst improving the shelf structure of the sweet potato value chain life of the crop. The points of purchase in Ghana is buyer-driven in nature. Overview of the Sweetpotato Value Chain in Ghana 95
The lead actors in the value chain are linking up with fellow collectors) are collectors and wholesalers. Markets at quite common in the chain, especially Walewale, Agomanya, Ehiamankyene during procurement and transportion and Achiaman are heavily dependent on of goods. Conflicts or disagreement collectors who determine the volumes between producers and traders are supplied and ultimately price. encounted periodically in major They set the mode of operation markets. Whilst farmers blame traders and rules of engagement in these for offering very low prices for their markets for other chain actors to follow. produce, traders also blame farmers Their market power is displayed amidst for not providing adequate produce a very high degree of informality in with the right quality specifications. the sweetpotato market where there Farmers are mainly smallholders and is very weak coordination. In most are not very organized when it comes instances, the relationship among to marketing of their produce. They the key actors is one of a free market are therefore price takers and hardly exchange which is not coordinated. As negotiate for improved prices. The a result of the poor information flow governance structure of the sweet and the high perishability of the crop potato value chain was observed to be (coupled with poor storage systems), similar across the two districts. primary producers have very minimal Constraints along the Sweet bargaining power. Potato Value Chain. The value chains The use of standard weighing of perishable and semi-perishable system for transaction and price commodities like sweet potato are determination is virtually absent. reported to be constrained by large post- Unstandardized bags (sacks) are used harvest losses and inefficient value chain for pricing with standard weighing management. These constraints are not scale. This exposes farmers to cheating, just at a particular level but along the given their weak bargaining position. entire value chain. The study therefore Vertical linkages among value chain sought to independently identify the actors is virtually non-existent due to various constraints faced by different the mistrust among the actors, and this actors along the sweet potato value has led to virtually no transaction based chain in Ghana.Producers identified on signed contractual arrangement. and agreed to a number of constraints However, horizontal linkages among presented to them after they were asked traders of the same type (i.e. collectors to rank the constraints based on a five 96 Overview of the Sweetpotato Value Chain in Ghana
point likert scale (1=strongly Agree ranking of the marketing constraints they and 5=Strongly Disagree). Table 6 face with a Kendall’s W value of 0.279 presents the key constraints faced at the which was significant at the 1% level. production node of the chain. Generally, Table 7 presents the major constraints high cost of chemical inputs, poor road encountered by traders in the sweet network, high cost of labour, limited potato value chain. From the study, it access to credit facilities and high was realized that high transportation labour requirement for the cultivation cost, inadequate storage facility, high of the crop were identified as the five post-harvest losses, poor road network most critical constraints that hinder the to produce source and limited capital effective production of sweet potato. were are the most pressing constraints Farmers were however indifferent hampering their role of traders along about access to land and chemical the value chain. The level of agreement inputs, unavailability of quality planting among the traders in their ranking of the material and inadequate storage constraints was weak (Kendall’s W = facilities as constraints. Although, 0.171) but significant at the 1% level. there was a weak agreement among Table 8 presents the constraints the various constraints identified with identified by processors along the sweet a Kendall’s W value of 0.107, this level potato value chain. Limited working of agreement was significant at the 1% capital for business, limited access level. With a Chronbach’s alpha value to credit, high perishability of raw of 0.677, the primary producers can be materials, poor storage facilities, high said to be about 67.7% consistent in processing cost and limited knowledge their ranking of the constraints. on new products were identified as Critical marketing constraints the most critical constraints facing identified by farmers were low processors in the value chain. There commodity price, poor road network was a 0.324 level of agreement among and long market distance. However, processors in their ranking of the farmers from the Fantekwa and West constraints as seen from the Kendall’s Mamprusi districts disagreed entirely W test which was significant at 1% that there was low demand for the level. The test of reliability and internal produce. The relative high demand may consistency conducted revealed that the be as a result of the low price offered constraints were internally consistent by traders for the produce. There was (Chronbach alpha= 0.569). agreement among the producers in their Overview of the Sweetpotato Value Chain in Ghana 97
Table 6: Constraints faced by Sweet Potato Producer Fanteakwa West Mamprusi Production Constraints* Pooled(N=200) (n=100) (n=100) High cost of chemical inputs 1.61 1.66 1.64 Poor road network 1.06 2.35 1.71 High cost of labour 1.59 1.89 1.74 Limited access to credit facilities 1.29 2.21 1.75 High labour requirement 1.78 1.98 1.88 High interest rate on credit 1.51 2.27 1.89 High incidence of pest and 2.3 1.59 1.95 diseases Erratic rainfall pattern 2.65 1.63 2.14 Poor/declining soil fertility 2.32 2.14 2.23 High cost of planting material 2.36 2.12 2.24 High weeds infestation 1.99 2.53 2.26 High level of losses 2.71 2.15 2.43 Limited access to extension services 1.71 3.2 2.46 Inadequate storage facilities 2.55 2.5 2.53 Unavailability of quality planting material 2.92 2.62 2.77 Limited access to chemical inputs 2.5 3.03 2.77 Limited access to land 2.64 3.6 3.12 Kendall’s W=0.107; Chi-square=341.171; df= 16; Sig. 0.000; Chronbach’s alpha = 0.677
Marketing Constraints Low commodity price 1.3 1.84 1.57 Poor road network 1.1 2.21 1.66 Long market distance 1.67 2.42 2.045 Inadequate storage facility 2.26 2.31 2.29 High transport cost 2.53 2.1 2.32 Poor linkage with value chain actors 2.66 2.28 2.47 Inadequate market information 2.04 3.12 2.58 High market toll 3.31 2.93 3.12 Low commodity demand 3.63 3.74 3.69 Kendall’s W=0.279; Chi-square=446.473; df=8; Sig. 0.000; Chronbach’s alpha = 0.484
* Ranking scale: 1=Strongly Agree; 2=Agree; 3=Neutral; 4=Disagree; 5=Strongly Disagree. Source; Field Survey, 2015 98 Overview of the Sweetpotato Value Chain in Ghana
Table 7: Constraints of Sweet Potato Traders Fanteakwa Pooled Constraints* West Mamprusi (n=50) (n=50) (N=100) High transport cost 1.62 1.64 1.63 Inadequate storage facility 2.32 1.8 2.06 High post-harvest losses 2.52 1.76 2.14 Poor road network to 1.94 2.38 2.16 produce source Limited working capital 2.02 2.38 2.20 Inadequate market 2.66 1.78 2.22 information Long market distances 2.36 2.14 2.25 High market toll/tax 2.42 2.24 2.33 Poor linkage with value 2.74 1.92 2.33 chain actors Low demand for 3.72 4.18 3.95 commodity Kendall’s W=0.171 ;Chi-square=154.13; df=8, Sig. 0.000; Chonbach’s alpha = 0.541 * Ranking scale: 1=Strongly Agree; 2=Agree; 3=Neutral; 4=Disagree; 5=Strongly Disagree. Source; Field Survey, 2015 Table 8: Constraints of Sweet Potato Processors Fanteakwa West Mamprusi Constraints* Pooled (N=80) (n=40) (n=40) Limited working capital 1.625 1.10 1.36 for business Limited access to credit 1.875 1.20 1.54 High perishability of 1.975 1.425 1.70 raw material Poor storage facilities of products 2.2 1.625 1.91 High processing cost 2.8 1.20 2.00 Poor road network to 2.875 2.025 2.45 produce source High transport cost 2.875 2.10 2.49 Low product price 2.2 2.95 2.58 Inadequate storage facility 3.1 2.825 2.96 High market toll/tax 2.8 3.40 3.10 Low demand for 3.75 3.45 3.60 processed product Kendall’s W=0.324 ;Chi-square=284.759 ; df=11; Sig. 0.000; Chronbach’s alpha = 0.569 * Ranking scale: 1=Strongly Agree; 2=Agree; 3=Neutral; 4=Disagree; 5=Strongly Disagree. Source; Field Survey, 2015 Overview of the Sweetpotato Value Chain in Ghana 99
Conclusion producers during negotiations since The study examined the sweetpotao delay in sales could lead to high levels value chain in terms of roles of actors, of post-harvest losses. The main actors governance structure and constraints providing support services to the core faced at every node of the chain. actors in the sweet potato value chain The study has revealed that fresh in Ghana are the Extension Unit of sweetpotatoes produced by farmers are the Ministry of Food and Agriculture taken through several intermediaries (MoFA), research institutes like SARI, (collectors, wholesalers, processors and and informal credit suppliers and rural retailers) with little value addition in banks. the form of cleaning, sorting, grading, Constraints identified to be most packaging, storage and transportation crucial to the production of sweet before reaching end-users who are potato were high cost of chemical largely located in urban centers. The inputs, poor road network to farms, intermediate buyers obtain sweet potato high cost of labour, and limited from farmers at about GHȼ80.00 per access to credit as well as high labour 109kg and sell same to consumers at requirement for production. At the a price of about GHȼ97.00 per 109kg. marketing/distribution node of the The main point of substantial value chain, high transport cost, inadequate addition occurs at the processor node of storage facilities, high post-harvest the chain where actual transformation losses, poor road network to producing of the produce from raw form into centers and limited capital for sweet sliced and fried forms takes place. potato trading are common constraints. The absence of contract arrangements, However, processors were faced with functional co-operatives and limited the constraints of limited working access to information is widespread in capital, limited access to credit, high the value chain leading to very weak level of losses and poor storability of coordination among key actors. As a processed products. consequence, the sweet potato value Improved access to credit is likely chain in Ghana is largely buyer-driven to strengthen the activities of actors along with traders virtually dictating price the value chain since limited capital was even though there is a semblance of a common constraint faced by actors negotiation with primary producers. at all nodes of the sweet potato value The highly perishable nature of sweet chain. Also, research efforts should be potato further weakens the position of geared towards improving the shelf life 100 Overview of the Sweetpotato Value Chain in Ghana
of the crop through improved storage in the sweetpotato value chain are likely techniques and development of shelf- to improve visibility, coordination and stable products from the fresh produce. functionality of the chain for improved Improvement in communication and livelihoods of all actors. introduction of contract arrangements Overview of the Sweetpotato Value Chain in Ghana 101
REFERENCES
Berga MVD, Boosman M, Cucco I, Cuna L, Jansson N, Moustier P, Prota L, Purcell T, Smith D, Wijk SV (1993). Making Value Chain Work Better for the Poor: A tool book for practitioners of value chain analysis. CIP (2000). Sweetpotato. Research and impacts, International Potato Center (CIP). Http://www.Cgiar.Org. Retrieved on 23/12/2010. CIP (2006). Food and Agricultural Organization (FAO) (2002). FAO Statistics.Food and Agriculture Organization, Rome, Italy [http:www.apps.fao.org]. Orodho, A. B., Alela, B. O., & J. W. Wanambacha (1995). Use of sweet potato (Ipomoea batatas L.) vines as starter feed and partial milk replacer for calves. KARIKakamega, Kenya. Thiele G., Lynam J., Lemaga B. and J. Low (2009). Challenge theme paper 4: Sweetpotato value chains. International Potato Centre (CIP): Lima, Peru. 102
Resource-Use-Efficiency in Yam Production in Pru District of the Brong Ahafo Region, Ghana
*Franklin N. Mabe and Dominic Tasila Konja Department of Agricultural and Resource Economics Faculty of Agribusiness and Communication Sciences University for Development Studies Nyankpala Campus, Tamale *Corresponding Author: [email protected]
ABSTRACT farming experience, household size The study analyses resource-use- and age of the farmer. It was deduced efficiency in yam production among a that with the exception of age of a randomly selected sample of 120 yam farmer, household size and experience producers in ten communities within in farming significantly affect the the Pru District in the Brong Ahafo allocation of farm size positively in region of Ghana. The Cobb-Douglass the study area. It was also revealed that production function (Double-log) household size and farm experience was used to estimate the coefficients significantly affect the allocation of of the various variables analyzed and yam seeds positively. The analysis marginal-value-product as well as again affirms that household size and marginal-factor-cost used to estimate farming experience significantly affect the efficiency of resource use in yam the allocative efficiency of quantity of production. The regression results labour employed in yam production. showed that, farm size, labour, yam In this regard, an improvement in the seeds and household size significantly allocative efficiency of farm size, yam affects yam output. The results of the seeds, agrochemicals and labour would resource use efficiency computation surely raise output of yam. The study indicated that farm size (4.094) and yam therefore recommends an effective seed (1.827) were being under-utilized farm level training programmes whilst labour (0.952) was over-utilized aimed at empowering rural farmers on in the study area. Various determinants effective allocation of inputs used for of input efficiency include; education, Resource-Use-Efficiency in Yam Production in Pru District 103
yam production. This could be done tuber group are made up of crops through the design and implementation with high percentage of carbohydrate of tailor made extension programmes and they are used for many purposes on efficient allocation of inputs for in the world. The term root and tuber improvement of yam productivity. refers to any growing crops which store edible materials in subterranean INTRODUCTION root, corm or tuber (Oke, 1990). They The contribution of agricultural consist of cassava, yam, cocoyam and sector to the overall development of sweet potato. Yam (Dioscorea spp) is Ghana cannot be underscored. Over second to cassava as the most important the year, the agricultural sector which tropical root crop and is among the most employs majority of the labour force widely consumed staple food crops in has contributed significantly to the the tropics and sub-tropics (Okigbo and Gross Domestic Product (GDP) of Ogbonnaya, 2006). Ghana. The sector is the key to overall It is an important tuber crop in economic growth and development of Ghana and contributes about 16% of the the country and it is expected to lead the country’s Agricultural Gross Domestic growth and structural transformation Product (GDP) (Anaadumba, 2013). of the economy [Ministry of Food According to Anaadumba (2013), even and Agriculture (MoFA), 2010]. The though Ghana is the third larger producer sector is dominated by small scale of yam, it is the leading exporter of yam farmers widely scattered in the rural globally. The world’s largest producer of areas [Ghana Statistical Service (GSS), yam is Nigeria followed Cote d’Ivoire. 2013]. Agricultural production in In 2010, the foreign exchange earnings Ghana comprises the cultivation of tree of yam placed it third position amongst crops, root and tubers, legumes, cereals the nontraditional export commodities and vegetables. Not only that but also, in Ghana (Lopez-Montes et al., 2012). the rearing of livestock and poultry as The importance of yam in Ghanaian diet well as fishing and aquaculture are part cannot be downplayed because Food of agricultural sector in Ghana. and Agricultural Organization Statistics All the above mentioned [(FAOSTAT), 2012)] recorded 300 kcal subsectors contribute significantly to as the per capita consumption of yam the overall development of Ghana. in Ghana thereby making yam the third Root and tuber crops are cultivated most important source of energy to the by smallholder farmers. The root and general populace. 104 Resource-Use-Efficiency in Yam Production in Pru District
Also, the importance of yam is The main target of most government seen in its output value (Asante et al., intervention in the yam subsector 2014). Yam is a highly valued traditional has been to help farmers appreciate crop. New yam festivals are celebrated the significant impact of improved among many rural folks in West African technologies to yam productivity. The sub region. Yam is used as dowry for actual average yield of yam in 2013 marriage ceremonies in Ghana and stood at 16.27Mt/Ha, a figure which other West African countries. Also, is less than half of the potential yield. the crop is a good source of industrial Seed yam production does not currently starch. Yam is a remarkable stable exist on a commercial scale in Ghana in improving food security situation [Millennium Development Authority and hence it is currently attracting (MiDA), 2010]. Therefore, there is a tremendous attention by national and problem with the ability of farmers to international organizations in the world. allocate the factor inputs efficiently. Despite the economic contribution Little research has been carried out to of yam in Ghana and West African find out how efficiently inputs are used sub-region at large, its production and it is therefore crucial to research is highly expensive considering the on the resource-use efficiencies of input requirements. Osei-Adu et al., yam production using Pru District of (2016) noted that considering the high the Brong Ahafo Region of Ghana as labour demands for land preparation, a case. planting, staking, weeding, harvesting Low yam yields are often and transport to market, yam is the most attributed to the use of poor quality expensive among root and tuber crops planting materials and other in Ghana. Farmers spend so much on the unimproved technologies. Producing planting materials (seed yam) due to the yam in large quantities requires the low multiplication rate of yams (Aidoo efficient use of inputs (land, labour, et al., 2011). The use of fertilizer for fertilisers, stakes, fungicides and other yam production in Ghana is on the low factors of production) (Nchinda et al., side. Generally, the inputs used in yam 2016). Considering the fact that farmers production are very traditional thereby are not able to obtain the potential affecting its productivity. productivity levels, it is therefore There have been several prudent for researchers to ask many interventions by the government which questions. The possibility of achieving aim at increasing yam productivity. the potential yield can be linked to Resource-Use-Efficiency in Yam Production in Pru District 105
resource use efficiency. Efficiency is at Concept of Production the heart of researchers in production Function and Efficiency economics. This is because the scope of The production function is a agricultural production can be expanded nominal relationship showing the and sustained by farmers through technical transformation of inputs into efficient use of resources, hence the outputs. Production is a neoclassical concentration on allocative/resource- theory which looks at how efficient use efficiency can help farmers increase factor inputs are used to generate yam productivity. output. It depicts efficient combinations This research aims to generate of inputs and outputs. A production useful information for the Ministry function specifies the maximum of Food and Agriculture, especially attainable output that a given set the Crops Directorate for policy of inputs can produce. The implicit directions. The study provided relationship between output and inputs quantitative evidence that identified is expressed as: Y = f (X , Ԑ ) [1] the main determinants of productivity i j i of small-scale yam farmers so that, Where Yi is the quantity of output for policies can be designed to improve th th i farmer, Xji is the quantity of j input upon the level of efficiency based on th for i farmer and Ԑi is the error term the information available. Moreover, for ith farmer. The production function donor organizations and aid agencies shown in equation [1] above takes the that are supporting Ghana’s agricultural four different functional forms namely diversification programme and also linear, exponential, double-log and working to improve the livelihood of semi – log. rural dwellers will gain a lot of insight The concept of efficiency, as from this study, especially in the move defined by Farrell (1957) can be grouped towards efficient usage of farm inputs. into three namely, technical, allocative The study also added knowledge to the and economic efficiencies. Technical existing scanty literature on resource- efficiency is defined as the capability to use efficiency among yam farmers in achieve a higher level of output given Ghana. comparable levels of inputs. Allocative efficiency which is also called resource- use efficiency deals with the extent to which farmers make efficient decisions 106 Resource-Use-Efficiency in Yam Production in Pru District
by using inputs up to the level at one needs to estimate and compare which their marginal contribution to marginal value productivities (MVPs) production value is equal to the factor for each resource with their respective costs. The combination of technical and acquisition cost (MFC). Resource-use- allocative efficiencies gives economic efficiency (RUE) of each of the factor efficiency. The chief aim of resource use inputs (Xi) is estimated by the ratio of efficiency is to find ways of increasing value of marginal product (VMP) to
output per unit of input and achieving marginal factor cost (MFC or Px). desirable inter-firm, intra-firm and Determinants of Resource-Use inter-sector transfer of production Efficiency in Yam Production resources in order to provide the means It has been noted that yam of achieving economic level of living. productivity is declining in most Allocative Efficiency refers to the producing areas in the Sub-region ability to produce at a given level of due to high cost of inputs, inadequate output using the cost-minimizing input technology as well as poor soil fertility. combination. Allocative efficiency This is not the case in Ghana as most is related to the ability of the firm to yam producers have adopted the use choose its inputs in a cost minimizing of fertilizer in the production of yam way. It reflects whether a technically thereby enjoying slight increase in efficient firm produces at the lowest yam productivity. In table 1, it is clear possible cost. In order to determine the that yam productivity has increased by economic efficiency of the resources 1.97% from 2014 to 2015 in Ghana. used in yam production, the Marginal The differences in yam productivity Value Product (MVP) of each resource may be connected to inefficiency were compared with its marginal factor in the allocation of farms inputs, cost (MFC) and the efficiency indicators technologies used as well as differences computed. in socioeconomic characteristics of Production function is used in yam farmers (Nwosu and Okoli, 2010). the computation of MVPs of each of the It is very evident in several studies resources (inputs) with its MFC. The that inappropriate inputs mix in yam marginal value product (MVP) of an production translates into the quantity input is the additional value of output of yam output harvested. In agricultural that can be produced by employing one production, resource-use efficiency is more unit of that input, ceteris paribus. very vital especially in yam production To estimate resource-use efficiency, Resource-Use-Efficiency in Yam Production in Pru District 107
where inputs account greatly to the total of useful goods (Bervidova, 2001). cost of production. Achieving increases in yam production For instance, Reuben et al. according to Degras (1993) requires (2012), in their study on resource-use increasing allocative efficiency of efficiency in yam production in Taraba labour, intensification of use of land and state, Nigeria, revealed that labour and expansion of indigenous technology. land were over utilized and under- Household roles in crop production utilized respectively. Also, according is not static but tend to be dynamic in to Ekunwe et al. (2006), in their study response to pressure from the changing on resource-use efficiency in yam social, cultural and economic setting production in Delta and Kogi state, (Agwu and Chukwu, 2006). It is sufficing Nigeria, showed that land, yam seeds to say that labour use efficiency in crop and labour were under-utilized in yam production depends on household production. It has also been affirmed characteristics, production inputs, type by Maikasuwa and Ala (2013) that of labour used and labour wage (Durno fertilizer, labour and land were under- and Stuart, 2005). Interestingly, Anyiro utilized by women in yam production et al. (2012) revealed in their study that in Bosso State, Nigeria. A study by labour wage, household size, gender, Maikasuwa and Ala (2013) reveals age, educational level and farm size that the reources (fertilizer, labour and of yam farmers significantly affect the farm size) were all underutilized by allocative efficiency of labour in yam women yam farmers in Bosso Local production. Government Area of Niger Stata=e in The allocation of farm size affects Nigeria. This phenomenon can be linked the quantity of other variable inputs to the inability of women to get access required in yam production which to farm resources such as farm credit manifests into the quantity of yam and land to expand their production harvested. According to MoFA (2016), activity. This implies that farm credit yam occupied about 430197.69Ha of and access to land determines resource- the agriculture land in Ghana in 2015. use efficiency in yam production. The aggregate increased of farm land Efficiency of labour use as a production for crops production is dependent on factor is expressed by the level of labour individual farmers’ socio-economic productivity. Labour productivity characteristics. is regarded as technical efficiency In spite of the fact that yam seed of human work utilized in creation is a critical input in yam production, 108 Resource-Use-Efficiency in Yam Production in Pru District
it also limits number of acreage and and Nkoranza. The district is along the productivity level in production. Over Volta Lake and it covers an estimated allocation of yam seed in production land area of 2,195 kilometers square. intensively affects output hence the The District shares boundaries with East requirement for an efficient allocation Gonja District to the North, Sene district to maximize yam output. Farmers in to the East, Nkoranza and Atebubu- Sub-Sahara Africa generally rely on Amanten Districts to the south and informal sources of seeds, which is Kintampo North and Kintampo South selected from their harvest, resulting Districts to the West. The vegetation of into lower quality and quantity of final the study District consists of grassland, product (ARD, 2008). To overcome this wooded Savannah and ‘fringe forest’ challenge in yam production, farmers and hence can be put into forest are advised to prevent the attack of pests savannah transition zone. The district and diseases on yam seeds and also adopt experiences two seasons in a year, the the Yam Minisett Technology (YMT) wet season and the dry season. The available to improve the productivity environmental, climatic and soil are level of yam. suitable for yam production. A total of 10 communities within METHODOLOGY the district were also randomly Study area, Sampling Technique and Data Collection selected for the study. Lastly, 10 to 15 farmers from each of the 10 selected Cross-sectional primary data was communities were randomly sampled obtained for this study. A multi-stage and interviewed. The random sampling sampling method was used in this study. was done in such a way that each The study was conducted in Brong district, community and farmer was Ahafo which is the second leading yam respectively given equal chance of producing region in Ghana. Out of being included in the study. This was eight major yam producing districts in done using balloting where names of the region, Pru District was randomly selected districts, communities and selected for the study. Pru District is farmers were randomly picked from located in the North-Eastern portion of the respective sample frame. A sample Sunyani, the regional capital of Brong size of 120 farmers was obtained for Ahafo Ghana. The district capital is the study. Primary data was obtained Yeji which is about 310km from the with the help of semi-structured regional capital, Sunyani via Techiman questionnaire. Resource-Use-Efficiency in Yam Production in Pru District 109
Data Analysis The limitation of this model is that it SPSS version 17 was used for data assumes constant returns to scale (Cobb entry, cleaning and validation. The and Douglas, 1928). Following the data was then copied into excel and originators, Cobb and Douglas (1928), imported into Eviews. The descriptive Cobb-Douglas production function is analysis was done using excel and specified as: SPSS whereas Eviews was used for =6 b e i econometric analysis. Frequency a [2] i = 0 å i e tables, bar charts and pie charts were =1 employed to describe the age, marital
status, gender and the educational level Where; Yi = output of yam (100medium
of respondents. size tubers), Xj = inputs. The Cobb- Empirical Model Specification Douglas production function shown in Empirical output model equation [2] can be linearized by taking the natural logarithms on both sides. This study employs Cobb-Douglas Therefore, the empirical model used production function due to its simplicity for the study was specified as: and appropriateness to the data analysed.
ln =b0 +b1 ln 1i +b 2 ln 2i +b3 ln 3i +b4 ln 4i +b5 ln 5i +b6 ln 6i +ei [3]
Where ln= Natural logarithm, X1 = quantity of agrochemical in litres, X2 =
quantity of yam seed in (100sets), X3 = quantity of labour in man-days, X4 = farm
size in hectares, X5 = age in years, X6 = household size, β1 – β4= are the respective
parameter estimates for conventional inputs and β5 and β6 are parameter estimates for unconventional inputs age and household size respectively. The parameter estimates are elasticities and they defined the percentage change in quantity of yam produced as a result of a 1% change in the respective inputs. They can be used to estimate respective input use efficiencies.
Estimation of Resource- The production function shows the use efficiency maximum amount of the output The objective of the producer is that can be produced using different to maximize profit either by increasing combinations of variable factor inputs. the quantity of yam (Y) produced or Note that the quantity of yam produced by reducing the cost of production. is in physical units (100medium tubers) 110 Resource-Use-Efficiency in Yam Production in Pru District
and hence Y is also referred to as the product (MVP) to marginal factor cost total physical product (TPP). The (MFC or P ). The use of this ratio X marginal physical product (MPP) of an is based on the assumption that the input is the additional output that can be farmers operated in purely competitive produced by employing one more unit input markets (Olukosi and Ogungbile, of that input, ceteri paribus. 1989). When a double log functional Resource-use-efficiency (RUE) form is differentiated, input elasticities
of each of the factor inputs (Xi) is are obtained as shown below. estimated by the ratio of marginal value
d i
d ln i i b [4] = d = d ln i i