Revamping Ghana’s coffee production: smallholder perceptions, viability and constraints
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Abstract
Coffee contributes substantially to the economic wellbeing of smallholder farmers in Sub-Saharan Africa, but the production of this crop in Ghana remains underdeveloped and its great potential for enhancing the livelihoods of smallholder farmers remains unrealized. This study analyzed the viability of coffee plantation establishment to ascertain whether observed low coffee production in Ghana is because the production of the crop is financially and economically not viable. The primary data was collected from 133 coffee farmers and 150 non-coffee farmers using structured questionnaires. The analysis was conducted using the Perception index, discounted measures of project worth as well as Kendall’s coefficient of concordance. The results indicated that both coffee and non-coffee farmers have negative perceptions about coffee production in the country. Furthermore, coffee production in Ghana would be both financially [net present value (NPV) of GH¢ 1,437.19, benefit-cost ratio (BCR) of 1.39, and internal rate of returns (IRR) of 29.15%] and economically (NPV of GH¢ 697.86, BCR of 1.16, and IRR of 25.38%) viable at a discount rate of 30%. Finally, a poor marketing system was ranked as the major constraint to coffee production in Ghana. The study makes the following recommendations: Firstly, farmers and potential investors are encouraged to invest in coffee production in Ghana as an option to enhance their livelihoods. Secondly, policies aimed at addressing the challenges of coffee farmers in Ghana should be targeted more at establishing a viable internal coffee marketing system as well as lowering lending rate to farmers.
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