In late September 2020, President Akufo-Addo inaugurated the Tree Crop Development Authority (TCDA) at the Golden Bean Hotel in Kumasi, and to be headquartered in Kumasi. This is a private sector led public institution, whose primary mission is to develop and spearhead the country’s agenda for the diversification of Ghana’s agriculture by developing the tree crops sector, other than cocoa, which has seen tremendous development since the establishment of the Cocoa Marketing Board (now COCOBOD) in 1947.
The TCDA, is a body established by an Act of Parliament in 2019 (Act 1010), which is the legal and institutional regulatory structure for the development and marketing of six tree crops, namely, (a) Cashew, (b) Shea, (c) Mango, (d) Coconut, (e) Rubber, and (f) Oil Palm in Ghana. It is an outcome of the ruling NPP’s campaign promise in 2016, among others, to transform tree crops as major foreign exchange earners and establish a “Cashew Marketing Board” to regulate the industry just as it is done for cocoa to give farmers the best and stable producer prices in order to improve their livelihood (Citi 97.3, 2016).
The Financial Reward for Ghana Versus the Issue of Food Security
The tree crops industry has enormous potential as a major foreign exchange earner and wields tremendous economic potentials in Ghana’s Agricultural sector. According to some estimates, by 2028, potential earnings in the tree crop industry could reach about US$16 billion in yearly revenue, significantly reducing the unemployment rate, and generating substantial household income (The Tree Crops Development Authority, 2020)
According to one source, to enhance and develop the institutional structures of the tree crop industry, the TCDA, is poised to distribute a total of 11.7 million seedlings, comprising of 5 million Cashews, 100,000 Coffee, 40,000 Coconut, 5 million Oil Palm, 100,000 Mango and 1.5 million Rubber seedlings. It is expected that those will permit the establishment of some 88,918 hectares of plantations across 212 districts (Oxford, 2021).
In 2018, Ghana produced US$378 million worth of Cashew, an increase of 43.8% more than the previous year, and a 17-fold increase over the US$20 million revenue produced in 2009 (Oxford, 2021).
The industry fits seamlessly into the government’s Planting for Export and Rural Development (PERD) program, which is intended to improve Ghana’s over-reliance on cocoa as a foreign exchange earner by diversifying into the cultivation of those six selected tree crops.
It is estimated that more than 98% Ghana’s cashew nuts are exported in their raw form to India and Vietnam, where they are processed and re-exported to countries such as the US, Europe, China, the Middle East, and Australia. Thus, we may need to add more value before exporting them. Worldwide, demand for cashew nuts has grown at around 7% per annum, and it is forecasted to 29% of the global nut market sometime in this year, 2021 (Boafo & Lyons, 2019).
Some researchers argue that whereas the expansion of cashew production for export markets represents a part of the government’s good strategy for agricultural development, it could also pose potential challenges at the local level, particularly pertaining to food security in Ghana (Boafo & Lyons, 2019).
However, given the fact of the government’s keen awareness of this potential problem, through its flagship and deep commitment to the Planting For Food and Jobs (PFJ) program, which aims to promote food security and immediate availability of selected food crops on the market and also provide jobs at the local level (Planting for Food, 2021), the issue of food insecurity at the local level, appears to be well monitored and contained.
Thus, planting cashews, which take up farm lands, are unlikely to develop into food insecurity challenge in the country. Additionally, of all the 16 regions in Ghana, cashew production thrives largely in only three regions, Bono, Bono East, and Ahafo Regions (Boafo & Lyons, 2019), thus freeing up 13 other regions for food crops activities to ensure domestic food security.
While this initiative is quite a welcome step in the right direction, measures need to be put in place to make operational the TCDA as soon as possible. For a start, the Authority does not immediately have to overburden itself with all the named tree crops. It could, for instance, begin by first establishing the ‘Cashew Marketing Board’ or ‘CASHBOD’ for short. It might not be a good idea to start Marketing Boards for all six tree crops at once, given financial and staffing constraints. But if it has already done so, so be it.
Given that Ghana already has a good track record, charted by COCOBOD some 70 years ago, this step should not present much of a hassle and should be relatively easy. Perhaps most importantly, the experiences already acquired from the establishment of COCOBOD in its over seven decades of existence may be utilized as a template to start with a ‘CASHBOD.’
This may be augmented by the utilization of the wealth of knowledge from industry stakeholders that have, as recently as 2020, come together under one umbrella to constitute the Cashew Council of Ghana (CCG), with the support of the African Cashew Alliance (ACA), to help regulate and organize the Cashew sector. Thus instead of a direct CCG liaison with TCDA, they may have to do so indirectly through the ‘CASHBOD.’
‘CASHBOD’ Initial Operations and Financing
Being a brand new public organization, there certainly has to be initial ‘seed money’ and logistics from government, similar to what government did for the creation of the six new regions in Ghana. It must be staffed by experts who have some knowledge in international marketing and syndicated financing to raise capital for purchasing cashew from producers at stable prices in order to cushion out sharp fluctuations in world market prices, for later and subsequent sale on the international market for some profit.
This governmental subvention is absolutely necessary for now. But as the young organization grows, it is ultimately going to be weaned from this subvention and permitted to cut its own teeth for survival. After all, it is intended to be a profit-making enterprise, and similar to COCOBOD under the Ordinance of 1947 and Legislation of 1965, later utilize some of its profits to (a) stabilize producer price, (b) finance cocoa purchases, (c) help farmers in all aspects of production, and (d) transfer all operating surpluses to the Ghana government, including all reserves held at the time, to enable price stabilization for the next season (“UNCTAD Multi-Year, 2013) to help farmers and household income.
Whilst we are at it, why not enact some kind of legislative instrument, similar to the Ghana Petroleum Revenue Management Act (PRMA) 2011 that will permit or channel a small portion of profits from cashew marketing into the sustenance of a particular government program? For example, construction of borehole potable water for certain communities adjudged to be in dire need of good drinking water.
The same could be done for (a) Shea, (b) Mango, (c) Coconut, (d) Rubber, and (e) Oil Palm in Ghana, as the TCDA may deem fit, as they also later come on board. Those allocations of percentage of profits may serve as some kind of financial control measures for the country, as well as guaranteeing some dedicated funds for a particular state enterprise. It may not be at variance from what is presently obtaining with the oil revenue inflow into the Heritage Fund.
1. Boafo, J. & Lyons, K. (2019). “Ghana wants to grow more cashews. But what about unintended consequences?” Retrieved on March 9, 2021, from, https://theconversation.com/ghana-wants-to-grow-more-cashews-but-what-about-unintended-consequences-93162
2. Citi 97.3. (2016). “Nana Addo promises to create cashew marketing board.” Retrieved on March 9, 2021, from, https://citifmonline.com/2016/03/nana-addo-promises-to-create-cashew-marketing-board/
3. Oxford Business Group. (2021). “Crops beyond cocoa trees offer revenue and diversification for Ghana’s agriculture sector.” Retrieved on March 9, 2021, from, https://oxfordbusinessgroup.com/analysis/money-trees-non-cocoa-tree-crops-offer-revenue-and-diversification-potential
4. “Planting for food and Job”. (2021). Retrieved on March 9, 2021, from, https://mofa.gov.gh/site/programmes/pfj
5. The Tree Crops Development Authority: An Overview (2020). Retrieved on March 9, 2021, from, https://www.africancashewalliance.com/en/news-and-info/blog/tree-crops-development-authority-overview
6. “UNCTAD Multi-Year Expert Meeting on Commodities and Development”. (2013). Retrieved on March 9, 2021, from, https://unctad.org/system/files/non-official-document/SUC_MYEM2013_21032013_Ebenezer%20Tei%20Quartey.pdf