Cassava becoming mainstay of Ghana’s GDP

STORY: KWAKU NTI & CHARITY SACKITEY

Government will from next year ensure that the cultivation of cassava in the country is given a major boost to help address the challenges bedeviling the sector and help placed the Ghanaian economy on a sound footing.

The Minister for Environment and Science, Mrs. Shirley Aryeetey, disclosed this when delivering an address at a conference organized by the Centre for Scientific and Industrial Research (CSIR) last Friday.
The conference, which was under the theme “Improving Cassava Yields in Africa Drought-Prone-Environment”, was aimed at discussing how cassava yields can be improved in drought-prone environments like Africa.

She welcomed the idea of improving upon the production of the crop adding that “cassava has undergone transformation from being a resource poor farmer’s crop to industrial crop”.

The Minister, on that score, labeled the move as a “laudable idea because Cassava has contributed about 22% of Ghana’s Gross Domestic Product (GDP) ever since it was introduced by the Portuguese in the 16th Century”.
“The improvement in the cultivation methods will help the nation to improve upon its food needs and also bring foreign exchange into the country,” she added.

The conference brought together researchers from advanced Agricultural Institutes and National Agricultural Researchers across the globe and was organized by the Centre under its Generation Challenge Program (GCP).
The GCP was created in 2003 with the aim of establishing a global network of partners from advanced agricultural institutes and national agricultural research programs to collectively work to improve crop productivity in drought-prone environments.

The partners, since the inception of the program have been able to work together to create public goods from the raw materials of plant genetic diversity and the advanced tools of genomics science for use in plant breeding programs.
Cassava as a crop, according to GCP, was introduced in the 16th Century by the Brazilian-Portuguese culture and has over the years become a major staple for Sub-Saharan Africa because of the many advantages gained from the crop.

The estimated worldwide production of cassava is about 300 million metric tons of fresh roots. The largest producers are Nigeria, Brazil, Congo (Zaire), Thailand, Indonesia and China. High domestic consumption of cassava in Nigeria, Congo and Brazil means their net exports is negligible.

Thailand and Indonesia are the largest suppliers of cassava chips into the world market covering about 80% and 10% of global exports respectively. In 1996 for example Thailand exported about 5 million tons of cassava products. In that same year, Ghana’s total production of fresh cassava was about 5 million tons. Local demand was 3 million tons, leaving a surplus of 2 million tons, which can yield about 700,000 tons of dry cassava products, like chips or starch.

WORLD DEMAND FOR CASSAVA PRODUCTS

In 2006, imports by the European Union of dry cassava products was 6.8 million tons. Non-EU imports in that same year was 4.6 million tons.

Increases in imports by non-EU countries have been forecast as a result of strong demand from Japan, China and the Russian Federation.

TRANSPORTATION OF CASSAVA

Transportation is a crucial factor in the cost and price determination for cassava products. The relevance of transportation cost is given by the example following. Although cassava is much cheaper than French wheat on its arrival in Rotterdam, transport cost from Rotterdam to Southern France pushes its price to levels that are not competitive.

At present a major proportion of cassava exports into Europe are in pellets and almost all the trade is handled by six Europe-based shipping companies.

The elapsed time between loading and arrival in Northern Europe is between 30 to 42 days from the Far East. In this respect Ghana has an advantage since ships could take between 10-20 days from Ghana to Europe. The importation of cassava into the European Union is dominated by a small number of German and Dutch companies.

PRICE TRENDS

Prices quoted for cassava (CIF Rotterdam) in 1996 were $180 for pellets and $130 for chips. The price quoted for Ghanaian exports for chips is between $l00-$120.

LESSONS ON CASSAVA EXPORTS FROM THAILAND

In Thailand, farmers produce cassava under contract under a highly mechanized production and quality control system. Production, handling and processing is done on a large scale. The success of the cassava chip and pellet industry in Thailand has been facilitated by factors such as:

1. The willingness of farmers to increase production,

2. The fact that cassava is not consumed internally,

3. A good infrastructure;

4. The ability for Thailand to copy the pelleting technology from Europe.

Cassava is cultivated as a sole crop and this reduces the risk of contamination. Accordingly, the processing and storage facilities are dedicated solely to cassava. The highly mechanized systems make cost of production, processing and shipment low, thus making the industry a highly profitable one in Thailand. The following provides some comparisons on the cassava chip export for Ghana and Thailand.

THE POTENTIAL FOR EXPORTS OF CASSAVA FROM GHANA

Cassava is an important agricultural product in Ghana, contributing about 22% of the county’s Agricultural GDP. It is also becoming an important foreign exchange earner. What then is Ghana’s potential for increasing cassava exports? More especially how realistic was Mr. Edumadze’s statement in 2000 that Ghana can earn $990 million by 2010 from the export of cassava products?

For Ghana to achieve such export earnings, total tonnage of dry cassava products in the form of starch, chips or pellets must be about 5.75 million based on a world price of roughly $190 per ton. The quantity of fresh roots required to produce 5.75 million tons of dry cassava products is in the region of 17 million tons (based on a conversion factor of 2.932 tons of fresh roots for 1 ton of dry product). At present levels, Ghana would need to more than triple its annual domestic production of cassava in order to achieve an export quantity of 5.75 million tons dry cassava product. To even assume that this tripling of production could be achieved in two years is to stretch incredulity.

Let us however make the far-fetched assumption that the 5.75 million tons export quantity can be produced by the year 2010. How does Ghana intend to break into a world market that is regulated by a quota system? Let us remember that the EU allocates only 175,000 tons to other countries, apart from Thailand, Indonesia and China for the export of cassava chips and pellets.

Similar quota might apply to the imports of starch. The only other market large enough to absorb large quantities of industrial starch is the US market. Has the government established that such export quantities of starch are actually possible to a world market that is so highly competitive? One will assume that the government has done its homework. It will therefore be interesting to see how the government intends to achieve the following.

1. What efforts are in place to increase the acreage of land devoted to cassava cultivation so as to triple annual production?

2. How are farmers going to be mobilized and given the necessary resources and incentives to encourage them to produce cassava?

3. In order to compete on price in the world market, production will have to be highly mechanized. What are government’s efforts in this direction?

4. Since it would be useless to produce what cannot be sold, what is government’s market penetration strategy that would ensure that the projected export earnings

It would be to the benefit of Ghana if cassava exports can be drastically increased in order to earn the country foreign exchange. However politicians must be careful not to raise expectations unduly regarding what it is possible to achieve. It is not impossible to achieve such a target within a reasonable time frame and with a lot of hard work, but I am afraid this country still has a long way to go before fiction becomes fact.