Evaluation of the Ghana Oil Palm Development Corporation

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The need to diversify the economy of Ghana from its mono-cultural dependence on cocoa has resulted in the introduction of non-traditional crops like oil palm. Investments in the oil palm crop have been large and they have usually involved the establishment of large scale agro-industrial (Plantation) projects, of which the Ghana Oil Palm Development Corporation - Phase I project is a classic example. Such investments have an impact on the community and they can be described in terms of changes in the socio-economic characteristics of the community. These impacts could be beneficial or detrimental. This study is concerned with the socio-economic evaluation of the impacts associated with the establishment of the Ghana Oil Palm Development Corporation - Phase I project - at Kwae. The study revealed that the environmental setting into which the project was given inception was favourable. Its development has involved huge capital investments in the establishment of a nucleus estate, palm oil processing mill, and out grower and smallholder schemes. The discounted measures of Net Present Value and Internal Rate of Return (Benefit Cost Analysis) were found to be convenient for evaluating the direct impacts of the project. The project was found to be economically and financially attractive, and that it contributed positively to the national income and economic growth, “as well as making a favourable return to the contribution of participating entities. The distribution of income among farmers participating in the project was very equal. Its contribution to agricultural, and social development, as well as the attainment of the national goals was favourable. However the alienation of cropland for the project was resented by the local community. There was the possibility of food shortage in the area. The project was found to be sensitive to declining yields, failing prices for its produce, high operating cost, and high remuneration for local labour. Recommendations were made among other things, for the efficient land use planning of the area, the extension of the oil palm plantings, through an out grower scheme, and the institution of a development fund.
A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirements for the award of the Degree of Master of SCience in Regional Planning, 1985