Ghana’s citrus industry is experiencing financial difficulties due to delayed payments and liquidity issues that threaten both farmers and processors. Predicted production for 2024 is 440,000 tons, but only 40% is economically utilized. Stakeholders call for government-backed financial mechanisms to address these challenges and support the industry.
The citrus industry in Ghana is currently experiencing challenges due to liquidity issues and delayed payments, which threaten its viability. In 2024, citrus production is expected to reach 440,000 tons, but only 40 percent of this output is utilized economically, leading to waste or financial loss. Stakeholders blame these issues on a funding gap that prevents farmers from sustaining operations while waiting for payments from processors.
At a recent meeting in Accra, the Orange Growers Association (OGA) and the Ministry of Food and Agriculture (MoFA) discussed the industry’s structural weaknesses and the need for government-backed financial mechanisms to address them. “We are talking about a sector with immense potential… By volume, citrus production now exceeds cocoa, yet we have only tapped into 40 percent of its economic value,” said Theodore Tsidi Kloba, OGA’s Business Development Manager. He emphasized the critical need for working capital as farmers currently wait 45 to 60 days for payments.
The global citrus industry was valued at over $17 billion in 2023, according to the Observatory of Economic Complexity. Despite having sufficient raw material, processors struggle due to inadequate financing, hampering their purchasing capability. Kloba highlighted the plight of farmers, who often face financial distress during the long payment process. He stated, “By the time payments are made, farmers are already in financial distress, unable to reinvest in their farms.”
Payment delays are also caused by lengthy export processes. Ben Brown, Managing Director at SONO Ghana, stated, “When I buy the fruit, it takes one day to process, another five days to store, three weeks to ship, and 45 days for my customer to pay.” He noted that this amounts to up to 65 days before processors receive funds, which farmers cannot afford to wait for.
In response to the liquidity challenges, Minister Eric Opoku of MoFA acknowledged the situation and the government’s commitment to enhancing the citrus sector. He said, “The citrus sector represents one of our most promising agricultural frontiers… We will work on a comprehensive support package that will bridge the payment gap currently crippling the industry.”
Stakeholders advocate for direct financial intervention to alleviate the crisis. OGA representatives suggest a revolving working capital fund to allow for upfront payments to farmers. They believe that this funding structure could bypass processors, streamlining the financial flow directly to the producers.
Moreover, concerns about aging farmers and potential farm abandonment are also pressing. Kloba noted that young people do not view citrus farming as a viable option. He cautioned, “Without immediate financial support, we risk losing a significant portion of our production base.”
The citrus sector in Ghana faces urgent challenges due to delayed payments and funding gaps, leading to underutilization of production. Stakeholders call for government support and direct financial interventions to restructure the current system and sustain the farming community. Concerns over farm abandonment highlight a critical need for immediate action to secure the future of the industry. Without substantial changes, the economic potential of the citrus industry may remain untapped.
Original Source: www.freshplaza.com
