The citrus industry in Ghana faces severe challenges due to payment delays and liquidity issues, risking contraction. Production estimates for 2024 indicate that only 40 percent of citrus is economically utilized. Industry stakeholders call for government-supported financial mechanisms to resolve these issues and ensure farmers receive timely payments.
Ghana’s domestic citrus industry faces significant challenges, notably liquidity issues and delays in payments, which are adversely affecting both farmers and processors. The annual citrus production for 2024 is estimated at 440,000 tons, but only 40 percent is being effectively utilized, resulting in substantial waste or loss. The crisis is largely attributed to a financing gap that prevents farmers from maintaining operations while awaiting payments from juice processors.
During a recent meeting in Accra between the Orange Growers Association (OGA) and the Ministry of Food and Agriculture (MoFA), industry stakeholders pointed to systemic weaknesses within the supply chain. They called for the implementation of a government-supported financial mechanism to alleviate these issues. “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,” stated Theodore Tsidi Kloba, Business Development Manager at OGA.
The Observatory of Economic Complexity (OEC) indicates that the global citrus industry had a value exceeding US$17 billion in 2023. Despite the abundance of raw materials, insufficient financial mechanisms impede the capacity of processors to purchase citrus effectively. Kloba noted that delays in payments lead to financial distress for farmers, who cannot reinvest in their agricultural operations before receiving funds.
Processors have corroborated that payment delays are primarily caused by extended export procedures and strict terms set by international buyers. Ben Brown, Managing Director at SONO Ghana, explained the lengthy timeline: “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 said. “That means it takes up to 65 days before I receive funds, but farmers cannot afford to wait that long.”
The Ministry of Food and Agriculture has recognized the financial challenges within the sector and has promised structured support. Minister Eric Opoku reiterated the government’s commitment to enhancing the citrus industry as a significant economic asset, stating, “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 are advocating for direct financial interventions to manage the liquidity crisis effectively. An OGA representative suggested, “What we need is a revolving working capital fund that allows us to pay farmers upfront… The money does not even have to come to processors—it can go straight to farmers as part of a structured contract.”
In addition to financial issues, concerns regarding farm abandonment and an aging farmer demographic were also highlighted. Kloba remarked, “The reality is that many of our farms are being abandoned because younger generations do not see citrus farming as a viable livelihood. Without immediate financial support, we risk losing a significant portion of our production base.”
In conclusion, Ghana’s citrus sector is grappling with critical challenges including payment delays, liquidity constraints, and impending contraction of the industry. There is an urgent need for government intervention through financial mechanisms to support farmers. The commitment from leadership to address these issues could potentially transform the industry, thereby harnessing its full economic potential and preventing loss of production capacity.
Original Source: www.freshplaza.com
