Ghana’s citrus industry is under threat due to payment delays and financial constraints, with only 40% of the projected 440,000 tons of citrus production being economically utilized. Stakeholders call for government-backed financial mechanisms to support farmers and address liquidity crises that could lead to farm abandonment and poor economic viability.
The citrus industry in Ghana is experiencing significant challenges, primarily due to liquidity constraints and payment delays. This situation is severely affecting both farmers and processors, leading to a decline in economic utilization of citrus production, which is projected at 440,000 tons for 2024, with only 40 percent effectively utilized.
Stakeholders attribute these issues to a financing gap preventing farmers from maintaining operations while waiting for payments from juice processors. During a meeting between the Orange Growers Association (OGA) and the Ministry of Food and Agriculture (MoFA) in Accra, industry representatives emphasized weaknesses within the supply chain and called for government-supported financial mechanisms.
Theodore Tsidi Kloba, Business Development Manager of OGA, noted, “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.” He further explained the issue, stating, “The problem is that we do not have the working capital to wait 45 to 60 days to get paid.”
According to the Observatory of Economic Complexity, the global citrus industry surpassed US$17 billion in 2023. Despite the abundance of raw materials, the lack of adequate financing decreases processors’ ability to purchase supplies. Kloba remarked, “By the time payments are made, farmers are already in financial distress, unable to reinvest in their farms.”
Processors attribute payment delays to lengthy export processes and terms set by international buyers. Ben Brown, Managing Director at SONO Ghana, explained, “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. That means it takes up to 65 days before I receive funds, but farmers cannot afford to wait that long.”
In response to these challenges, the Ministry of Food and Agriculture has acknowledged the financing difficulties and committed to providing structured support. Minister Eric Opoku stated, “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 continue to advocate for direct financial interventions to alleviate the liquidity crisis. An OGA representative proposed, “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.”
Additionally, concerns over farm abandonment and an aging workforce were raised, with Kloba noting, “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.”
The citrus sector in Ghana faces severe challenges due to financial constraints and delayed payments, affecting the livelihoods of farmers and processors alike. The need for structured financial support and mechanisms to ensure timely payments is crucial to prevent further decline within the industry. Without immediate intervention, the country’s citrus sector risks significant degradation, impacting both production and future sustainability.
Original Source: www.freshplaza.com
