The Ghanaian citrus industry is experiencing liquidity constraints and payment delays that threaten its viability. Production for 2024 is projected at 440,000 tons, with only 40 percent being economically utilized. Stakeholders call for government-backed financial mechanisms to support farmers and address supply chain weaknesses, warning that without action, the industry may face contraction and abandonment.
The citrus sector in Ghana is confronting potential contraction, primarily due to liquidity constraints and delayed payments affecting both farmers and processors. Projected production for 2024 stands at 440,000 tons; however, only 40 percent is economically utilized, with the remainder wasted or sold at a loss. The root of this crisis lies in a significant financing gap that hampers farmers’ ability to operate while awaiting payments from juice processors.
During a meeting between the Orange Growers Association (OGA) and the Ministry of Food and Agriculture (MoFA) in Accra, industry stakeholders identified structural weaknesses in the supply chain. They advocated for government-backed financial mechanisms to address 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,” remarked Theodore Tsidi Kloba, Business Development Manager of OGA. He further emphasized, “The problem is that we do not have the working capital to wait 45 to 60 days to get paid.”
As per the Observatory of Economic Complexity (OEC), the global citrus industry was valued at over US$17 billion in 2023. However, despite the abundance of raw materials, financing constraints limit the purchasing capability of processors. Kloba noted, “By the time payments are made, farmers are already in financial distress, unable to reinvest in their farms.”
Processors confirm that payment delays are due to protracted export processes and strict international buyer terms. “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,” explained Ben Brown, Managing Director of SONO Ghana. He added, “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 acknowledged these financing challenges and committed to creating structured support. Minister Eric Opoku stressed the government’s dedication to transforming the citrus industry into a vital economic pillar. “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,” he stated.
There are calls for direct financial intervention to alleviate the liquidity crisis. An OGA representative noted, “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 about farm abandonment and an aging farmer population have been raised. Kloba expressed, “The reality is that many of our farms are being abandoned because younger generations do not see citrus farming as a viable livelihood.” He added, “Without immediate financial support, we risk losing a significant portion of our production base.”
The citrus industry in Ghana is facing significant challenges stemming from financing shortfalls and payment delays, impacting production and farmer viability. Structural weaknesses in the supply chain necessitate government intervention and financial support to leverage the sector’s potential fully. Without prompt solutions, the risk of farm abandonment and further production decreases looms large, as younger generations are disinclined to pursue citrus farming as a viable career.
Original Source: www.freshplaza.com
