The Contribution of Outgrower Scheme to Farmers Livelihood: A Case of Oil Palm Farmers in the Kwaebibirem District of Ghana

Abstract

The study was carried out to investigate the contribution of Ghana Oil Palm Development Company Limited (GOPDC) outgrower scheme to small-scale farmers‘ livelihood. A total of 214 respondents were involved in this study. The respondents were selected from four communities in the Kwaebibirem district of the Eastern region of Ghana. They were both outgrower and non outgrower farmers (small scale farmers). The data gathered were analysed using SPSS. Similarly, chi square test was used to measure the relationship between some selected variables. The results show that even though Ghana Oil Palm Development Company Limited (GOPDC) supplied enough inputs to aid outgrowers, the relationship between GOPDC and outgrowers is strained and has significant implications on the sustainability of the contract scheme. This is because only 19% of outgrower farmers sell fresh fruit bunch (FFB) to GOPDC stating delayed period of payment and non-payment of cash by GOPDC, transportation challenges, and land tenure arrangement as contributing factors. Socio-economic characteristics such as gender, level of education, and farming experience in oil palm cultivation were found to have contributed to the acceptance of the outgrower contract scheme. The results of the analysis also demonstrate that participation in the outgrower contract scheme improves farmers‘ livelihood outcome (accumulation of physical assets). Similarly, the study confirmed that the schemes play a very vital role in the economic development of the rural communities where the schemes are implemented by assisting communities with schools, employment and spin-off employment, health delivery and infrastructure development like provision and maintenance of feeder roads to ensure easy access for the farmers and their farm produce. The study recommends that the outgrower contract scheme should be encouraged in other agricultural sectors of the economy since it has proven to contribute to farmers‘ livelihood outcome.