Date: July 14, 2011, 5:21 pm


A POLICY BRIEF ON REORGANISING THE SHEA INDUSTRY TOWARDS POVERTY REDUCTION


The poverty situation is endemic in the northern Ghana. It is revealed that the majority of families are categorized as poor and extremely poor. The high poverty rate if not tackled will mar the efforts of the government to reach the millennium development goal one which talked about reducing extreme poverty and hunger. The shea sector holds a high potential for effective contribution towards rural poverty eradication, particularly In northern Ghana.  Almost all rural households in northern Ghana depend heavily on sheanuts for their survival each year. The crop supplies over 60 % of the annual income of most rural women Any increase of profits from improvements in the harvesting, processing or marketing of shea butter will disproportionately benefit one of the most deprived groups in Ghana especially, rural women in the north as well as working towards Millennium Development Goals (MDGs) 1 and 3 – the eradication of extreme poverty and the promotion of gender equality That is affirmed by the Vice President.  According to him the industry also benefits close to two million poor people, about 95 per cent of whom are rural households, though its full potential is yet to be exploited. The infant industry he said is an attractive business venture earning about 30 million of foreign exchange for the national economy. Vice President Mahama estimated that the amount could triple when fully developed and it could also provide jobs for the  youth, women and the aged.  In spite of the shea potential in reducing poverty it has comparatively been neglected by research institutions and national governments in Ghana, Though some research on sheanuts started in Ghana in the 1920s under the Gold Coast Department of Agriculture, records of such research result have remained in the Year Book of Gold Coast Department of Agriculture for several years without using the result to improve the production.

 


Today the industry is challenged with the following:

Processing: Value addition at the village level by way of processing sheanuts into sheabutter is by individuals and family labour. Traditionally, the harvesting and processing of shea nuts is done by women and is a long and arduous task. It is estimated that 1kg of shea butter produced locally requires 20 to 30 hours of work and up to 10kg of firewood. Because of the difficulty in processing the nuts most of the nuts are sold unprocessed. Some estimates are that out of the 60% of the available shea nut crop harvested, 90% is sold unprocessed mostly to the food industry as a substitute for cocoa butter but also to the cosmetic and pharmaceutical industries


 

 In the urban centres, processing is done by organised co-operative groups under various facilitating non-governmental organisations. However, there are six fully mechanised sheabutter extraction factories with extraction capacities ranging from 20 to 60 tons of nuts per year. Four of these factories are located in the shea producing savannah zone of Northern Ghana at Savelugu, Tamale and Buipe. One is in the Brong-Ahafo region at Techiman, one in Ashanti region at Juaben and one at Tema. There is also a shea oil refinery at Tema, aimed at refining and fractionating the shea butter into its various constituents of olein and stearin,

 

In spite of the few machines, production is still rudimentary and there is still much preference of sheabutter produced by the small-scale methods by some consumers abroad because of the high stearin content of butter as compared to that produced by mechanized extraction mills. 

 

Policy recommendation

Mechanized production has a high turnover and production output, and has the potential to employ local labour to some extent.  Promoting the small-scale production however has a higher potential for keeping sheabutter production a rural one, and retain the opportunity for value addition for increased profits for the numerous sheabutter processing groups engaged in the industry. It is also the only approach to increase access to organic and Fair-trade markets.

The promotion of both the mechanised methods and the small-scale methods will therefore enhance Ghana's capacity to satisfy both the conventional and the niche markets; since both markets are expanding.

 

MARKETING

 

Another burning issue facing the industry is marketing.

 Price is noted to be a problem in the marketing of the shea nut and butter especially in the rural areas. While 4 oz of refined shea butter can sell for $16 on the international market, local producers sell half a kilo for 80 pesewas from market stalls The bulkers buy primarily on contract basis to supply to international export companies who are based in Ghana but with access to markets abroad. They are the main players in the bulk trading of the commodity. The phenomenon result in a point of cheating is through the value chain of the shea as the companies in the shea industry make huge profits at the expense of the poor women.

 

 

Policy recommendation for marketing

 

Marketing can be improved through the value chain approach by adding value to the product and taking advantage of the expanding market of the ECOWAS. Developing new products such as body lotions, improved produced soaps and pomades will further contribute to the creation of a sub-regional market for sheabutter. There must be policy that will enables the strengthening of the local producers' capacity to produce at quality and quantity, building up their skills in business management and bargaining skills, and providing rural infrastructure that will reduce overheads in nut collection, both at the primary and secondary levels. 

 

 

 



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