Attempts to improve rural livelihoods tend to emphasise private sector and informal economic arrangements or social protection mechanisms, in the hope that these would spur local self-help initiatives among the poor. Underlying such thinking is the assumption that success in these initiatives would mobilise the rural poor towards the solution of larger collective action problems. However, preliminary findings from our study of five oil palm producing communities in Ghana’s Western Region lead us to question the optimism of this perspective.
The study involved a mapping of the key actors in the oil palm economy. We interviewed and conducted focus group discussions with farmers and their dependents, farm workers, small-scale processors, agents, large oil processing companies, local authorities in the communities and district agricultural officers. However, the complexities we observed defy the easy classifications of the above categories, indicating rich interconnections, multiple allegiances and unstable alliances. In this context, strong ties did not always translate into social capital.
Some farmers sell their produce directly to the oil palm companies (OPCs), but many also do so through purchasing agents. Over time, relations between farmers and OPCs have become distant and formal. On the other hand, agents try to forge very close relations with the farmers who supply them with palm fruits; employing strategies that include giving small gifts to the farmers, pre-financing harvesting for cash-strapped farmers, or even joining the harvesting gangs themselves.
However, there are limits to the cordiality of such informal relations. Mistrust prevails amongst the key actors in the industry. Take the pricing of fruits, for example; prices are determined by the OPCs; agents, who are the largest suppliers of fruits to the OPCs, are seen to be capturing most of the value of this price. The agents determine the farm-gate price after deducting the costs of labour and transportation, then mark it up from what is offered by the OPCs. This arrangement results in suspicion among dissatisfied farmers, who accuse agents of unfairly lowering farmers’ prices. Their suspicion is further exacerbated by the agents’ practice of rigging their scales.
A well-run farmers’ organisation can help overcome many of these problems, for instance, by collectively bargaining the price of fruits with the OPCs or investing in palm oil processing, which could fetch them higher prices than what they get selling raw palm fruits. However, the diversity of interests among farmers, many of which being incompatible, undercuts the ability of these communities to engage in sustained collective action. The short-term costs of collective action are unevenly shared among group members and poorer farmers are likely to bear the brunt. Thus, without some form of inducement or safety net, the short-term material costs may prove too prohibitive for them. On the other hand, wealthier farmers, who can absorb higher costs, do not have the motivation to join these kinds of actions as they are not affected to the same degree as less resourced farmers, or they can find alternative solutions.
In addition, farmers’ associations are also burdened with serious internal problems. There is as much suspicion among the farmers who belong to these associations as there is between farmers and the other actors in the industry. Members accuse association leaders of incompetence, non-responsiveness, and malfeasance. Farmers recounted an instance where an association leader colluded with an agricultural extension officer to misappropriate resources the association had received from government; and, when this was discovered and an investigation was launched, the official committed suicide.
Our preliminary findings, therefore, point to the need to re-examine livelihood improvement schemes which place undue faith in informal or self-help arrangements. Self-help schemes may place heavy burdens on the poorest or most vulnerable. The implication is that a certain welfare threshold needs to have already been crossed before the poor can meaningfully participate in such collective self-help schemes.
Written by: Kofi Takyi Asante, Dorothy Takyiakwaa and Prince Selorm Tetteh
Photo credit: Esther Naa Dodua Darku