Seedling production and choice among cashew farmers in Ghana: a profitability analysis

Publication Date12 April 2020
AuthorRichard Kwasi Bannor,Helena Oppong-Kyeremeh,Steffen Abele,Frank Osei Tutu,Samual Kwabena Chaa Kyire,Dickson Agyina
SubjectStrategy,Business ethics,Sustainability
Seedling production and choice
among cashew farmers in Ghana: a
profitability analysis
Richard Kwasi Bannor and Helena Oppong-Kyeremeh
Department of Agricultural Economics, Agribusiness and Extension,
University of Energy and Natural Resources, Sunyani, Ghana
Steffen Abele
University of Applied Forest Sciences, Rottenburg, Germany, and
Frank Osei Tutu, Samual Kwabena Chaa Kyire and Dickson Agyina
Department of Agricultural Economics, Agribusiness and Extension,
University of Energy and Natural Resources, Sunyani, Ghana
Purpose The unavailability and inadequate use of cashew seedlings for propagation are part of the
challenges facing the cashew sub-sector in Ghana. However, promoting investment into cashew seedling
production should be based on the analysis of the profitability and viability of such a venture as well as the
respective determinants of farmersdemand for the planting material.
Design/methodology/approach This study used gross margin/contribution, net margin and contribution
ratios to analyse the profitabilityof cashew seedling production under fourdifferent business models. Also, the
determinants of choice of planting material for cashew plantation among farmers was analysed via a
multinomial probit regression.
Findings The study revealed that cashew seedling production is profitable with a gross margin of $8,474,
$2,242, $1,616 and $1,797 and contribution to sales of 3153% for the various business models. The positive
determinants of the use of cashew seedlings were off-farm job participation and extension contact, whereas
farm size and age of plantation negatively influenced the use of seedlings. Land acquisition method also
influenced the use of both seedlings and seeds negatively.
Practical implications The findings provide empirical evidence of the viability and profitability of cashew
seedling production as a viable business venture and off-farm opportunity in rural areas. The information from
the study will help major stakeholders in cashew production to understand the type of farmers who use seeds
and seedlings as well as the reasons for using or otherwise.
Originality/value Significant research in the cashew value chain had focussed on the profitability of
cashew plantation with little literature on profitability and viability analysis of cashew seedling production.
Similarly, this study provides a significant value chain job opportunity as well as literature on the choice of
cashew seedlings among current and prospective end-users.
Keywords Cashew, Profitability, Seeds, Seedlings and agripreneurs
Paper type Research paper
1. Introduction
The worlds cashew production has been increasing steadily and, as a result, in 2014, the total
world production of cashew was 3,713,467 tonnes with Ghana contributing 50,000 tonnes
(1.35%) to the total production. Ghana has also witnessed a steady increase in production of
among cashew
We are very grateful to Mr. Adams Buabeng, District Director of the Ministry of Food and Agriculture at
Jaman North Municipality for his tremendous assistance before and during data collection. We also
express our heartfelt appreciation to the farmers, seedling producers, grafters and the Wenchi
Agricultural Research Station staff who spent time to answer the questionnaires.
Availability of data and materials: The dataset used in this study is available from the corresponding
author on reasonable request.
Competing interests: The authors declare that they have no competing interests.
The current issue and full text archive of this journal is available on Emerald Insight at:
Received 21 November 2019
Revised 24 February 2020
Accepted 9 March 2020
WorldJournal of Entrepreneurship,
Managementand Sustainable
Vol.16 No. 2, 2020
pp. 109-129
©Emerald PublishingLimited
cashew with increases in total production from 9,000 tonnes in 2002 to 50,000 tonnes in 2014
represented by a compound growth rate of 15.36% (FAOSTATS, 2017). Studies have shown
that cashew was brought to Ghana in the late 1960s, but the interest was subsequently
rekindled through the introduction of the Economic Recovery Programme and Cashew
Development Plan in 1983 and 2002 respectively (Evans et al., 2015). Consequently,
agricultural land in most parts of Bono and Bono East Regions of Ghana where it is now
grown at the highest density has been shifting from the production of food crops towards
increased cashew nut cultivation in recent years. These areas used to be forest zones but have
been gradually metamorphosing into savannah and transitional zones as a result of
deforestation (Bezerra et al., 2007). Even worse, Ghana has recently recorded the highest
rainforest loss, with about 60% increases in the countrys primary rainforest loss in 2018
compared to 2017 (World Economic Forum, 2019). Negative implication as it may seem,
however, this has revived interest in cashew plantation as it can grow in harsh, semiarid
climatic and soil conditions as well as serve as climate change and afforestation crop
(Mensah, 2017;De Alencar et al., 2018). As a result,cashew has over the years become the
number one non-traditional export earner in Ghanas agriculture sub-sector, contributing
approximately $196.7 million in 2016 (GEPA, 2017;Bannor et al., 2019).
Consequently, the economic importance of cashew production has been dramatically
acknowledged by small-scalefarmers who are currently growing itat an exponential rate (Das
and Arora, 2017;De Alencaret al., 2018). It suggeststhat, intrinsically,investment inthe cashew
sub-sectoris crucial for a country that is over-dependent on cocoaas her major exportingcrop
(Bannoret al., 2019). Besides, future demandfor cashew seedlings is also expected to be high in
the Bono and Bono East Regions which house most of the commercial cashew plantations
(Moreirada Silva et al., 2017). However,at varianceto the common practiceof the use of nursery-
grown seedlings for tree establishment, most cashew plantations are planted using seeds
(Dedefo et al., 2017). This culture could be a threatto the economic potentialand benefits of the
cashew sub-sector, mainly because orchards planted with seeds have low establishment rate
ranging between 62 and 64% (Martin et al., 1997). Besides,the propagationof cashew with seed
results in differences in the plantspecies phenotypically,low productivity and increasedcosts,
which inhibits its commercial exploitation (Azam-Ali and Judge, 2001). However, grafted
cashew seedlings have a shorter period of maturi ty (Government of Ghana, 2018b).
Additionally, the use of cashewseedlings ensures successful establishment and rapid growth
after transplanting (Pinto et al., 2011).
The unavailability and inadequate use of cashew seedlings for propagation is one of the
fundamental agronomic challenges faced by the cashew industry in Ghana (Dendena and
Corsi, 2014;Moreira da Silva et al., 2017). Besides, most farmers who use seeds do not have
enough knowledge on the selection of good and quality nuts for propagation. Also, seed
collection by these farmers is commonlybased on opportunistic strategies that only consider
availability and distance to seed sources, but not seed quality (Luna-Nieves et al.,2019).
Additionally, there is a growing sense of inertia among farmers to use seedlings for the
propagationof orchards. Beyond these, there is also an imbalance in the supply and demandof
seedlings which has further promoted the use of seeds for cashew propagation (Moreira da
Silva et al.,2017).Consequently, as part of the strategy tobattle this problem, creating jobs for
the unemployed youth in the country, modernise and transform Ghanas cashew sector; the
Government of Ghana has initiatedefforts to distribute improved seedling planting materials
to current and prospectivecashew farmers via its flagship10-years CashewDevelopment Plan
(Governmentof Ghana, 2018a;Ali, 2018). Further, various agripreneurs,especially women and
the youth, have been encouraged to establish cashew nurseries to cash on the benefits and
opportunities emanating from the sub-sector(Business and Financial Times, 2018).
Notwithstanding the initiatives of the Government of Ghana and other major stakeholders
in the cashew sub-sector, investment into cashew seedling production should be grounded on

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