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Friday, April 17, 2015
ayusmann: BARBARIC XENOPHOBIC ATTACKS
ayusmann: BARBARIC XENOPHOBIC ATTACKS: Little would one have thought that the recent human attacks on foreigners in south Africa would come to pass forgetting so soon how ...
BARBARIC XENOPHOBIC ATTACKS
Little would one have thought that the recent human
attacks on foreigners in south Africa would come to pass forgetting so soon how
these other African countries supported them in one way or the other through
their struggle in the days of apartheid. Today, they brothers and sisters in
south Africa being nationals of other African countries are seen as a treat and
there is that urgent need to get rid of them even to the point of executing
them as part of the process.
The escalation of criminal activities and crime
doesn’t mean that foreign nationals from other African countries are
responsible. Crime and assassinations
have exited in that land for long before the black rule. Great leaders and
fighters in the days of apartheid lost their lives in the struggle for black
rule. Despite the fact the our skin colour is black doesn’t make us devils.
They south Africans should remember the words of Lucky Dube “we are all made in
the image of God regardless of our skin colours. We are different colours, one
people. ”
The level at which the attack has reached indicates
that the people of the republic of south Africa really mean business and should
be stopped by all means. Our leaders, worldwide have to interfere and take the
necessary actions as soon as possible in order not to waste more precious lives
in this barbaric xenophobic attacks of other African nationals residence there.
The president of the republic of Ghana and the chairman of the African Union
(A.U) has responded appropriately by condemning their actions. Our people over
there need our prayers but whilst we remember them in our prayers, let us hope
that our leaders will not only condemn the killings but find an amicable
solution to this near to come genocide. We don’t need reports, all we need is
results.
Wednesday, September 3, 2014
MY FERTILE HOMELAND
Gently the seed
germinates
The tender, soft and
caring
The dark brown in
colour
Very beautiful over
the horizon
Great suitable
conditions
Tasty scenty
tantalizing nutrients
Perfumed with the
aroma of temptation
Yet the tempted are
tempted
The failures fail
Beyond the reach of
the hungry
And the wishes of the
wished
Dare you touch and
face the repercussion
My home your home our
home all inclusive
Gently they go gently
they come
Spreading beautifully
all over
Tenderly fed to be
fed upon
Wednesday, January 29, 2014
DWELLING IN RICHES
The rich beautiful and fertile land of the sissala
people is really a blessing from the almighty. Until recently, the people
farmed without the application of chemical fertilizers on their farms. Very
good harvests are made season after season regardless of what one sows. The land
is also quite easy to till even if it’s a virgin land one is working on for the
first time.
Sissala land is located in the Guinea Savannah
vegetation belt of the northern part of Ghana, the upper west region. The vegetation consists of grasses with
scattered fire resistant trees such as the sheanut, the baobab and dawadawa
trees. Acacia is also a common tree of this vegetation belt. The heterogeneous
collections of these trees meet domestic requirements for firewood and
charcoal, construction of houses, cattle kraals and fencing of gardens. The shorter shrubs and grasses provide fodder
for livestock. These activities need to be enhanced by providing the
appropriate means of transport for them.
But they have to be appropriately controlled and managed if the
environment is to be sustained. The sheanut
tree is one of the great economic assert of the District and head portage has
been the most common means of transporting the fruits from the farm to the
house. The climate of the Sissala East District is tropical continental as
experienced in the northern regions of Ghana.
Throughout the year, temperatures are high with a minimum of 23°C at
night and a maximum of 42°C during the day and this favours plant growth. The
mean monthly temperature ranges between 21°C and 32°C. The highest monthly maximum
temperature rises up to 40°C before the rainy season in May with lowest minimum
temperature falling to about 12°C in December when the Harmattan winds from the
Sahara dries up the vegetation.
The rainfall type which is conventional in nature is
characterized by a single rainy season from May to September/October. That is
five to six months with the total number of rain ranging between 70 to 80 days
with a mean annual rainfall of about 121mm as recorded in Tumu station in 1999,
with extreme annual rainfall ranging between 397mm and 635mm. As a result of
the single maximum rainfall prevailing in the district all year round, crop
production is mostly done during the rainy season.
Grains, cereals, legumes and tubers are the major
group of crops cultivated by the people across the land. The huge quantities of
food stuffs that leave the land every year is worth millions of cedis if
properly valued. One wonders why the people of the land claim poverty when
surrounded by such riches indebted in their soil. Until recently, most of the
farmers practiced substantial farming producing just enough to feed their
households through the year and sell a little for cash. Chemical fertilizers
were hardly used on these farms. Due to the vastness of the land, the method of
shifting cultivation and land fallow is equally practiced even though fading,
some of the communities still practice it. A handful of the people practiced
commercial farming system in those days. These were the few rich with tractors
and the ability to hire labour to work on their farms.
With the inception of masara n arziki in the land
about three years back, farming has been elevated to a different level in the
land and most people are now into commercial farming. In fact, farming is now a
big time investment and people are making it big time. The production of maize
has champion the activities of the majority of the farmers in the land. They
people of the land now produce maize beyond any ones imagination and this can
be attested by many in the land. In addition, masara n arziki has been so
successful that within three years of operation in the land, the company has
built a very huge warehouse to curb the long overdue problem of storage faced
by many farmers and the company within its few years of operations. Maize
production has been made so easy and simple that most farmers now enjoy the fruit
of their labour as all benefits and actual prize of the commodity is paid
to all those registered with the company
during the farming season. The activities of middlemen are now a thing of the
past for the people of the land. At the beginning of every farming season, it
is now the desire of every farmer to get himself registered and produce for the
company as it’s almost free because the company ploughs the lands, provide
improved seeds and fertilizers and other chemicals necessary for maximum
output.
Yam, another staple food of the people is also
cultivated in great quantities in some communities of the land. Yam produce
here are very good and free from chemical fertilizers and can be stored for a
very long time without getting spoiled. Farmers equally earn good income from
the sales of these yam as the commodity is quite expense these days. Yam
farmers at the farm gates and communities complain bitterly about the way they
lose much income to middlemen. It is very tedious to cultivate and as such
deserve good prizes for it, they claim.
Cotton production is another area where the people
benefit financially until. Over the past few years, the production of cotton
has drastically declined due to the dissatisfaction of farmers during the
buying season. All the same, some farmers still cultivate the crop to feed the
gin factory situated in the land. The proceeds of sheanuts also generate some
cash for the people.
The breeding of animals is also a major investment
for the people. Cattle, sheep, goats and pigs breed very well. The number of
kraals that spread across the land indicates the significance of these animals
to the people. Birds such as chicken and guinea fowls rearing are also a common
thing in every household. Interestingly, most of these animals are reared using
the extensive system.
The extent to which the rewards of these practices
have been of enormous benefit to the people can’t be quantified though the
illiteracy rate is quite high among the sissalas. Just as riches were measured
in terms of the number of animals or the harvest in ancient times, so it is in
this land.
With the introduction of some modern practices, much
more value can be added to what already exists in the land. Farm machinery such
as tractors, harvesters and storage facilities would boost production
significantly and improve the livelihood of the people.
Tuesday, December 31, 2013
FOURTH REPUBLIC BEEF SISSALA LAND UP
The sissala east district has made great progress in
the fourth republic of Ghana’s democratic rule from the then Sissala district
to the current Sissala east district upon the demarcation of the then sissala
district into sissala east and west districts with Tumu being the district
capital for east and Gwollu becoming the capital for the west.
Pondering over developmental matters within the
district from the past years till date, one can without hesitation conclude
that the land of the Sissala has seen the light of day irrespective of which
government is in power in our current practice of democracy especially the
Sissala east district though they two districts are still in need of much
infrastructural development.
In the first parliament of the fourth republic that
is in the era of the first John of the republic, Alhaji Amidu Sulemana being
the then member of parliament when the two districts were together as one contributed
his quota and can best be remembered with the construction of drainage and the
tarring of a few stretch of the commercial street and the connection of the
district to the national grid. Besides being the MP alone, he equally served
the two upper regions as the regional minister consecutively and demonstrated
great sense of maturity, leadership and good governance especially in the areas
of peace building and conflict resolutions within the regions. The people of Wa
and Bolgatanga can best testify to his dogmatic charisma.
Honorable Moses Baah succeeded him in the second
parliament of the fourth republic and equally strived to raise the district to
another milestone. Hon. Moses was assigned deputy ministerial position in the
regime of His Excellency, president Kufour, the second John of the republic in
the health sector where he made enormous contributions in uplifting the health
status of the district. Hon. Moses in his quest for development was able to
attract the attention of an international NGO plan Ghana into the district.
Mere words can’t describe gargantuan impact of plan on the Sissalas. In the
field of agriculture, health, education, micro finance, livelihood programs,
gender and women empowerment, just to mention a few of the activities of plan
Ghana in the district. Plan also served as a buttress to the local NGOs and
other civil society groups within the district into their line of programs.
In another development, hon. Moses squeezed water
out of rocks to assist the district hospital with an ambulance within the nation’s
scarce resources in his capacity as a deputy minister to aid in emergency
services. Lots of lives of the sissala people were save especially women in
labour from surrounding communities without and with health facilities and
traditional birth attendance. Cases above the district hospital were equally
referred out of the district without any hindrance with the ambulance. One
important issue worth mention is the vibrant nature of the sissala union. The
activities of the union surpassed individual interest such that it was a joy
for all sissalas in all walks of life to come home in their numbers to be
present at the annual unions meeting at the end of the year. Student groups
were not equally left out, sissala students union in the various institutions
were all doing very well then. The transportation sector was not left out as a
few kilometers of the Tumu- Navrongo road was tarred to the outskirts of the
town.
Mother is how most us call her. Hajia Rafatu Halutie
represented the people of the sissala east in parliament after hon. Moses Baah.
In one way or the other, almost everyone especially the youth called on her
when for medical attention when she was at the district hospital where she
served her people for a very long time.
As a member of parliament, hajia had much influence
on the youth of the land through her perseverance and the concern and love she
had all especially women. Her plight was to improve upon the health sector in
the district. “The health of the sissala is the wealth of the Sissala” she
often says. Her love for her profession in the health service prompted her to
expand and
resourced the district hospital when the opportunity came to boost health
services in the district. The educational sector was not left unattended; the
senior high/technical school was raised to a boarding status, a midwifery
training school was established in the district and scholarships awarded to some
tertiary students from the district. The transportation network within the
district capital was also improved by tarring some of the township road and
made efforts to get the route linking the two regional capitals completed in
time. Most of the rural communities in the district had their first share of
the national cake by being connected to the national grid, an experience most
will cherish a life time.
Honorable Sulemana Alijata is the current member of
parliament for the sissala east constituency who is barely a year old in
parliament. A month ago, the MP distributed a good number of computers some schools
within the district to assist in the teaching and learning of ICT in those
schools. Other schools were equally assisted to illuminate their compounds in
the night with public lighting systems. As an industrious woman, the progress
of the district depends so much on her and we pray and hope that she delivers
just like her predecessors or better.
The success of all the MPs mentioned above depended
so much on the synergy that existed between them and the district chief
executives in their era as MPs. The district for almost a year now still has no
DCE to steer the affairs of the district. After the first appointee was turned
down through assembly voting, nothing has been done for quite some time now.
Competency lies in the hands of the almighty and we pray that God bless the
president of the republic of Ghana and grant him the ability to choose the
people’s choice to move on. The world is an impeccable one and therefore we
should learn to forgive those who wrong us so that the good lord may find
favour with us. The beauty of the day starts with the rays of the sun.
God bless Ghana, god bless the sissala land!!!
HAPPY NEW!
By Ayuba Oseini
0269838215
Tuesday, June 11, 2013
ASSESSING THE IMPACT OF COTTON PRODUCTION, A CASE STUDY IN TUMU, THE SISSALA EAST DISRICT OF THE UPPER WEST REGION OF GHANA
CHAPTER
ONE
1.0 INTRODUCTION
This
chapter covers the back ground of the study, problem statement, objectives and
research questions, justification for undertaking this study, objectives and
the scope of the study.
1.1 BACKGROUND TO THE STUDY
The
Agriculture sector is key to overall economic growth and development of Ghana.
In the national development agenda, agriculture is expected to lead the growth
and structural transformation of the economy and maximize the benefits of
accelerated growth. Significant improvements in the productivity of the
agriculture sector are required to raise the average real incomes of Ghanaians
as a whole. The food and agriculture sector also has direct impact on the
attainment of some of the Millennium Development Goals (MDGs).
Agriculture continues to be the largest sector
of Ghana’s economy, contributing about 39% of GDP compared to about 26% for the
industry sector and 31% for the services sector. Arable and industrial crop
production has increased only marginally over the last 10 years with the only
exception being cocoa which increased significantly between 2000 and 2005.
Cotton and coffee production declined very significantly in the last decade.
While there is little reliable information on the livestock sub-sector, it is
known that the country’s meat situation is deficit to the tune of over 95,000
metric tonnes annually. There is similarly a deficit of about 460,000 metric
tonnes with respect to fish.
In
Ghana, besides cocoa and coffee, cotton also known as white gold is the only
industrial crop that is cultivated in the northern part of the country. Cotton
is a major source of foreign exchange earnings in more than fifteen (15)
countries in Sub-Saharan Africa (SSA) and a crucial source of cash income for
millions of rural people in these countries. The crop is therefore critical in
the fight against rural poverty. The World Bank and other development
institutions have been and are currently assisting many cotton exporting
countries of SSA to improve their cotton sector performances through projects
supporting investment, as well as policy and institutional reforms. Over the
years, there has been a declining trend in the development of the cotton
industry inSSA. This trend is largely due to, among others, declining and
volatile world cotton prizes which have been attributed to trade distorting
interventions by countries like the USA and EU who subsidize their cotton
production. Further, there has been an increasing trend in consumption of
synthetic fibers.
Cotton is a soft, fluffy staple fiber that
grows in a boll, or protective capsule, around the seeds of cotton plants of
the genus Gossypium. The fiber is almost pure cellulose. Under natural
condition, the cotton balls will tend to increase the dispersion of the seeds.
The plant is a shrub native to tropical and subtropical regions around the
world, including the Americas, Africa, and India.
There
are four commercially-grown species of cotton, all domesticated in antiquity:
Gossypium hirsutum – upland cotton, native to
Central America, Mexico, the Caribbean and southern Florida, (90% of world
production)
Gossypium barbadense – known as extra-long
staple cotton, native to tropical South America (8% of world production)
Gossypium arboreum – tree cotton, native to
India and Pakistan (less than 2%)
Gossypium herbaceum – Levant cotton, native to
southern Africa and the Arabian Peninsula (less than 2%)
The two New World cotton species account for
the vast majority of modern cotton production, but the two Old World species
were widely used before the 1900s. While cotton fibers occur naturally in
colors of white, brown, pink and green, fears of contaminating the genetics of
white cotton have led many cotton-growing locations to ban growing of colored cotton
varieties which remain a specialty product.
Successful
cultivation of cotton requires a long frost-free period, plenty of sunshine,
and a moderate rainfall, usually from 600 to 1200 mm (24 to 48 inches). Soils
usually need to be fairly heavy, although the level of nutrients does not need
to be exceptional. In general, these conditions are met within the seasonally
dry tropics and subtropics, but a large proportion of the cotton grown today is
cultivated in areas with less rainfall that obtain the water from irrigation.
Planting time in spring in the Northern hemisphere varies from the beginning of
February to the beginning of June. The area of the United States known as the
South Plains is the largest contiguous cotton-growing region in the world. While
dry land (non-irrigated) cotton is successfully grown in this region,
consistent yields are only produced with heavy reliance on irrigation water
drawn from the Ogallala Aquifer. Since cotton is somewhat salt and drought
tolerant, it is an attractive crop for arid and semi-arid regions. As water
resources get tighter around the world, economies that rely on it face
difficulties and conflict, as well as potential environmental problems. For
example, improper cropping and irrigation practices have led to desertification
in areas of Uzbekistan, where cotton is a major export.
1.2 STATEMENT OF THE PROBLEM
The
three northern regions have good potential lands for the cultivation of cotton
in Ghana. In the Sissala East Region of the Upper West Region, cotton has been
cultivated for over three decades know. Due to the large production of cotton
within the district, the Ghana cotton company set up a gin factory in the early
eighties (1980s) to handle the production and processing of cotton within the district
then called the sissala district. As the only industrial crop that can be
cultivated within the area, many of the farmers went into the production of
cotton for the following reasons:
1. To
produce raw materials to feed the factory and
2. For
their own economic benefits.
Were
these reasons accomplished? Initially, farmers produced enough cotton to feed the
gin factory cited in Tumu, district capital of the then sissala district and
now sissala east district. The factory would operate twenty-four (24) hours a
day, seven ( 7) days a week throughout the year due to the fact that farmers
were able to meet their production targets in a season. Both permanent and
casual staffs were employed with sufficient job security throughout the year to
work in the only factory on the land. Administrators, electrical and mechanical
engineers made up they permanent staff of the company whilst some of the
drivers, senior secondary and junior secondary graduates constituted the casual
workers. The category of drivers employed included truck drivers and tractor
operators. The service of a private security firm was also hired to guard the
premises of the factory. Due to the
insufficient number of vehicles of the company in the district, trucks were
also hired to cart cotton from farm yards to the gin factory thereby improving
the financial status of truck owners within the district and beyond. Over three
decades of cultivating cotton in the sissala land, it is difficult for one tell
whether the farmers are really benefiting from the cultivation of cotton, the
environment too has never been the same since.
1.3 OBJECTIVES OF THE STUDY
The
objectives of the study are to:
·
Find out the benefits of cultivating
cotton to the farmers.
·
Assess the impact of the cotton industry
on the people of Tumu in the sissala east district.
·
Examine the environmental hazards
associated with cotton cultivation.
·
Forecast the possible seed cotton
production for the next five years.
1.4 RESEARCH QUESTIONS
For
the objectives of the study to be fully achieved, the following research
questions have been coined for appropriate answers.
a. How
long have farmers been cultivating cotton in the sissala east district?
b. What
assistance do farmers benefit from the cotton industry?
c. Does
the industry meet its annual production targets?
d. What
is the corporate social responsibility of the cotton company in the district?
e. What
are the effects of cotton production to the environment?
1.5 SCOPE OF STUDY
The
research study is an academic exercise on the impact of cotton production in Tumu,
the capital of the Sissala East District (SED) of the Upper West Region (UWR)
of Ghana. The production of cotton in Ghana is operated using the out-growers
system where farmers are pre-financed with inputs mainly fertilizers and chemicals.
The study therefore focuses mainly on Ghana Cotton Company Limited unit based
in Tumu, whose sole operations involves the provision of credits to farmers in
the form of inputs for the production of seed cotton for cash in return. Do the
farmers actually get what they deserve in return for their effort to feed the
Ghana Cotton Company with the basic raw material? Are the employees satisfied
with the terms and conditions of the company? How has the company benefited the
district? Are there any environmental
hazards associated with the operations of the company in the district?
1.6 JUSTIFICATION OF STUDY
·
The study will contribute to the
existing literature on cotton production not only in the Sissala East District,
but the nation as a whole and could be a basic tool for future policy making by
the Ghana cotton company and others.
·
This study is expected to improve upon
the level of cotton production in the district and thereby sustain the operations
of the gin factory in the district so as to boost the job security of the
factory employees by ensuring consensus building through dialogue between the
two parties, that is between the company’s management and they cotton farmers.
·
Assess the environmental impact of the
operations of the company in the district and its effect on the populace in the
district.
·
The study will also serve as a basis for
further research in the impact of cotton production and related topics by
researchers and graduate students.
1.7 ORGANIZATION OF THE STUDY
The
study report is organized under five chapters. Chapter one comprised the
background, problem statement, objectives, research questions, scope of the
study and limitations of the study. Chapter two reviewed literature related to
the study. It focuses on the cotton companies operations in Ghana, the role of
the peasant out-growers, loan management for sustainability and the credit
policy, the socio economic importance of cotton production, cotton production
in Ghana and the impact of cotton production on the environment. Chapter three
reflects the procedure used to carry out the entire study. It reveals units of
sample size and methods of sampling, the experimental design, and data
collection and analysis. Chapter four summarizes the findings and discussions
of the study. While chapter five draws conclusions and make recommendations
based on the findings of the study.
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 COTTON PRODUCTION IN PRE-
INDEPENDENT SUB-SAHARAN AFRICA
Research
by some scholars has documented the “forced cotton production policy initiated
in 1938 to support the nascent textile industry in Portugal. Peasants were
required to grow a certain number of hectares of cotton in what was evaluated
as cotton growing areas. One quick reaction by the peasants, according to
Thompson (1991) was “to cook the seeds distributed by the Portuguese before
planting them; if yields were low for three consecutive years, the area was
judged not conducive to cotton growing, and they were excused from the quota.
Many did grow cotton and when they took it to the market, they received
one-tenth of the price for the same grade as white farmers.” As a result of
this programme, food crop production stagnated and declined, along with the
emaciated bodies of the peasants. Famines became frequent. For Portuguese
merchants, the system was very profitable. Cotton production increased from
338,000kilograms in 1926 to 29 million kilograms in 1946. The rate of return on
investment was400 percent, even with the Portuguese government paying only half
the world market price for cotton” (Thompson 1991).
2.2 COTTON COMPANIES OPERATIONS IN
GHANA
Cotton
companies in Ghana provide on credit, fertilizers and insecticides and carry
outland preparation works for out-growers and purchase their cotton produce in
return. The out-growers therefore are expected to pay for the cost of inputs
through the seed cotton they in turn offer to the company during the purchasing
season. A farmer’s ability to pay back the loan therefore depends to a large
extent on the volume of seed cotton he or she produces for sale to the sponsor
Cotton Company. The gross value of the seed cotton purchased is determined at a
marketing center, the total cost of credit is deducted and the net amount (if
any), is paid to the farmer. Where the gross value of the seed cotton purchased
from the farmer is inadequate to cover the cost of inputs supplied, the farmer invariably
is deemed to have failed to pay for his loan. The operations of cotton companies
in seed cotton production involve a huge investment of funds, especially in the
pre-financing of out-growers. Inputs loan management therefore revolves around
an attempt to balance profitability and liquidity. Many business organizations
that extend credit facilities to their customers liberalize their credit terms
to generate more sales, towards possible profit. The longer the credit term,
the greater will be the amount of debtors and the greater the possible strain
on the firm’s liquidity.
2.3 INSTITUTIONAL ARRANGEMENT FOR
COTTON PRODUCTION IN GHANA
Cotton
Development Board: Recognizing the potential of cotton production, the Government
of Ghana in 1968 established the Cotton Development Board (CDB) with the
mandate to stimulate the production of cotton, ensure adequate supply of raw materials
to local textile industries and undertake research on improved varieties. The CDB
performed its functions effectively with increasing production until 1977 when production
began to fall due to declining producer prices relative to food crops. The CDB
was privatized and re-constituted into the Ghana Cotton Company Limited (GCCL) in
1985 with 30% of its shares taken by government.
2.3.1 ZONING OF COTTON PRODUCTION
Zoning
is a principle of demarcating the cotton growing areas into an exclusive zone
for particular companies. This means that, farmers within a zone are limited to
dealing only with the company assigned to operate in that zone. The zoning
principle was initiated by the Ministry of Food and Agriculture to address malpractices
in the cotton industry. At the time when seed cotton production was falling, there
was also a proliferation of cotton companies. This proliferation was
characterized by extensive malpractices by key actors. While cotton companies
poached farmers of other companies and offered unsatisfactory services, farmers
registered and received inputs from two or more companies but then sold their
cotton to other companies, thereby avoided payment for inputs received on
credit. Some farmers went to the extent of diverting some of the inputs to food
crop production and even attempted selling them on the open market. Cotton
Production Assistants (CPAs) employed by other companies to support group
formation and farmer registration also cheated their employees by registering
“ghost” farmers. The malpractices resulted in high indebtedness of the
companies to the Agricultural
Development
Bank (ADB) which has since 2000 ceased to fund the cotton companies. Consequently,
several of the smaller cotton companies were unable to operate effectively and
had to suspend operations. To date only 4 out of the 16 companies are left.
Companies currently operating in Ghana, with their corresponding zones are:
2.3.2 COTTON COMPANIES OPERATING IN
GHANA
Table
2.1 A table showing cotton companies and their zones.
COTTON
COMPANY
|
ZONE/DISTRICTS
|
Nulux Plantation Limited
|
Saboba/Chrirpon, East Gonja
|
Intercontinental Farms Limited
|
Gambaga (East Mamprusi)
|
Plantation Development
|
Wa,Bole, Nadawli, Jirapa/Lambusi
|
Ghana Cotton Company Limited
|
Yendi, Savelugu/Nanton, West Mamprusi,
East and
West Sissala Napkanduri (East
Mamprusi),
Bunkpurugu, Bolgatanga, Builsa-Sandema
|
These
four (4) companies have a total of six (6) ginneries equipped with high quality
and modern machinery.
2.3.3 GROUP FORMATION
Cotton
companies have adopted the strategy of working with farmers in small producer
groups within communities’ instead of as individual farmers. The sizes of the
Cotton Producer Groups (CPGs) vary from about three members to as many as fifty
or more members. The CPGs who are basically at the community level and are
linked to Cotton Farmers Associations (CFAs), perform the following functions:
v Conduct
initial screening of members before registration by cotton companies
v Receive
farm inputs from cotton companies for onward distribution to members
v Record data on land preparation, farm inputs
and seed cotton marketing for use by CPAs.
v Contribute
to pay any outstanding debts should any member default.
v Monitor
cotton production activities by members
The
Cotton Production Groups relate to cotton companies through zonal officers and Cotton
Production Assistants (CPAs). The CFAs are represented at the district, regional,
zonal and national levels. Although the CFAs seem to be well structured, it is
not very active as it should. The groups also lack adequate training on group
formation and dynamics and are not guided by any set principles.
2.3.4
BACKGROUND
OF GHANA COTTON COMPANY LIMITED
Ghana
Cotton Company Limited (GCCL) is a private company engaged in cotton production,
processing and marketing. It is the market leader in Ghana’s cotton industry with
a 70% domestic market share. GCCL was formed in 1985 as part of the Ghana
Government’s strategy for reviving the cotton production industry in Ghana.
Since its revival in 1985, seed cotton production has increased from a level of
856 tons in 1985/86 to over 24,000 tons in 1998/99. GCCL was initially
constituted as a semi-private company with a 30% government ownership (GCCL, 2001).The
primary focus of G.C.C.L’s operations over the last 10 years has been the
revival of the cotton industry in Ghana. It was essentially a joint venture
between government and private firms with an interest in cotton production. The
Ghana cotton industry has changed dramatically since its revival. GCCL is now a
private company with no direct government shareholding. The cotton industry in
Ghana has been completely deregulated and GCCL no longer enjoys a monopoly
position. All government subsidies have been withdrawn and all companies
operating in the industry must do so on a purely commercial basis. Until 2010 where
the Government launch the cotton support programme and farmers are enjoying subside
on fertilizers. The industry is now characterized by fierce competition. While GCCL
remains the market leader. Since deregulation of cotton industry in Ghana,
Ghana Cotton Company Limited’s main area of competition has been in the area of
production factors, particularly cotton farmers. This is because G.C.C.L’s
production is directly linked to the number of cotton out- growers it is able
to recruit and sponsor. Sponsored farmers are expected to sell their seed
cotton to GCCL. There is therefore competition for farmers among cotton
companies in the industry (GCCL, 2010). Formally, there were thirteen cotton
companies in Ghana that compete with Ghana Cotton Company Limited in the
northern savanna belt of Ghana. However, of these only four are in operation
namely, Ghana Cotton Company Limited, Plantations Development Limited (PDL), Nulux
Plantation Limited (NPL), and Intercontinental Farms Limited. Unlike Ghana Cotton
Company Limited, these companies have adopted a policy of only targeting the most
productive and profitable areas in the cotton-growing belt (GCCL, 2001).
2.3.5
THE
NATURE OF GHANA COTTON COMPANY’S BUSINESS
Ghana
Cotton Company Limited’s operations encompass all elements of the cotton production
and processing chain, from pre-financing of cotton out-grower costs to the processing
of seed cotton into lint and cotton seed. It has significant expertise in
cotton inputs procurement and distribution, logistic management, haulage
trucks, tractors and other vehicle fleet management and ginnery plant
construction, operation and management. Until recently the market for the
company’s lint was mainly the local textile firm. However, the elimination of
import controls on textiles by the Government of Ghana has resulted in the
dumping of cheap textile imports from countries such as China, and the weakening
of domestic demand for lint cotton by the local textile firms. Ghana Cotton Company
Limited now targets the export market and has strategically registered its new Pusu-Namango
ginnery plant under the export free zone scheme to take advantage of the elimination
of duties. As a free zone registered manufacturing plant, at least 70% of lint produced
from this ginnery must be exported. The cotton seed is mainly exported to Europe
(GCCL, 2006).
2.4 COTTON FOR SUSTAINABLE
SOCIO-ECONOMIC DEVELOPMENT
As
a form of employment, farmers mostly in the three Northern Regions engage in
the production of the crop to increase their incomes. Large scale cotton
production by the then Cotton Development Board of the Ministry of Agriculture
started in 1968,long after many other countries in West Africa (Mali, Burkina
Faso, Benin, Togo and La Cote d’Ivoire) had done so. Successes achieved in
these countries in terms of production continue to serve as benchmarks for
Ghana. For instance, while Ghana only managed to produce 36,000 metric tons of
seed cotton in 2006/7, Burkina Faso produced a colossal 700,000 metric tons.
The
fortunes of Ghana Cotton Company Limited (GCCL) have drastically declined over
the years due to both internal and external factors. Some of these include
little attention paid by government to the sector, the absence of subsidies to
cotton farmers, high interest rates on loans for agriculture, poor loan recovery from farmers, mismanagement
and above all, a bearish world market price for the commodity. The effect is
that the booming textile industry in the past is now a pale shadow of itself.
The few firms still in operation now have to depend heavily on raw material
imports. Cheap imported textile products price out those of local firms on the
market. If Ghana were to reverse the situation, then Ghana Cotton Company
Limited has to be supported to deliver. As it stands now, the Company is able
to attract only a few out-growers. Inadequate support to these farmers coupled
with untimely delivery negatively affect yields.
2.5 THE ROLE OF THE PEASANT OUT-GROWER
Ghana,
like many other developing countries, still depends largely on peasant
agriculture for both food and cash crops. However, improvement in the productivity
of this sector is faced by many characteristic problems and deficiencies
associated with this type of agriculture. According to the Food and Agriculture
Organization to the United Nations (FAO), “the restrictions imposed by
so-called “traditional” techniques on the household labour force are among the
main causes for the persistence of subsistence economies in tropical and
sub-tropical Africa and also in a large part of Mediterranean Africa”(ANNEX V
Inputs supply and incentive policies 1986). In sub-Saharan Africa four-fifths
of agricultural energy is provided by human labour. It is estimated that the
same proportion of arable land is worked with primitive hand tools. With such
tools the average household can only cultivate 1.5 to 2 hectares. A number of policies
have been implemented over the past twenty years to increase farm labour productivity
through a better use of energy (FAO 1986). These policies have set out to improve
hand tools, to introduce animal drawn equipment and also to promote more widespread
use of tractors. The most systematic strategies have been those implemented in
West Africa where animal traction has been encouraged to boost cotton
production and groundnut output and, in some cases, rice production (FAO 1986).
According to the FAO report, in Mali 78% of the cotton crop is now based on
animal traction, 60% in Burkina Faso and Senegal, and 38% in Chad. Peasant
agricultural production is generally undertaken in extreme weather conditions with
erratic rainfall distribution. The soil, which is cultivated usually, has
varying degrees of fertility and this leads to land productivity differential
even between farms not far apart. The lack of fertilizers and technical
know-how usually keeps the yields low. Unsatisfactory arrangements for
marketing the farm produce complicate the extent to which the peasant sector
can be assimilated into the exchange-monetized economy (Ellman 1998).
Agricultural
production in Ghana is still mostly undertaken by smallholder farmers on relatively
small plots of land and is very labour intensive. Shifting cultivation in both
the forest and savanna zones is practiced, a new parcel of land is opened up
each year for cereal production, followed usually by roots crops and plantains
in the forest zone, or groundnuts or cotton in the savanna zone. According to
Ellman (1991) “this method of cultivation is open to risks such as fluctuations
in seasonal rainfall and soil fertility and unreliable access to inputs. By adopting
a low-input method of production, risk is reduced. Yields however are also reduced,
while the ability to respond to factors such as good rainfall patterns is
further limited by the unavailability and cost of inputs such as fertilizer,
insecticides and simple farm tools.” Under these circumstances of uncertainty
and total absence of crop insurance, many peasants are scared of getting into
any type of indebtedness involving substantial monetary magnitudes. In fact it
is a virtue not to borrow. Thus one of the distinctive features of a peasant
family is collective self-reliance. According to Rwegasira (1991), “the needs
of financial capital in peasant agricultural operations are obvious
particularly where methods geared to increasing productivity are concerned”. He
contends that credit finance may be required for irrigation schemes, fertilizers,
seeds and many other related inputs. However, it is not always possible for the
finance institutions commissioned to assist these peasants to dish out money to
prospective borrowers because it is not clear how to go about evaluating the
peasant credit-worthiness.
Cotton
companies in the post-independent era therefore needed a new philosophy to attract
and maintain peasant farmers in the production of cotton. For an organization
to succeed, or simply to survive, it needs a new philosophy, which must be
directed towards sustainability. Therefore, policies put in place to direct the
overall affairs of any organization should be designed towards achieving this
goal. One such policy adopted by many organizations is the granting of credits
to customers, or alternatively granting of credits in the form of inputs loans
for the production of required raw materials that the firm urgently required.
2.6 LOAN MANAGEMENT FOR SUSTAINABILITY
Management
is the skill of attaining predetermined objectives with and through the voluntary
cooperation and effort of other people. Linder (1995), states that “The art of management
is the art of clearly communicating and diligently monitoring tasks and goals, then
fairly rewarding the people who achieve them, they have made a commitment to them
on the basis of corporate good and personal interest”. He contends that the
loan management process is not conducted in a vacuum. It is performed in
harmony with the board of directors, the CEO and the other members of the management
team. Sobol, etal. (1992) stated that “where all the sections – strings, woodwinds,
brass, and percussion – understand their interwoven roles, but none has authority
over the other. Other than the leader, the conductor, there are no “bosses” in
the symphony but they all must blend their efforts to produce just the right
sound.” Credit or loan management revolves around an attempt to balance
profitability and liquidity. This implies that many business organizations that
extend credit facilities to their customers liberalize their credit terms to
generate more sales, towards possible profit. The longer the credit term the
greater will be the amount of debtors and the greater the possible strain on the
firm’s liquidity (Denis 1987).The quality of loan management is an important
element in a profitable and soundly run financial or commercial institution.
Linder (1995), contends that capable loan management possesses the following:
v Industry expertise to assist the CEO in
planning.
v The technical expertise to design and
administer the necessary systems and controls to carry out the board’s policies
and require compliance with applicable laws and regulations.
v The ability to manage day-to-day operations to
achieve the institution’s performance goals.
The
loan manager in every organization or institution engaged in lending plays many
different roles, which should be delineated in the job description. Linder (1995),
outlines these roles to include:
·
Leader – An effective leader attempts to
realize his or her full potential and inspire subordinates to strive for their
potential.
·
Spokesman – Since the subordinates
expect their manager to represent them inside and outside the firm, these
duties cannot be ignored.
·
Adjudicator – The loan manager spends
considerable time reacting to exceptions and resolving conflicts. Negotiation
skills and conflict management are key elements of the job.
·
Nerve Center – The loan manager acts as
a central processing unit by gathering, evaluating, and disseminating
information and acting as a liaison with other areas of the organization. This
pivotal role is characterized by problem-solving and decision-making.
·
Thermostat – Constantly evaluating the
environment, the loan manager adapts the lending unit to changing conditions
such as new competitive threats or regulatory opportunities (managing change).
·
Control Tower – The loan manager
allocates the time, talent, and other resources of the lending unit to maximize
results, this role includes delegation, coaching, and counseling.
Sustainability
is usually understood in a financial sense as if a program is able to cover its
costs, it is said to be sustainable. Over the long term, however, this is no
more than one indicator of institutional sustainability, or continuing
long-term ability to manage the program so that it both maintains its mission
and is financially sustainable. According to Beets (1990), “Sustainability can
be defined as the ability of a system to maintain productivity in spite of
large disturbances such as repeated stress or a major perturbation”. For Ghana
Cotton Company Limited, the perennial decline in seed cotton production coupled
with heavy deficits on unpaid loans is a big challenge to the management of the
company.
2.6.1
CREDIT
POLICY
A
credit policy refers to those decision variables that influence the amount of
trade business organizations extends to their customers (Pandey 1995). The
starting point in formulating a credit policy is the characteristic credit
terms of the industry. A firm must meet the terms provided by other firms in
the industry. However, when the customer is a poor credit risk, the terms would
be altered in a downward direction to protect the firm extending trade credit.
According to Beets (1990), “a central task in formulating credit policy is an
evaluation of the credit worthiness of the potential customer. To evaluate the
credit risk, the credit manager considers the “Cs” of credit: character, capacity,
capital, collateral, and conditions”. He further explains the “Cs” as follows:
•
Character :-“This refers to the probability that the customer will honour his
obligations. This factor is of considerable importance because every credit
transaction implies a promise to pay. There is thus a moral hazard of whether
the promise will be fulfilled”.
•
Capacity :-“This is judgment of the ability of the customer. This is gauged by
the past record of the business”.
•
Capital :- “This is measured by the general financial position of the firm.”
•
Collateral :-“This is represented by assets which the customer may offer as a
pledge for security of the credit that is extended to him”.
•
Conditions :-“This refers to the impact of general economic trends on the firm
or special development in certain areas of the economy that may affect the customer’s
ability to meet his obligations” (Beets 1990).
The
credit policy of a firm affects its working capital by influencing the level of
book debts. The credit terms to be granted to customers may depend upon norms
of the industry to which the firm belongs. But a firm has the flexibility of
shaping its credit policy within the constraint of industry norms and
practices. According to Pandey (1995), “the firm should be discretionary in
granting credit terms to its customers. Depending upon the individual case,
different terms may be given to different customers. A liberal credit policy,
without rating the credit-worthiness of customers, will be detrimental to the
firm and will create a problem of collecting funds later on”. Studies have
repeatedly pointed to the need for a greater supply of institutional
credit-especially where hired labour and modern inputs are needed to raise
productivity. Thus, though the institutional mobilization of rural savings is
essential, it may be counterproductive to abolish or undermine rural credit
beforehand. Lele (1992), points out that this is because costs of purchased
inputs increase when currencies are devalued, subsidies are removed, and internal
transport costs are increased as a result of the general inflation caused by
devaluations but there is relatively little further scope to raise prices. The
promotion of cash purchases even as input prices increase is likely to reduce
input use, especially among low-income producers. Financial Business
organizations hardly do without granting some credits. Many organizations
extend credits to their trusted customers with ulterior motives of increasing their
sales turnover, in order to improve the profit margin. In view of these
motives, trade creditors rely on several sources of information to assess the
customer’s credit worthiness.
The
feedback received shall be analyzed, the outcomes of which will be part of
final decision either to grant the creditor or not. Some micro-financing
programs have worked successfully. The rate of recovery in some cases is about
97% (Harper 1998). The basic reason could be that the beneficiaries are more
conscious of their obligation to repay their loans. In some instances timing of
credited livery is the best. However, certain unfavourable micro-economic
environment has not assisted beneficiaries of various credit schemes.
Beneficiaries of credits must develop a credit culture in which borrowers
understand they need to repay and creditors have trust that this obligation
will be honoured. Inadequate credit, either from the government or commercial
banks, is clear factor that deters production of agricultural products. The
policy prevails that peasants must have substantial collateral in order to
borrow. Programmes of credit for marginal farmers, who need it most, are
non-existent or minimal. In Zimbabwe, for example, only 10% of the peasants
receive loans compared to 95% of the large-scale commercial farmers (Thompson
1991). According to Thompson, (1991) “in some of the least endowed communal
lands, the percentage of peasants receiving loans is as low as 2 or 3 percent.
This is consistent with the policy of the Agricultural Finance Corporation
(AFC) to avoid loans to high risk producers, yet it defeats the growth with
equity, goal of the government,
producing the same discrepancies in incomes as in production”. Credit for
peasant production has the same negative bias in virtually all the sub- Saharan
countries, and solutions are not easy to find. Most credit schemes in these
countries will continue to support the master farmers, rather than assist the
marginal farmers over the threshold to lucrative production. Dorward etal,
(1998) contends that the culture of strategic default by smallholder borrowers
in Africa is a major deterrent to commercial investment in smallholder agriculture.
Politicians have done much to encourage this damaging mindset. They should provide
the lead in moving to the new "rules of the game" in liberalised
markets. The message in the late 1990s should be that the rules of the game
have changed. In liberalized marketing systems, reliable repayers should be
rewarded with access to future lending, whilst defaulters will find themselves
unable to profit from borrowing. In some national cotton production chains,
inputs can be provided to farmers beneath the real cost by correlatively
reducing the seed cotton purchase price as compensation. In Ghana, in
principle, only the seeds are free of charge and the other inputs are sold at
cost price. The attained bank credit levels forced the Company to buy,
recently, inputs under supplier’s credit, a more costly operation whose
financial cost is given in the input cost price and not in financial charges
(GCCL 1996).
2.6.2
THE
CREDIT PERIOD
Pandey
(1995) defines credit period as “the length of time for which credit is
extended to customers”. It is generally stated in terms of a net date. For
example, if the firm’s credit terms are net 35‟, it is expected that customers
will repay credit obligation not later than 35 days. According to Pandey (1995)
a firm’s credit period may be governed by the industry norms. But depending on
its objective, the firm can lengthen the credit period. On the other hand, the
firm may tighten its credit period if customers are defaulting too frequently
and bad-debt losses are building up. The credit period available to cotton
out-growers is normally the whole cotton-growing season, that is, from May to
February the following year. Within this period, the company commences the
credit procedure by providing land preparation and inputs distribution lasting
approximately six months (May to October). Because of the system used, producers
are indebted to the company until their seed cotton is marketed. The marketing of
the seed cotton usually covers a period of three months (November to February
the following year).
2.6.3
SOURCES
OF LOANS FOR THE PEASANTS
There
are, or have been, in most countries, special schemes through which poor
people, particularly in rural areas, can access loans. These loans are usually
at very low rates of interest, and are thus potential loss makers for the
banks. Loans under these schemes are also often tied to particular activities
or inputs, which have not been chosen by the borrowers and may not be suitable
for them. According to Harper, (1998) “this only exacerbates the problem of
non-payment, which is itself often abetted by political interests, and the
result is that few people benefit, and whatever credit culture that may have
existed is destroyed and the banks are forced into massive losses. Bankers come
to regard banking for the poor as political chicanery, as charity, or as a
necessary but loss-making government-mandated necessity”. In micro financing,
as in many fields, the institution that does the job may be more important than
the details of the job itself. There are certainly many examples of
well-designed programmes which have failed because the implementing
institutions were unable to manage them properly, as well as successes which
clearly owed more to the competence of the institution than to the virtues of
the program itself. Mismanagement may be the fault of incompetent managers
rather than the institution as a whole, but the wrong institution, even with
the best managers, is unlikely to be able to make a success of a micro finance
program, however well it has been designed ( Harper1998).An appraisal done on
the operations of Ghana Cotton Company Limited in 2001 by a mission composed of
three CFDT experts (Gilbert Dorey, Economist; Bernard Esteulle,Agronomist; and
Jean-Marc Guimard, Ginning expert) stated in their draft report that, “GCCL is
virtually in the situation of suspension of payment. The support from Agricultural
Development Bank, which is also second shareholder (15%), enables to pursue the
activity. Lint cost prices are far too high, mainly because of fixed charges in
excess for a company of that size and of back up to cotton growers (inputs,
motorization and credit) showing a deficit”.Ellman (1998) on his part indicate
that, “a firms success and even survival, it’s ability and willingness to
maintain production and to invest in fixed or working capital are to a very considerable
extent determined by its financial policies, both past and present”. Financial
goals of a firm are the quantitative expressions of the firm’s mission and strategy,
and are set by its long-term planning system as a trade-off among conflicting
and competing interests. For most people in commercial banking, lending
represents the heart of the industry. Loans therefore dominate assets holdings
and generate the largest share of operating income. As with any investment,
extending loans to businesses and individuals involves taking risks to earn
high returns. Returns come in the form of loan interest, fee income, and
investment income from deposits. The profitability of agricultural loans follows
cyclical trends in the farm economy (Kock 1998).Kock, (1998), contends that
“agricultural loans are similar to commercial loans and industrial loans in
that short-term credit finances seasonal operating expenses, in this case, those
associated with planting and harvesting crops. Much like working capital loans,
the proceeds are used to purchase inventory in the form of seed, fertilizers,
and pesticides and to pay other production costs. Farm operators expect to
repay the debt when the crops are harvested and sold. The fundamental source of
repayment is cash flow from the sale of harvested crops in excess of operation
expenses”. Agriculture loans however differ from other loans because
agriculture is perceived by most governments to be a vital national industry.
Most governments therefore lend considerable sums to farmers through its farm
credit system. Banks often work with some agencies to keep farmers operating,
even when it appears that they will sustain large near-term losses. Loan losses
are a natural by-product of extending credit. Banks and other institutions
lending credits cannot forecast with perfect accuracy which loans would be paid
in a timely manner. Otherwise, no bad loans will be made without some form of
fraud. Still management can pursue policies that limit problem loans (Koch,
1998).Problem loans and loan losses are caused by a variety of factors, some
controllable and some uncontrollable. According to Koch (1998) “controllable
factors are those that reflect overall bank policy as well as inadequate credit
analysis, loans structuring, and loan documentation. Uncontrollable factors
typically reflect adverse economic conditions, adverse changes in regulations,
environmental changes surrounding the business operations, and catastrophic
events. While there is little to be done to prevent uncontrollable problems,
effective credit-granting procedures can significantly reduce other sources of
losses”. The Food and Agriculture Organization (FAO) indicates that, “a number
of credit institutions are just not experienced enough to handle small farmer
credit so other approaches must be envisaged. Amongst these, of interest is an
already existing system, which could still answer certain needs. Credit is
distributed through an industrial or export crop marketing body. Guarantee of
loan recovery at the time of marketing has, in fact, enabled these credit
systems to function fairly well whenever the marketing bodies have been run
along relatively competitive lines. These systems have also proved to have initiative,
as shown by the introduction of group credit or barter systems which by-pass
the financial institutions. The inputs, which are provided in advance, are paid
for, in kind, after the harvest. Though these systems are limited by their
specific nature they are nevertheless justified in well-defined circumstances. Desai
(1993), identify a host of reasons for delinquency in repayment of agricultural
loans in some selected countries. For example the delinquency in the repayment
of loan is attributed to the delay in loan sanction, low crops yield, adverse
weather, and delay in getting animal traction package. Roberts (1985) focused
on those small farm holders who can generate sufficient production and income
to have a surplus above their subsistence and immediate family requirements,
which they can use to repay a loan. He identified four general categories of small
farmers and rural poor as follows:
•
The small holders who have enough land and labour to produce subsistence living
and also surplus but fail to do so because of lack of management and required
inputs.
•
The farmers who may have the same amount of land as the previous category, but
have a tenant status.
•
The farmers who do not have sufficient land to feed themselves under any known system
that they can develop at present.
•
The landless labourers who depend on agriculture for their living.
According
to Roberts (1985), “Many agricultural financial institutions sponsored by Governments
have attempted to advance loans to the first three categories above without any
sound method of distinguishing between those recipients who could, and would,
repay except under very adverse circumstances and those who either could not or
would not repay. The result has been failure to establish a continuing sound
financial system for those small farmers who are motivated and would develop if
they received the proper training in technical skills and sound farm management
plus the necessary capital inputs.” The main factors which seem to have
influenced agricultural production in most African countries, according to
Chole (1990), include input policy; guaranteed producer prices, “reliable”
market facilities, research and extension policy and provision of
infrastructure and roads. Added to this is the role of the political party
machinery and farmers‟ clubs and other local institutions in mobilizing rural
population to engage in agricultural activity”. The management of input loans
to cotton out-growers requires a new philosophical approach. Most of the
information available in the literature review is based on management of inputs
supplied to food crop farmers. Nevertheless, the information gathered therein
is appropriate in finding answers to problems of managing the input loan scheme
run by cotton companies in Ghana as well. A combination of exploratory and
descriptive research was conducted to enable the researcher get a clearer
understanding of the challenges facing management of Ghana Cotton Company
Limited with respect of loan management. Both primary and secondary data was
collected from the company and other stakeholders like the out-growers. Information
from the Accounts, Internal Audit and Production were gathered with the permission
of the management of the company. Data gathered from various sources therefore
constitute the basis for any conclusions to be made.
2.6.4
GROUP
LIABILITY
Lending
to groups has been a feature of many donor and NGO programmes. In seasonal agriculture,
all have to borrow at the same time, and all face similar patterns or risk, so that
in a bad year, group liability may actually encourage group default. To avoid
this, monitoring of borrowers production
activities by the lender is required and repayments may need to be rescheduled
where factors outside farmers control
genuinely undermine their ability to repay. Commercial micro-finance schemes
inspired by the Grameen Bank, typically also work on the principle of group
liability. However, many rely on regular repayments as a substitute for
monitoring of loan use which has limited their relevance to seasonal
agricultural production. Meanwhile, some contract farming schemes have
collapsed as a result of opportunistic traders offering to buy farmers'
production at higher output prices than those available within the scheme.
Stringfellow et al (1996), report some success in using group liability mechanisms
to strengthen repayment in interlocked contracts for high value crops within relatively
concentrated (albeit still multi-buyer) output marketing systems. As contract farming
schemes often include an advisory component, this provides an opportunity for the
lender to monitor the production activities of borrowers. The process of group formation,
however, requires care, particularly when the instigation comes from the lender
rather than group members themselves. Success may therefore depend on the
presence of commercially-oriented NGOs able and willing to provide the
necessary group "animation".
2.7 PRODUCTION AND YIELD LEVELS IN
GHANA
In
Ghana, cotton is produced in the three northern regions; Upper East, Upper West
and Northern Regions. Since the evolution of cotton production in 1968, the
trend in volumes produced has rather been erratic and production has never
reached 40,000 tonnes. Yield levels have never exceeded 800kg/ha. There is a
striking difference when Ghana is compared to Burkina Faso. Burkina Faso is
actually producing more cotton each year (since 2004) than the total cumulated
production of Ghana since 1968. Ghana’s cotton production amounts to less than
1% of the West and Central African production, although Ghana has excellent
conditions for cotton production. The trend is shown in the graph below.
FIGURE 2.1 A graph showing cotton production in Ghana and
Burkina Faso.
The
productions of cotton in Ghana in metric tons from the year 2000 to 2005
respectively are as follows 35,503, 17,506, 22,851, 16,822, 20,155 and 21,000,
metasip(2010).
CHAPTER
THREE
3.0
METHODOLOGY AND PROFILE OF SISSALA EAST
DISTRICT
3.1
METHODOLOGY
3.1.0
INTRODUCTION
This
chapter presents the research methodology. It details with the process that was
used to conduct the study. The study was prepared in an empirical manner.
Therefore primary data is the main basis of the study. Data from secondary
sources found relevant to the work was equally sourced. The study was largely
incorporated a variety of methods to produce the expected output.
A
brief profile of the district in which the study area is located is also
included in this chapter. The profile includes the location and size, the
relief and drainage systems, vegetation and climate and the demographic
characteristics of the district.
3.1.1
RESEARCH
DESIGN
The
researcher considered the nature of the research study and decided to adopt the
descriptive and exploratory research techniques. The descriptive research
technique seeks to determine the answers to who, what, when, where, and how
questions that may arise from the study in dealing with the objectives of the
research. Descriptive research method may provide important information in many
situations that is needed to solve basic problems. Descriptive research
techniques also provide accurate information, although errors cannot be
completely avoided. This type of research will attempt to determine the extent
of differences in the needs, perceptions, attitudes, and characteristics of
sub-groups (Mark 1997).
Exploratory
research on the other hand is the type of research, which is conducted to
clarify or define the nature of a problem. It does not give conclusive evidence
in itself. Rather, it opens up for more research work to be done. Exploratory
research is therefore conducted with the expectation that subsequent research
will be required to provide conclusive evidence (Mark 1997). The design is
further narrowed to a case study of a particular geographical location and
specifically on the Sissala East District, Tumu of the Upper West Region of
Ghana.
3.1.2
STUDY
POPULATION
The
study population will be the management staff of the Ghana Cotton Company
Limited in the Sissala East District, Tumu. Field staff in the company engaged
in the supervision of the farmers cotton fields. Potential respondents were
farmers who are engaged in cotton production and persons who could provide
vital information on the subject matter.
3.1.3
SAMPLE
SIZE AND SAMPLING PROCEDURE
The
process of sampling involves any procedure that uses a small number of items or
parts of a whole population to make conclusions regarding the whole population.
A combination of sample techniques was used to determine sample population and
sample units. Non probability sampling was found relevant to the study hence
methods of non-random sampling were largely used. Simple random sample
techniques such as purposive sampling and quota sampling methods were used to
select management of GCCL and cotton out-growers.
3.1.4
DEVELOPMENT
OF INSTRUMENTS
The
researcher used surveys as a method to generate primary data. Survey is a
research technique in which information is gathered from a sample of people by
use of a questionnaire. The research study relied solely on both primary and
secondary data for information required for the research work.
3.1.5
PRIMARY
DATA
The
researcher carried out interviews with Ghana Cotton Company Limited sponsored
farmers in the Sissala East District, Tumu. This tool was used to elicit
information regarding their performance for the years. Self-administered
questionnaires were sent out to the management of GCCL Tumu. The task of
writing a questionnaire, determining the list of questions, and designing the
exact format of the questionnaire is an essential aspect of the development of
research design. The researcher therefore adopted the use of questionnaires and
in-depth personal interviews to gather information from management and farmers
respectively.
a)
SELF-ADMINISTERED
QUESTIONNAIRE
This
method was one of the most challenging to the researcher because it relied
solely on the efficiency of the written word rather than an interview.
Respondents in this category included management staff of Ghana Cotton Company
Limited and other field staffs who provide technical advice to the farmers. The
researcher therefore decided to use this tool because of the under-listed
advantages:
•
Geographical Flexibility,
•
Relative low cost,
•
Respondent convenience,
•
Standardized questions.
The
self-administered questionnaires were used to gather information from ten
management staff on issues relating to:
•
The existing policies put in place to ensure that cotton farmers are able to
utilize their inputs loans and fulfill their obligations with the company.
•
What alternative mechanisms should be put in place to transfer the risk of
producing cotton to the out-growers?
•
Their personal views about the sustainability of the company in the face of the
declining loans recovery.
•
Measures or strategies needed to recapture the market share in the cotton
industry.
•
In their opinion why farmers are failing to produce enough cotton to pay off
their loans.
•
How management think sustainability can be achieved.
b)
PERSONAL
INTERVIEWS
These
are direct communications wherein interviewers in face-to-face situations ask
respondents questions. The researcher spent between 20 to 25 minutes in
interviewing cotton farmers in the Sissala East District who are predominantly
illiterate and some staff members of the Ghana Cotton Company Limited in Tumu.
The
reason for the choice of this method includes:
•
Opportunity for a feedback.
•
Opportunity to ask probing questions.
•
Length of interview is ideal and flexible.
•
Expects high participation.
The
majority of the farmers interviewed were uneducated peasants farmers and
therefore questionnaires were avoided. Rather personal interviews were
conducted with the majority of the farmers. The farmers were asked questions
relating to:
▪
The farmer’s age and gender.
▪
Number of years in cotton production.
▪
What motivates him or her to crop cotton.
▪
Other farms apart from cotton fields.
▪
Number of farm hands
▪
Sources of financial or other assistance to manage farm land.
▪
Reasons for not being able to pay off input loan.
▪
What measures the sponsored companies should adopt to improve its services to
out-growers.
▪
who owns cotton farms.
▪
What kind of help, if any does a farmer need.
3.1.6
SECONDARY
DATA
Secondary
data was primarily obtained from GCCL to monitor the number of farmers, total
number of hectares cultivated for cotton production and the output recorded
over the past ten years.
3.1.7
METHOD OF DATA ANALYSIS
Secondary
data collected from the Sissala east district assembly and GCCL Production unit
in Tumu forming about 10% of the entire data gathered. The researcher therefore
used tabulation as a means of analyzing the secondary data gathered. Primary
data generated from the respondents was also be analyzed. The main method of
analysis was descriptive, making use of time series and forecasting in t.
Statistical Package for Social Science (SPSS).
3.2.0
BRIEF DISTRICT PROFILE
3.2.1
LOCATION AND SIZE
The
Sissala East District is located in the North- Eastern part of the Upper West
region of Ghana. It falls between Longitudes. 1.300 W and Latitude.
10.000 N and 11.000 N. The district has a total land size
of 4,744 sq km – representing 26% of the total landmass of the region. It
shares boundary on the North with Burkina Faso, on the East with Kassena
Nankana and Builsa Districts, to the South East with West Mamprusi District,
South West with Wa East and Nadowli Districts and to the West by Sissala West
District.
The
district, due to its position, has an advantage for trade and other cross
border activities. This locational advantage is a potential for the development
of the local economy. This notwithstanding, the district by its location, also
faces the threat of illegal immigrants from neighbouring countries. An example
is the insecurity posed by the insurgence of Fulani herdsmen into the district
which has become a yearly ritual.
On
the whole however, the Sissala East district, by its location, is well
positioned for enhanced socio-economic, cultural and political interaction with
the neighbouring districts as well as Burkina Faso.
3.2.2
RELIEF
AND DRAINAGE
The
topography of the Sissala East district could be described as gently
undulating. It is generally characterized by gentle latitudes of between 330
and 365m in the northern part descending to 220m and 290m in the Valley of the
Sissili River. The district is mainly drained by the Sissili River and its
tributaries flowing in the south-eastern direction to join the White Volta.
This is coupled with several tributaries and other unnamed streams. A
significant characteristic feature of most of these rivers and streams is their
perennial nature of their flows. The flow of the Sissili River itself reduces
to intermittent pools in the dry season. The constant drying of the rivers
necessitate the drilling of boreholes to supplement the seasonal shortage of
water in the district which in one way might have accounted for the out
migration of the population during the dry season. The numerous tributaries of
the Sissili River provide an advantage for the construction of more dams in
addition to the already existing ones. The rich valleys of the Sissili River
maintain a vegetative cover that provides an abode for wildlife and further
protect the land from erosion.
3.2.3
VEGETATION
AND CLIMATE
Sissala
East District is located in the Guinea Savannah vegetation belt. The vegetation consists of grasses with
scattered fire resistant trees such as the Sheanut, the Baobab and Dawadawa
trees. Acacia is also a common tree of this vegetation belt. The heterogeneous
collections of these trees meet domestic requirements for firewood and
charcoal, construction of houses, cattle kraals and fencing of gardens. The shorter shrubs and grasses provide fodder
for livestock. These activities need to be enhanced by providing the
appropriate means of transport for them.
But they have to be appropriately controlled and managed if the
environment is to be sustained. The
sheanut tree is one of the great economic assert of the District and head
portage has been the most common means of transporting the fruits from the farm
to the house. The climate of the Sissala East District is tropical continental
as experienced in the northern regions of Ghana. Throughout the year, temperatures are high
with a minimum of 23ºC at night and a maximum of 42ºC during the day and this
favours plant growth. The mean monthly temperature ranges between 21ºC and
32ºC. The highest monthly maximum temperature rises up to 40ºC before the rainy
season in May with lowest minimum temperature falling to about 12ºC in December
when the Harmattan winds from the Sahara dries up the vegetation.
The
rainfall type which is conventional in nature is characterized by a single
rainy season from May to September/October. That is five to six months with the
total number of rain ranging between 70 to 80 days with a mean annual rainfall
of about 121mm as recorded in Tumu station in 1999, with extreme annual
rainfall ranging between 397mm and 635mm. As a result of the single maximum
rainfall prevailing in the district all year round, crop production is mostly
done during the rainy season (May to September/October). However, since farming
is the major occupation of the people, it means that their major sources of
livelihood and income are limited during the dry season apparently resulting in
the migration of the youth to the south in search of greener pastures. There is
thus, the need to have adequate
irrigation facilities to promote and enhance agricultural activities in the dry
season. In addition, it is imperative to identify and provide alternative
source of livelihood to the people to complement their occupation and improve
their income generating capacity.
The greatest climatic influence on the vegetation in
the district is the long dry season from November to March when the relative
humidity is very low and the vegetation dries up under the influence of the dry
harmattan winds. The forest reserves
cover a total area of about 267sqkm and encourage a rich stock of mammalian
wildlife.
3.2.4
DEMOGRAPHIC
CHARACTERISTICS
The
district population is currently estimated at 56,528 (2010) with an annual
growth rate of 1.7% and a population density of 12 persons per sq. km which is
lower than the regional and national averages of 24 and 77 respectively Out of
the current estimated total population of 56,528, males make up 27,503 and
females 29,025 thus giving male/female ratio us 51:49. Patches of high density
are found in the relatively urban settlement such as Tumu, Wellembelle, Sakai,
Nabugubelle, Nabulo and Bujan. The settlement pattern is highly dispersed that,
it takes one not less than 10km to the next community. Majority of these
settlements are rural by nature.
TABLE
3.1: Sex Distribution.
YEAR
|
TOTAL
|
FEMALE
|
MALE
|
AVERAGE HH SIZE
|
2000
|
52,165
|
26,872
|
25,293
|
|
2010
|
56,528
|
29,025
|
27,503
|
6.4
|
Source: Ghana Statistical Service, 2010
The
table 1.2 below details the population for two (2) broad age groups as per the
recent release of the Population and Housing Census data.
Dependency
Analysis: This gives an age dependency ratio of about 1:1 indicating that there
is less pressure on the working population and the high propensity or ability
to save.
TABLE
3.2: Age Distribution and Population Growth Trend
Age
Yrs
|
1-17
|
18+
|
||||
TOTAL
|
FEMALE
|
MALE
|
TOTAL
|
FEMALE
|
MALE
|
|
2000
|
23,758
|
11,964
|
11,794
|
28,407
|
14,908
|
13,499
|
2010
|
27,544
|
13,133
|
14,133
|
28,984
|
15,614
|
13,370
|
Source:
Population and Housing Census, 2010
FIGURE
3.1: Map of Sissala East District
Source:
SEDA
CHAPTER
FOUR
4.0 DATA PRESENTATION AND ANALYSIS
4.1 INTRODUCTION
This
chapter attempts to analyze both the primary and secondary data collected with
methodologies already discussed in the previous chapter.
4.2 DEMOGRAPHIC CHARACTERISTICS OF
RESPONDENTS
Respondents
were classified into the following demographic characteristic:
v Age
and gender
v Educational
attainment
v Family
size and marital status
In
view of the researcher, these demographic characteristics have so much bearing
on responses given by the respondents on the state of cotton production in the
district. In all, the study sampled 50 respondents basically males in terms of
gender. The reason for a unitarily male dominated sample of respondents is that
female mostly do not farm cash crops as cotton, those with cotton farms are
usually managed by sons and hence where represented by them in the sample.
Besides this, it is believed that female farmers are very good in vegetable
production and also assist their male counterparts on their farms.
TABLE4.1:
A table showing the age distribution of respondents
AGE OF RESPONDENT
|
|||||
Frequency
|
Percent
|
Valid
Percent
|
Cumulative
Percent
|
||
Valid
|
20
- 30YEARS
|
19
|
38.0
|
38.0
|
38.0
|
31
- 40YEARS
|
22
|
44.0
|
44.0
|
82.0
|
|
41
- 50YEARS
|
8
|
16.0
|
16.0
|
98.0
|
|
50+YEARS
|
1
|
2.0
|
2.0
|
100.0
|
|
Total
|
50
|
100.0
|
100.0
|
Source:
Researcher’s Fieldwork. May, 2013
Of
the fifty (50) respondents sampled, the age bracket 31 – 40 years has the
highest frequency of 22 counts making up 44% of the sample population. This is
followed by the age bracket 20 – 30 years with a count of 19 comprising 38% of the
sample population. The age bracket 20 – 40 years makes up the working group in
the district in terms of agricultural production. The age bracket 41 – 50+
years have a total count of 9 constituting 18% of the sample population
indicating that little is expected from people from this bracket because very
few of them farm cotton in the district.
In
a nutshell, the production of cotton in the district cuts across all age groups
in the Sissala East District with majority of the farmers falling within the
age group 20 – 40 years constituting the productive age.
The
figure below gives a pictorial view of the age distribution of the respondents
who are into cotton production in the district.
FIGURE
4.1: A pie graph showing the age distribution of respondents in percentage
Figure
4.2 is a cluster graph that represents the marital status of respondents
categorized according to their ages. The number of married respondents is 31
counts making 62% of the sample size and the rest with a count of 19
constituting unmarried or single respondents. Three are married whilst sixteen
unmarried within the age bracket 20 – 30 years, nineteen are married whilst
three unmarried within the age bracket 31 – 40 years, within the age bracket 41
– 50 years and 50+ years, there are only eight and one married persons
respectively. There are no divorced cases.
FIGURE
4.2: A cluster graph showing the frequencies of the age and marital status of
respondents
In
term of education, respondents of the study area were quite literate. About
10.00% and 8.00% had had secondary and tertiary education respectively. 42.00%
had acquired basic education, and 40% having no education at all. This level of
literacy as shown in table 4.2 enhanced the research, especially during the
data collection.
This was because most of the respondents
understood the issue involved in the topic “the impact of cotton production on
the people of the Sissala East District, Tumu of the Upper West Region.”
Besides
education, the level of experience in the cultivation of cotton by the
respondents has also imparted their contribution.
TABLE
4.2: A table showing the educational distribution of respondents
EDUCATIONAL
LEVEL
|
|||||
Frequency
|
Percent
|
Valid
Percent
|
Cumulative
Percent
|
||
Valid
|
NON
|
20
|
40.0
|
40.0
|
40.0
|
PRIMARY
|
7
|
14.0
|
14.0
|
54.0
|
|
JSS/JHS
|
14
|
28.0
|
28.0
|
82.0
|
|
SSS/SHS
|
5
|
10.0
|
10.0
|
92.0
|
|
TERTIARY
|
4
|
8.0
|
8.0
|
100.0
|
|
Total
|
50
|
100.0
|
100.0
|
Source:
Researcher’s Fieldwork. May, 2013
Due
to the respondent’s long experience in agricultural practices, about 82.00%
have sited their farms three miles or more away from their homes. This is
because the farmers in the study area practice the extensive system of
livestock rearing thereby considering it prudent locate their crop farms away
from the livestock.
4.3 CREDIT FACILITIES
The Ghana Cotton Company Limited of the Tumu
zonal area assists farmers with credit facilities such as land preparation,
inputs such as fertilizers and pesticides, viable seeds and free consultation
within the study area. All respondents make use of this provision to enable
them cultivate the seed cotton for the company. Almost all of them are
beneficiaries of the credit facilities provided by the company. Cotton
Production Assistants (CPAs) employed by the company to support group formation
and farmer registration are also responsible for the distribution of these
credit facilities to the farmers.
Unfortunately,
poor yields experienced by farmers over the years have been the major reason
for their inability to pay for the facilities credited to them. Whereas some
farmers in the same locality presented attractive yield per unit, others
performed woefully with reasons such as;
Ø The
irregular phenomenon of the weather.
Ø Late
land preparation for the crop production.
Ø Diversion
of the inputs to other crops.
Ø Poor
germination of seed provided and
Ø Late
inputs distribution.
Desai
(1993) identified a host of reasons for the delinquency in repayment of
agricultural loans in Upper Volta which include the delay in loan sanction, low
crop yield, adverse weather and delay in getting animal traction, a situation
not different in the Sissala East District.
58.00%
of the respondents are satisfied with the terms and conditions of service
provided by the company with the reason that the credit facilities offered them
is encouraging and boost their production if properly applied.
4.4 OBLIGATION OF GCCL TO THE DISTRICT
4.4.1
CORPORATE
SOCIAL RESPONSIBILITY
The
corporate social responsibility of GCCL is the process of continuous
improvement in standard of business practice and actions relating to our
community engagements, environmental safeguards and dealing with people.
Conduct business with high levels of integrity and responsibility that is
governed by credible principles and honour its business obligations with
absolute integrity.
GCCL recognize that success and satisfaction
depends on the growth and development of the community in which we live. As
part of our commitment to the community, GCCL supports the economic development
of the community by contributing to bring measurable improvements in the lives
of people. They will continue to contribute financial resources towards
promoting good health, provision of portable water and the general improvements
in the standards of living of people.
GCCL
is a place where all employees feel valued and ready to contribute to the
vision of the company, regardless of gender, ethnicity, religion, sexual orientation
or gender identity.
The
company upholds the human rights of staff, eliminate any form of employment
discrimination and all forms of illegal workplace practice, treat staff with
dignity and respect and pay competitive wages and appropriate benefits. The
company also respects the freedom of association of all employees. GCCL’s
labour conducts comply with the relevant international conventions and labour
laws of Ghana.
Developing ways to conserve and protect the
environment is central to the operation strategy of the GCCL. The management
policies of GCCL also aim to ensure the compliance of the environmental
protection legislations of Ghana and thrive to reduce pollution at all levels.
4.4.2
IMPACT
OF GCCL ON THE DISTRICT
Very
little can said concerning the impact of GCCL in the district by the
respondents besides the company’s premises. The company has insignificantly
contributed towards infrastructural development in the district since its
inception. Last year, the company donated an ambulance to the district hospital
for the transfer of health cases within the district which was warmly welcomed.
Besides
the company’s regular staff, an average number of twenty four thousand, eight
hundred and fifteen (24,815) farmers are contracted yearly with each
cultivating an average of 0.9 units in the cultivation of seed cotton for the
company. Most of these farmers financially are able to meet their economic
demands through the output of their farms thereby reducing the level of poverty
in the district.
4.5 GCCLs IMPACT ON THE ENVIRONMENT
The
activities of farmers during the cultivation of seed cotton come along with a
series of practices that are of concern regarding the environment. These
practices include land preparation and the use of agrochemicals which degrade
the land and affect the natural habitat. While habitat conversion is a problem
associated with the activities of cotton production, the most important
production impacts are the use of agrochemicals (especially pesticides) and
water. The quality of soil and water and the impact on biodiversity in and
downstream from the fields are also major concerns. Finally, because of the
high use of pesticides there are a number of human health concerns, both for
farm workers and for nearby and downstream populations.
4.6 THE FUTURE OF THE COTTON
INDUSTRY IN THE DISTRICT
The
amount of seed cotton that is produced annually by the farmers in the district
varies tremendously due to the disparities of the terms and conditions at the
beginning of each season. In the season 2000/01, the number of farmers who
cultivated seed cotton is 37,308 with an average unit per farmer being 0.9. In
the 2002/03 season, 16,050 farmers cultivated seed cotton for the company with
an average unit per farmer being 0.8 and 29,719 farmers produced in the 2005/06
season with an average unit per farmer being 1.27.
Figure
4.3 shows the variations encountered in the level of production of seed cotton
from 2000/01 season to 2012/13 season. The figure also shows a linear trend
model for seed cotton production in the district indicating a declining trend.
A feasible five year production output for seed cotton has been forecasted with
the following results ceteris paribus (other things being equal).
Fitted Trend Equation: Yt =
15175 - 723.768*t
Where
t is the time period and also the independent variable and Yt is the dependent
variable or the forecast.
TABLE
4.3: A table showing the forecast for the next five years.
Period Forecast
|
2014 5042.50
|
2015 4318.73
|
2016 3594.96
|
2017 2871.20
|
2018 2147.43
|
FIGURE4.3:
A trend analysis plot for seed cotton
CHAPTER FIVE
5.0
SUMMARY OF FINDING, CONCLUSIONS AND RECOMMENDATIONS
5.1
INTRODUCTION
This section of the
study presents the summary of findings, conclusion and it then proceeds to
offer recommendations based on the findings drawn from the study.
5.2.1
SUMMARY
OF FINDING
As a form of employment,
farmers mostly in the three Northern Regions engage in the production of seed
cotton to increase their incomes. Large scale cotton production by the then
Cotton Development Board of the Ministry of Agriculture started in 1968,long
after many other countries in West Africa (Mali, Burkina Faso, Benin, Togo and
La Cote d’Ivoire) had done so.
Successes achieved in
these countries in terms of production continue to serve as benchmarks for
Ghana. For instance, while Ghana only managed to produce 36,000 metric tons of
seed cotton in 2006/7, Burkina Faso produced a colossal 700,000 metric tons.
The fortunes of Ghana
Cotton Company Limited (GCCL) have drastically declined over the years due to
both internal and external factors. Some of these include little attention paid
by government to the sector. The absence of or insufficient subsidies to cotton
farmers, high interest rates on loans for agriculture, poor loan recovery from
farmers, mismanagement and above all, a bearish world market price for the
commodity.
As it stands now, the Company is able to
attract only a few out-growers. Inadequate support to these farmers coupled
with untimely delivery negatively affect yields.
The story of the Sissala East District is
indifferent as the number of farmers continues to reduce annually together with
drastic low annual records of production.
The constraints and
challenges encountered by cotton farmers in the Sissala East District include:
- LATE INPUT DELIVERY
Timing is very
important for good cotton yield. Inadequate credit facilities results in
untimely delivery of inputs to cotton farmers. Tractors for ploughing are in
short supply and contribute to delay in preparation of land for cultivation.
- POOR QUALITY SEED
The cotton industry
depends on third or fourth generation seeds imported from neighboring
countries. Good treated cotton seeds are scarce and not accessible. Seed from
neighboring countries cannot be guaranteed and the conditions under which they
are transported contribute to a large extent to the low viability and vigor of
the cotton seed.
- POOR PRODUCER PRICE
The producer price of
seed cotton is very low and deters farmers from engaging in its cultivation. As
the price has remained constant over the years, cost of inputs has been
increasing.
- INADEQUATE LABOUR
Cotton production is
labor intensive. In the producing areas, there is competition for labour for
weeding of cotton and sorghum at the same time. Additional labour is therefore
needed to support cotton farmers.
- INADEQUATE EDUCATION AND EXTENSION SERVICES
Farmers in general have
low literacy levels and inadequate technical skills. The CPAs who provide
extension services, are themselves hardly trained and lack technical skills in
cotton cultivation. The ratio of Agricultural Extension Agents (AEAs) to number
of cotton farms is woefully inadequate.
- SUBSIDIES
There are various
trade-distorting interventions in the cotton market. The most important being
the domestic support (subsidies) given to cotton farmers by the US and the EU.
Several studies have indicated that cotton prices on the world prices would
have been higher by 10% to 15% if the subsidies were substantially reduced. In
addition, the subsidies also results in excess supply of cotton which further
amplify price fluctuations
The Company’s broken down fleet of tractors
and haulage trucks compounds the problem. In spite of the fact that Company
plans to cultivate 30,000
hectares of cotton come 2011, this may not succeed if
support does not come by way of a re-engineering of the Company. Credit is
essential for agricultural development in the developing countries.
Circumstantial evidence shows that where agriculture has grown rapidly,
institutional credit has expanded more quickly. Although farmers as producers
greatly prefer to hold their savings in physical productive assets on their own
farms, they must also rely on external credit at various point in time,
generally because the realization of income and the act of expenditure do not
occur at the same time. A cotton farmer, for example, harvests his crop once in
a year, whereas his consumption is continuous. In order to shift production
functions upwards, farmers must be able to purchase modern inputs such as high
yielding varieties of seeds, fertilizers, and irrigation equipment. Thus l
ending companies like GCCL should promote both credit and deposit services:
credit to tide farmers over the deficit period and to enable them to take
advantage of the new technological opportunities. It is very important that
before recommendations are made certain pertinent issues must be discussed.
These issues relate to the future of the input loan scheme and cotton
production potential in Ghana.
5.2.2
CONCLUSION
The Sissala east
district is endowed with fertile land capable of bettering the standard of
living of the local people if adequately put to use especially in agricultural
processes. Cotton being a major cash crop that has good potentials of high
yield in the district can be a source of employment to the people of the
district who are predominantly farmers if much attention is given to it. Credit
is the kingpin for development of any industry and it is rather so in the case
of the cotton industry in Ghana, which is not considered to be a highly
remunerative field. Credit is essentially required by farmers who cannot afford
to meet certain requirements out of their own resources. The mere provision of
credit for one or two items is not adequate enough for a cotton input loan
scheme to yield the desired results. All the problems of mounting overdue and
bad debts facing GCCL as a result of out-growers poor yield would not
miraculously stop. The causes of such problems are many and more complex. They
can only be handled adequately in a multifactorial way at both the managerial
as well as farmers level. Adequate control measures are therefore recommended
to ensure that the out-growers honour their obligations to produce enough seed
cotton to sustain the cotton industry in the district and pay off their loans.
5.2.3
RECOMMENDATIONS
As a measure of
improving and sustaining the industry and also providing a source of livelihood
for the farmers, the following recommendations have been suggested:
- the formation of cotton producer groups, development of animal traction, pre-financing farmers and subsidies on agricultural inputs to reduce cost of production.
- Any medium term strategies should include the introduction of a crop rotation system with food crops that would help the restoration of soil fertility.
- As a long term strategy, it is prudent to work towards the establishment of an autonomous sustainable revolving fund that would support the activities of cotton farmers. In Tanzania for instance, the Tanzania Gatsby Trust (TGT) launched a special programme to increase cotton production to 1,500,000 bales by the year 2015 from the current 700,000 bales. It did set aside $7.2 million for the period 2008 to 2010.
- Major policy decisions including the adoption of Genetically Modified (GM) technologies and drip irrigation systems to improve productivity and to reduce costs ought to be considered. The U.S., China, India and many other countries have applied GM Technology with considerable success.
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Mosley, P. (1993).
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of maize and sorghum yields in Kenya, Malawi and Zimbabwe,1960-1991. Discussion
Paper in Development Economics 6. Department ofEconomics, University of
Reading.
Pandey, I. M. (1995).
Financial Management. New Delhi. Vikas Publishing House PVTLimited. Ravegasira,
K. (1991). Financial Analysis and Institutional Lending Operations Management
in a Development Country. Dar es Salaam. Dar-es Salaam University Press.
Roberts, R.A.J. (1985).
Farm Management: Inputs to Rural Financial Systems Development. (FAO
Agricultural Services Bulletin 65).
Sissala East District Assembly
(2012). The Profile of the Sissala East District.
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APPENDIX A
UNIVERSITY FOR DEVELOPMENT STUDIES
FACULTY OF MATHEMATICAL SCIENCES
FINANCIAL MATHEMATICS OPTION
NAVRONGO CAMPUS
QUESTIONNAIRE FOR THE
COTTON FARMERS IN THE SISSALA EAST DISTRICT
These questionnaires
are intended to collect data that will help the researcher to “Assess the Impact of Cotton Production on
the people of Tumu, the Sissala East District of the Upper West Region”.
The exercise is for academic purpose only. Whatever information you give will
be kept confidential. Please, complete this questionnaire with appropriate
answers with brief reasons or tick where necessary.
Date …………………………………….
BACKGROUND OF
RESPONDENTS
1. Gender: Male [ ] Female [ ]
2. Age:
i. 20 – 30 years [ ]
ii. 31- 40 years [ ]
ii. 41-50 years [ ] iv. Above 51 years [ ]
3. Marital status
- Married [ ] ii. Single [ ] iii. Divorced [ ]
4. Family type
- Extended family [ ] ii. Nuclear family [ ]
5. What is your family
size?
- 1-4 [ ] ii. 5-9 [ ] iii. 10-14 [ ] iv. 15-19 [ ] v. 20+ [ ]
6. What is your level
of education?
- non [ ] ii. Primary 1-6 [ ] iii. JSS/JHS [ ] iv. SSS/SHS [ ] v. Tertiary [ ]
7. Farmer’s community
of residence is ……………………………………..................
8. The community in
which farm is located is …………………………………….......
9. Distance of farm
from place of residence
- One mile radius [ ] ii. Two miles radius [ ] iii. Three miles radius [ ]
iv. Four miles radius
[ ] v. More than four miles radius [ ]
10. What is the size of
your farm?
- 1-5 hectares [ ] ii. 6-10 hectares [ ] iii. 11-15 hectares [ ]
iv.
16-20 hectares [ ]
v. 20+ hectares [ ]
11. Do you hire labour
to work on your farm?
- Yes [ ] ii. No [ ]
If yes, answer question
12, otherwise GOTO question 13.
12. What type of labour do you hire to work on
your farm?
i. Unskilled
[ ] ii. Semi-skilled [ ] iii. Skilled [ ]
13. Do you receive
assistance from the cotton company?
- Yes[ ] ii. No[ ]
14. If yes, what
assistance do you get from the company?
i
Ploughing of farmland(s) [ ] ii. received seeds [ ]
iii received inputs [ ] iv.
free consultation [ ]
v. Others ( specify) ………………………………………………………
15. How long have you
been farming cotton?
- 1 - 5 years [ ] ii. 6 - 10 years [ ] iii. 11 - 15 years [ ]
iv.
16 – 20 years [ ] v. More than 20 years [ ]
16. Are you happy with
the terms and conditions of service of the company?
i. yes [
]
ii. No [ ]
17. How has the company
benefited the district?
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
18. What is/are your
reason(s) for your answer?
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
19. How can the
production of cotton be improved in the district?
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
APPENDIX B
UNIVERSITY FOR DEVELOPMENT STUDIES
FACULTY OF MATHEMATICAL SCIENCES
FINANCIAL MATHEMATICS OPTION
NAVRONGO CAMPUS
QUESTIONNAIRE
FOR THE COTTON COMPANY PERSONALS IN THE SISSALA EAST DISTRICT
These questionnaires
are intended to collect data that will help the researcher to “Assess the
Impact of Cotton Production on the people of Tumu, the Sissala East District of
the Upper West Region”. The exercise is for academic purpose only. Whatever
information you give will be kept confidential. Please, complete this
questionnaire with appropriate answers with brief reasons or tick where
necessary.
Date…………………………………
BACKGROUND OF
RESPONDENTS
1. Gender: Male [ ] Female [ ]
2. Age:
i. 20 – 30 years [ ]
ii. 31- 40 years [ ] iii 41-50 years [ ]
iv. Above 51 years [ ]
3.
Division:………………………………………
4. Position
held:………………………………….
5. What is the core business of the company?
i. Pre-financing the production of seed
cotton ii. Marketing and
processing of seed cotton
iii. Sale of farm
inputs to farmers
6. What is the current
market share of the company’s operation?
i. 100%-80%) ii. 80%-60% iii. 60%-40%) iv. Below 40%
7. What marketing
strategies do you employ to attract farmers to grow cotton?
…………………………………………………………………………………………………………………………………………………………………...................................................................
………………………………………………………………………………………………………………………………………………………………………………………………………………
8. Do you compete with
other companies or organizations for the farmer?
i. Yes [
] ii.
No [ ]
9. What type of credit
facilities do you offer to your farmers to produce cotton?
i. Cash [ ] ii. Farm Inputs [ ] iii. Both cash and inputs
[ ]
iv. Others
(specify)………………………………………………………………………………
10. Does the company
cultivate its own farms? i. Yes
[ ] ii. No [ ]
11. What is the most acceptable mode of
re-payment of credits by farmers?
i. Seed cotton [ ] ii. Cash [ ] iii. Any other
method [ ]
12. Who determines the seed
cotton price?
i. The cotton companies
[ ] ii. The farmer
[ ] iii. Government [ ]
iv. Cotton farmers and
companies [ ]
13. In your opinion is
the seed cotton price attractive to the farmer?
i. Yes [ ] ii. No
[ ]
13. How will you describe the percentage rate
of credit repayment over the past three years?
i. Very good [ ] ii. Good [ ] iii. Bad [ ]
iv. Very Bad [ ]
14. What has been the percentage rate of loan
recovery for last years?
i. 100%-80% [ ] ii. 79%-60% [ ]
iii. 59%-39% [ ] iv. 39% and below [ ]
15. How can cotton
production be improved in the districts?
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
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