Ghana’s palm oil industry is facing mounting sustainability pressures, with climate impacts, market instability, and low farm productivity threatening the livelihoods of thousands of smallholder farmers.
According to Solidaridad’s Palm Oil Barometer 2024, global sustainability requirements for palm oil are increasingly locking out small-scale producers from profitable markets, placing additional strain on rural economies already battling fluctuating prices.
The report, however, highlights Ghana’s minimum pricing policy for oil palm as a rare bright spot. Introduced and enforced by the Tree Crop Development Authority (TCDA), the policy has helped curb price exploitation, improve transparency, and boost incomes in rural farming communities.
Since 2023, collectors and mills have been required to pay at least the minimum price set by the TCDA.
Solidaridad urged regulators to go further, calling on the TCDA to ensure voluntary industry standards are rigorously enforced and aligned with global market requirements to protect farmers’ long-term interests.
Price instability remains a major concern. Palm oil prices surged from US$576 per tonne in May 2020 to a peak of US$1,776 in March 2022, before dropping below US$1,000 in 2023, a level that persisted into 2024.
Data from the UN Conference on Trade and Development (UNCTAD) confirms that vegetable oil price volatility between 2020 and 2023, including palm oil, was significantly higher than in the 2016–2019 period.
This volatility makes income planning nearly impossible for farmers, most of whom operate on just two hectares of land with chronically low yields. Solidaridad’s findings show that despite recent periods of relatively strong prices, many smallholders remain unable to earn a living income.
Nonetheless, the relative success of Ghana’s pricing policy lies in its collaborative approach, with government officials and processors jointly setting commercially viable benchmarks.
This balance, they argue, protects farmers’ earnings while safeguarding the competitiveness of processors.
While the policy has improved transparency in Ghana’s palm oil supply chain, the report warns that without targeted interventions to improve yields, expand farm sizes, and integrate smallholders into premium markets, the sector will struggle to achieve true sustainability.
Solidaridad added that Ghana’s oil palm sector stands at a crossroads with the right mix of pricing stability, productivity improvements, and market access, it could secure both farmer livelihoods and environmental sustainability in the years ahead.
