Financial costs and benefits of investing in domesticated “Sonkyi” (Allanblackia spp) in the forest region of Southern Ghana

Irene Susana Egyir and George Tsey-Mensah Kwadzo

No 95783, 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa from African Association of Agricultural Economists (AAAE)

Abstract: The integration of “Sonkyi” Allanblackia spp into cocoa farming systems has been initiated in Southern Ghana. Currently, it is a collection activity although its domestication is being championed by Unilever R&D Netherlands in collaboration with the Forestry Research Institute of Ghana. Feasibility studies suggest that the venture is viable for farmers if the financial support assurances by Uniliver would be sustained. It is important to assess the feasibility of ‘no support’ so that those private sector entrepreneurs who want to venture into this activity would understand the real cost and return issues. This paper presents the results of a financial cost-benefit appraisal of AB investment in the Western Region of Ghana. Using alternate viability measures, i.e. Net Present Value (NPV), Benefit-cost ratio (BCR) and Internal Rate of Return (IRR) the results show that the benefits to be derived from the AB investment are quite high; the IRRs range from 26% to 40%. The findings of the study suggest that AB production is a financially viable investment; the only challenge will be how to sustain the sole buyer demand and adequate prices.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 16
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaae10:95783

DOI: 10.22004/ag.econ.95783

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