Ghana’s palm oil industry is under increasing pressure from climate change, extreme weather patterns, and volatile global prices, raising concerns about its long-term sustainability and impact on farmers’ livelihoods, according to Solidaridad, a civil society organisation advocating for sustainable production and trade.

In its Palm Oil Barometer 2024, Solidaridad warns that erratic climatic conditions have made income levels for oil palm farmers highly unstable—allowing them to earn a living wage in one season while leaving them in financial distress the next.

Sustainability Demands and Market Exclusion


The report notes that global sustainability requirements are intensifying, but efforts to meet these standards often result in the exclusion of smallholder farmers from high-value markets. These barriers, Solidaridad argues, threaten to undermine the economic potential of Ghana’s palm oil sector unless addressed with inclusive and locally relevant solutions.

Despite these challenges, Ghana’s minimum pricing policy for palm oil has been a positive development. Introduced in 2023, the policy mandates that fresh fruit bunch (FFB) collectors and mills pay no less than the minimum monthly price set by the Tree Crop Development Authority (TCDA) and endorsed by the government.

Solidaridad says the policy has helped reduce price exploitation and improve incomes in rural farming communities. The collaborative approach—where processors and regulators jointly set fair benchmarks—has brought greater transparency to the value chain and boosted trust across the sector.

Price Volatility Undermines Stability


However, price volatility remains a major challenge. Between May 2020 and March 2022, the global price of palm oil rose sharply from US$576 per tonne to US$1,776, before falling below US$1,000 in 2023 and continuing into 2024. According to the United Nations Conference on Trade and Development (UNCTAD), the volatility of vegetable oil prices—including palm oil—has increased significantly since 2020 compared to the 2016–2019 period.

This instability makes it difficult for farmers to plan or invest in long-term improvements. Solidaridad highlights that with current low yields and an average farm size of just two hectares, most smallholder oil palm farmers in Ghana are still unable to earn a living income, despite the pricing policy.

Path Forward: Enforce Standards and Support Smallholders


To ensure a resilient and inclusive palm oil sector, Solidaridad urges regulators like the TCDA to enforce voluntary sustainability standards that align with global market requirements while protecting the livelihoods of smallholder farmers.

“The sector has made progress, especially with pricing reforms, but if we don’t invest in improving yields and supporting smallholders to meet sustainability benchmarks, the most vulnerable will continue to be left behind,” the report concludes.