The HPW – IDH project provides solutions to mitigate the pineapple scarcity and the mango and pineapple oversupply during peak seasons. Limited processing capacity during the mango peak season (5-6 months per year) results in pineapple farmers not being able to sell their pineapples to the processing factory and losing income. As a result, farmers abandon pineapple growing and look for income alternatives. In 2014, Ghana’s production of pineapples was so low that it caused a shortage of supply to factories and processors.

HPW is a dried fruit processor and exporter in Ghana. They source pineapples from smallholder farmers, processes and sells to retailers in Europe. In June 2015, HPW AG became a member of one of the initiatives of IDH, the Sustainable Initiative for Fruit and Vegetables (SIFAV). This decision was triggered by SIFAV member Coop Switzerland, a Swiss retail company which buys the HPW products.

To build the inclusion of smallholder farmers in pineapple production in Ghana, the project objectives include:
  1. to set up tightly managed block farms for the pineapple farmers providing farmers with training, land, and pre-financing of inputs
  2. to pasteurize fruit in over-supply peaks for further processing in low season

HPW sources pineapples from smallholder farmers, processes the pineapple and sells the final product on to retailers in Europe. The company designed a block farm model with co-funding from IDH to improve raw material supply to its factory and increase farmer incomes. HPW also sources from its own pineapple farms to supplement smallholder farmer production.

According to the block farm model, HPW leases around 10 acres of land for three to five years and assigns one acre to each farmer involved. Pineapple farmers are selected from existing cooperatives. The model enables HPW to reach out to a large group of smallholders with support services in a more efficient manner and control critical stages in the cultivation process to reduce the risks of sub-standard supplies.

The farmers involved in the block farms (block farmers) have access to the specific technical support provided by the HPW agronomists and extension officers. Training is conducted to introduce the farmers to good agricultural practices, new farming methods and the required applications of pesticides and fertilizers. At least once a month progress is monitored on the block farms.

In addition to training and extension support, HPW pre-finances the land acquisition and preparation (ploughing and clearing amongst others) and provides inputs such as forcing materials, plastic, fertilizer, and herbicides to all farmers involved. The cost of all support is covered by HPW and is deducted at the point of supply after the harvest. The block farm model serves as a learning center. The idea is that the farmers who receive the training will also be able to implement the new technics and practices in their individual fields.

  • Promote a dynamic pineapple production sector in Ghana
  • Improve livelihoods of smallholder pineapple farmers
  • Secure supply of high quality pineapple
  • Knowledge transfer from the block farm to the farmers’ own farms
  • Develop farmers’ capacity for the improvement and expansion of pineapple production
  • Create resources necessary for the re-investment of earnings

 

 

IDH supports the HPW – IDH project to include smallholder farmers in pineapple production in Ghana for a number of reasons:

  • Inherent job creation for the local communities
  • Smallholder inclusion with the technical know-how transfer to local farmers
  • The scale of its commercial value, with HPW being a top exporter with clients across the EU
  • HPW’s function as a direct buyer providing smallholder farmers with a lucrative market by purchasing fruits at a competitive price.

IDH is also proud that this project was the first-time investment in a scheme of this nature in Ghana, and West Africa as a whole.

Below we will show the key results from this project, the learnings and explain the benefits for both farmers and the company.

Through improved agricultural practices and learning to farm a new variety of pineapple, farmers have increased their supply of pineapples to the factory, leading to an increase in farmer incomes.

  • A higher profit is earned on the block farms (€699 more per acre) for the same size of land
  • Average yield for the block farms is 3.85 MT/acre, compared against the average for the control group of 1.92 MT/acre. The control group includes smallholder farmers outside the block farms
  • Major learnings for the block farmers include input application, pest management, and record keeping

The block farm project saw the realization of the first 13 block farms in 2016 and reached 25 block farms in March 2018, two of which are organic. A total of 225 block farmers are involved in the project on a total area of 288 acres. Farmers selected for the block farm project are pineapple farmers who belong to 14 producer cooperatives located in various parts of Ghana, and that also own their own piece of land. Due to the process of establishing the block farms, which requires time to identify the land available to be rented or bought by HPW, the different block farms are at various stages of production. Four block farms have harvested their first cycle of pineapple production, another six are now in the second cycle phase, and eleven are still in their first cycle of production.

  • Block farmers earn 23% more profit relative to the control group. The control group includes smallholder farmers outside of the block farms.
  • On average, block farmers earn EUR 237 more profit per year, relative to the control group
  • 80% of the block farmers have adopted learnings from the block farm model.

Pre-financing of inputs, services and peer support are critical success factors for the block farm model, and pre-financing of inputs and land preparation by HPW is highly beneficial

The block farm model is a self-sustaining scheme

  • Farmers profits are reinvested
  • Labor costs are cheaper on the block farm
  • Ensures a steady flow of raw materials to the factory
  • Increased supply by 16% to HPW processing

In 2018, HPW and IDH have evaluated the block farming model: the economic aspects, and the impact for both farmers and HPW. The key results and benefits for both the farmers and the company have been explained above. We have also learned that:

  • 60% of the block farmers claimed to have learnt better planting techniques
  • Ease of access to farmer support services has improved
  • HPW’s requirement of farmers to de-crown pineapples leads to additional costs for the block farmers. Pineapples are de-crowned for preparation for processing
  • Mango processing at the factory limits HPWs capacity to receive more pineapple

To sustain the benefits gained so far, it is recommended that the company maximizes low-hanging fruits to improve farmer satisfaction in the following areas a) improving its relationship with smallholder farmers and b) exploring third-party inclusion to minimize its financial exposure.

The support received from IDH was critical to kick-starting the block farm project. The funding provided by IDH has led to increased incomes and new learnings for farmers on the block farm as well as facilitated the increased supply of quality pineapples to our factory. We will continue to provide support to pineapple growers until economic benefits have compounded and less support is required to produce efficiently and sustainably.

HPW

Does HPW create value for farmers through the block farms and is the block farm model sustainable for the company without external support?

The block farm model creates economic value for the farmers, and for the company as well, as it ensures a steady flow of raw materials to the factory. On average, the block farm yields €484 more in profit for farmers on the block farm project than HPW’s farm and €237 more for block farmers than the farmers in the control group for the same production.

Farmers value their relationship with HPW, they credit their knowledge gain on new production methods to HPW’s training and financial support. They also credit technical supports a reason for a higher yield than they are used. Block farmers only appear to be disgruntled in the aspects of transparency on price fixing, and de-crowning of pineapples at harvest.

The block farm model is a self-sustaining scheme, profits from farmers can be reinvested into subsequent pineapple production cycle, and the harvest serves as supply to the factory. Also, mother plots have been established for the procurement of high-quality suckers and consequently, a reduced cost of production on subsequent production rounds.

It is evident that most farmers would not have mastered pineapple production without HPW’s support, however, ensuring continuity of sustainable production will involve further optimization of the learning and support process. This is because it is easier for farmers to comply with the right protocols when inputs and technical support are readily available. The gains and impact of the block farm model can be further sustained via the company’s existing initiative for pineapple producers.

Overall, farmers view HPW’s training as being effective and beneficial. 55% of the company’s interaction with farmers is during training, 45% of the encounter is farm visits. 92% of block farmers interviewed affirmed that the practices learned during the training sessions were beneficial to them. 88% rated the training as being of high impact and stated that although block farmers have been producing pineapples for an average 14.9 years, most were not familiar with standard production methods taught by HPW training.

About 89% of block farmers identified fertilizer and pesticide application protocols as a new technique learned during the training on the block farm.

A farmer recalled, ‘We didn’t know we had to apply fertilizers more than once after planting, but they (HPW) taught us the right things, and the difference is evident.’ 60% also claimed they had learned better planting techniques such as plant spacing, use of plastic mulch, as well as improved methods for record keeping. 16% cited weeding methods. On the ease of farmers’ access to these services, 88% find it easy; 12% ‘fairly easy.’

Most of the block farmers interviewed (80%) claimed to have implemented the learnings also on their farm. Of those who declared to have implemented the new techniques learned in the block farm on their private farms, 88% asserted to have experienced benefits. Productivity is said to have been increased by an average 31.6% based on knowledge acquired on the block farm. This was credited to lower incidence of pest, bigger fruits, shorter production cycles, uniform growth on fields, and lower post-harvest losses. The most significant impact reported was knowledge of production methods for a new variety (100% of block farmers agreed to this). While the HPW factory accepts both Smooth Cayenne and MD2 pineapple varieties, farmers consider the training and support provided for the MD2 variety as more beneficial since it’s bought by HPW at a higher price.

However, some of the block farmers admitted that they did not implement learnings on their private farms accrediting this to the lack of funds, which hinders them from procuring inputs promptly. According to these farmers, being part of a block farm is the primary advantage since they are not only trained but also empowered to implement practices immediately with the right inputs.

In 2015, HPW was unable to meet buyers’ demand due to a low supply of raw material (pineapples). This situation influenced the decision to establish a more systematic approach of interaction with the smallholder farmers to enhance the supply of high-quality raw materials to the factory. From this perspective, the block farms would be considered beneficial to the company if it ensures a steady flow of raw materials to the factory. In the first round, the block farmers produced about 150MT of pineapples more than projected. Generally, the number of pineapples supplied to the factory increased by 29%.

Infographic

Ghana is one of Africa’s leading pineapple producers and exporters. Ghana’s pineapple industry rose with the hope of expanding exports of processed food to acquire a footing in the international markets. The value of fruits and vegetable contribution to Ghana’s export has increased significantly from the early 1990s (approximately two million); in 2016, Ghana earned US$30.4 million from pineapple exports making the country the ninth highest earner from pineapple exports. According to the FAO, the success of the pineapple industry in Ghana had been touted in the past as an example of how a strong and direct link between the producers and processors in the fruits and vegetable market is a tool to reduce poverty and create employment.

Between 2001 and 2004, there were approximately 50 exporters in Ghana. About 40% of them were not engaged in direct pineapple production but relied on smallholder farmers for supply. The country, however, has been facing an unprecedented crisis – a decline in exports since then. In 2004, the fresh pineapple export industry experienced declined volumes principally due to a shift in market demand in Europe to the MD2 variety of pineapple.

The shift in market demand from Smooth Cayenne to MD2 in Europe is attributable to the low acidity of the MD2 variety which makes it ideal for sea freight. Another reason being that the shape of the fruit also sits well on supermarket shelves; and logistic arrangements of post-harvest handling compared to the post-harvest processing of the Smooth Cayenne variety of pineapple in Ghana. A lack of capacity (financial and knowledge) by the smallholder farmers to switch from the commonly produced Smooth Cayenne variety to MD2 has concentrated the industry and shrinking profits. As a result, between 2004 and 2013, total production of pineapples cultivated by smallholder farmers diminished, while large-scale plantations were set up by processors and exporters.

Even though for large-scale processors of pineapple it is common practice to combine the production from their plantations with contracting smallholder farmers, MD2 now constitutes about 90% of total output in Ghana, with smallholder farmers accounting only for about two percent of current production volumes.

In 2013, 14 companies were exporting fresh pineapples from Ghana, most of them located in the Awutu Senya District of the Central Region. Eight of these (Golden Exotics Ltd, Bomarts Farms, Milani Ltd, Jei River Farms, Gold Coast Fruits, Koranco Farms, Prudent Farms, and Georgefields Farms) account for 93% of fresh pineapple exports.

The HPW Special Initiative on Pineapple Production (SIPP) is a deliberate policy put in place by HPW Fresh & Dry Ltd to promote and increase pineapple production of contracted farmers to increase fresh supply to the factory. The SIPP program provides support to farmers with inputs for scaling up their production. The selection of farmers is based on the results on the block farm and on the evaluation of the potential to increase pineapple production on the individual farm. An increase of pineapple production area (land) and the yield of farmer’s block farm are primary criteria. The company aims to integrate two to five farmers per block farm into the SIPP program. For the SIPP, a farmer is selected based on how effective the farmer has adopted learnings and yields of pineapple harvest.

For the farmers admitted in the SIPP, HPW covers the following production costs:

  • Land preparation (50%)
  • Plastic Mulch
  • Inputs like fertilizers, fungicides, insecticides, and weedicides
  • Technical support

The support of pineapple production on individual farms is aimed at the conservation of soil fertility to maintain good pineapple yields. Indeed, SIPP farmers are sensitized to conserve soil fertility by allowing the land to recover from pineapple production for at least one year. In this period other crops should be grown, ideally cover crops, and the land should rest as a fallow land for some months before re-planting pineapples.


 

Contact us

  • Annelotte Crena de Iongh

    Program Manager, Fresh and Ingredients

  • David Black

    Programm Officer, Fresh and Ingredients

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