Charting the Path to Increased Oil Palm Output in Ghana Beyond Area Expansion: Technology or Managerial Capacity — Which Leads the Way?

This study sets out to investigate the prospects for raising oil palm output in sub‐Saharan Africa, particularly Ghana, without further expansion of cropland. Given global concerns about oil palm's role in deforestation and land use change, the focus is on enhancing productivity on existing farmlands. Utilizing a unique, nationally representative dataset of 2046 farm households spanning 1987−2017, we evaluate the current state of oil palm production technologies and the efficiency of their use by farm families in Ghana. The study employs the stochastic metafrontier framework to account for regional differences in production technology and managerial capacity and gauge the performance of these productivity indicators across Ghana over these three decades. Our findings indicate that, on average, smallholder producers use only 44% of their accessible stock of oil palm technology, operating at an average managerial capacity of 69%, with a very low metafrontier technical efficiency score of 28% over the period. These findings suggest that had oil palm technology and managerial performance kept pace with time over these three decades, technical efficiency relative to the metafrontier would have expanded by 72%, leading to an average land savings of 37% for other uses. Consequently, greater potential for oil palm output growth lies in technological advancement than in farmers' ability to efficiently use these technologies.