Profitability analysis of cashew production in Wenchi municipality in Ghana

Abstract

This paper examines smallholder cashew farmers’ socioeconomic characteristics and the profitability of cashew production in Wenchi Municipality of Brong-Ahafo Region of Ghana. The study used primary data which was collected from 140 randomly selected cashew farmers. Data for the 2009-2010 was collected through administration of a questionnaire. The methods of analysis used were discounted measures of project worth (net present value, benefit-cost ratio and internal rate of return). The results show that a one-hectare cashew plantation has a net present value of GH¢260.82 ($343.16) when discounted at 25%, a benefit-cost ratio of 1.13 and an internal rate of return of 43.85%. These indices show that cashew production is profitable. Government, non-governmental organizations and investors are therefore encouraged to consider cashew production in the Wenchi Municipality as an option to improve farm income and reduce poverty. Future studies on analysis of profitability of cashew apple processing are necessary because it can increase earning and add value to cashew production. Work on the analysis of the profitability of processing cashew apple is also necessary because existing research does not cover this important area and it was also not within the scope of the current study.