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The economic potential of oil palm for Ghana and many other developing countries in the tropics is substantial but largely remain unharnessed. Employing both quantitative and qualitative methods including treatment effect models, this study examines the yield difference between adopters and non-adopters of oil palm Best Management Practices (BMPs) among a large number of smallholder farmers and how this may be shaped by factors mostly relating to sectoral innovation system challenges. We found fertiliser application to be the only BMP which independently had a statistically significant yield difference. However, we found further that the adoption of more than any five of the BMPs also had a significant yield difference even after one controls for the effect of fertiliser application. These results tend to vary by the size of the oil palm plots and also appear to be largely associated with differences in the commitment of the farmers to implementing the BMPs, their capacity to absorb the investment cost of adoption and their expected monetary returns on such investment, which are linked to challenges within the oil palm value chain and sectoral innovation system. Our quantitative results are stable under different estimation models and variations in control variables.

Best management practices for sustainable oil palm production: the case of smallholder farmers’ adoption in Ghana