Financial costs and benefits of investing in the production of Allanblackia spp. as a tree crop

Allanblackia spp. (AB) has been identified as an alternative source of income for cocoa farmers in Ghana. The integration of this tree crop into cocoa farming systems has, therefore, been initiated. Currently, farmers collect the nuts from wild trees scattered in and around cocoa farms. The domestication of AB is being championed by foreign investors [Unilever Research & Development (R&D), Netherlands) in collaboration with the Forestry Research Institute of Ghana. Feasibility studies suggest that the integration of AB into cocoa farming systems is viable for farmers if the financial support from foreign investors is implemented. It is important to assess the viability of domesticating this tree crop without foreign support, so that local entrepreneurs who want to go into the production of AB would understand the real cost and return issues. This paper presents the results of a financial cost-benefit appraisal of AB in the forest region of Ghana, using alternate viability measures [Net Present Value (NPV), Benefit-Cost Ratio (BCR) and Internal Rate of Return (IRR)]. Results of this study indicate that the benefits to be derived from investing in AB domestication are quite high. The NPVs were positive, BCRs were greater than one and the IRRs ranged from 26 to 40%. The findings of the study suggest that AB production is a financially viable investment. The challenge is how to create competition for its demand so as to maintain a higher market price for the crop.