4 Promotion of tree plantations

4.1 Technical aspects

4.1.1 Species and growing conditions

Due to the limited experience in the country with respect to commercial plantations establishment, progress can only be made by combining any relevant local lessons learnt with proven technologies in similar areas of the tropical world especially in West and Central Africa. Experiences with such tree crops as rubber in the country (e.g. GREL) give pointers to the feasibility of undertaking such a venture if the proper silviculture and high quality forest management are applied through effective supervision and training. The introduction of the appropriate incentives to motivate potential investors is also required.

The risks associated with any uncertainty can be minimized through species diversification and the use of mixed stands. This will provide options to switch product types in the event of market failure or glut and the susceptibility of the plantations to diseases.

FAO (1998) has undertaken an extensive study of the prospective species for plantation formation in Ghana. This was based on the assessment of the performance of the species in plantations in the country and other tropical regions in conjunction with information on their natural growing conditions. The selected species are as shown in the table below.

Table 6. Species recommendations for the ecological zones

All the recommended species have been tried by FORIG and/or the FD. The species on which little information is available locally is Piptadeniastrum africanum. It has, however, a successful history as a plantation species, particularly in Cote d’Ivoire although there is little information about potential yields. The characteristics of the species including their growth requirements are given in Appendix 2 and 3.

Comments on some of the isolated indigenous species by the FORIG based on provisional calculations of growth rates (see Appendix 3) are:

• Triplochiton scleroxylon (fast growing, problem is irregular fruiting patterns, supplementation with vegetative propagation of seedlings required);
• Ceiba pentandra (fast growing, high survival rates, low incidence of pests);
• Terminalia superba (not affected by die-back as T. ivorensis, even though Ambrosia beetles pose a threat to its survival); and
• Heritiera utilis (fast growing, high survival rates).

The species and their proposed mixtures as recommended by the FD are given in Appendix 4.

4.1.2 Growth rates

Of the species that have been planted by the FD, yield tables have been compiled for only teak. This was derived from data from temporary sample plots of stands of ages 10 to 25 years and extrapolated to 50 years. The other yield table that was also derived from temporary sample plots is that for the Gmelina arborea on the SIPL plantations in the western region of Ghana. The plots used covered stands with ages up to 27 years.

Both these site index curves are provisional and require to be field tested and upgraded. They are depicted in Figures 3 and 4. Due to the poor management of the plantations, the indicated yields can be considered as conservative estimates. Higher yields are possible with high quality planting stock and proper management.

A recent inventory of the SIPL Gmelina arborea plantations (stands up to 27 years) gave the following results (Table 7).

Table 7. Summary by stand yield class (m³/ha/year) - SIPL Gmelina arborea plantations

Source: Odoom (1998)

No thinnings have been carried out in the SIPL plantations due to lack of market for the smallwood. Maintenance of the stands has also been adversely affected by budgetary constraints.

Figure 3. Site Index curves for teak (Tectona grandis)

Figure 4. Site Index curves for Gmelina arborea

Figure 5. Current Annual Increment (CAI) of volume for Gmelina arborea

Previous two studies (IFSC 1991, FAO 1982) gave indications that a maximum current annual increment of 20 m/ha/year for Gmelina is achieved between 5 to 8 years whilst the figure for Odoom (1998) was about 22 m³/ha/year which is comparable (see Figure 5). That given by FAO (1998) with regards to “good” site is similar (see Table 8). But the growth trend in the IFSC study had been constrained by a “generalized curve” to give a maximum MAI of 10 m³/ha/year between the ages of 15 to 20 years the maturity of which is unusual for a short-lived species like Gmelina.

Virtually all the Gmelina stands with yield classes of about 26 m³/ha/year and more are below 10 years old. The older stands are below yield class 26 with a majority below yield class 22. The younger stands had been established with seeds from the company’s seed orchards. This finding point to the fact that even with moderate seed and silvicultural improvements a significant increase in productivity of the stands is achievable.

Provisional calculation of growth rates from selected plantations in the country is shown in Appendix 3. FAO (1998) gives the MAI for the recommended species as in Table 8.

The MAI for teak in Table 8 was based on regression for calculating potential growth using only meteorological data (Pandey 1996). The results were adjusted using experiences from its application in Nigeria and Cote d’Ivoire.

According to Hardcastle (1998), moisture availability is a major determinant of tree growth in the tropics provided that the soil structure and fertility are reasonable. He expects a closer correlation between soil moisture and predicted yield than indicated by FAO (1998). Using the same climatic data, Hardcastle determines site suitability for teak based on the calculation of soil moisture stress. The results are as in Table 9. It shows the unsuitability of the Axim area for teak.

Table 8. Estimated Mean Annual Increment (MAI) for selected species

Table 9. Estimation of growth potential using soil moisture stress

4.2 Economic aspects

4.2.1 Markets and prices

Although the management of the forest has hitherto been undertaken by the Government, logging and timber processing is dominated by the private sector. Lumber and veneer are the main products. Kumasi is the centre of the logging and wood processing industry. Wood product exports are carried out mainly through the Takoradi Harbour.

The contribution of the wood industry to the economy of Ghana is very important. FAO (1997) records that forestry accounts for 9% of the nation’s trade and 11% of its GDP. Internal records show the wood processing industry as contributing 8.4% to the GDP and being responsible for 18% of total export income in 1994. In 1996 it contributed 7.5% to GDP.

Whereas teak is a timber which is well recognized for its desirable properties, the marketability of Cedrela has a relatively narrow range of uses. However, prices close to that of mahogany have been achieved locally for Cedrela recently. There is no market basis in Ghana for imputing a value to Gmelina logs. Gmelina from Ghana has been test marketed in shortwood lengths, to Zimbabwe. Gmelina is used successfully as a lightweight furniture timber in Malawi and Sierra Leone. The wood properties of Gmelina are considered more superior over those of Triplochiton scleroxylon. Despite its importance in log production terms, very little Ceiba has been exported.

There is a perception that domestic prices will rise, partly as a consequence of increased demand and also as a result of further processing of mill fall downs by the mills. The illegal logging trade coupled with illegal chainsaw operations are however helping to keep to keep prices artificially low.

The demand and marketing aspects of the main wood products are discussed below.

Logs

The local log prices are artificially depressed. This is due to the recent suspension of log exports in 1995 and the inability of the loggers and the millers to agree on equitable local prices for logs. Illegal trade in timber also contributes towards the distortion of the domestic wood market.

Most of the mills do not own forest concessions. It is estimated that millers hold about 35% of the land area under concession. Those millers that do hold concessions generally exploit them based on requests for particular species from the market (mainly the export market). The latter group prefers to buy logs delivered to the mill. In such cases, the loggers are usually assisted with logging equipment.

Lumber

It is estimated that the total lumber requirement for domestic consumption is about 456,000 m³/year (TEDB 1995). On the basis of a conversion rate of 40%, this amounts to 1.14 million m³ of round logs. There is no doubt that continued economic growth in Ghana will stimulate increased demand for wood products. There is also a thriving local timber market.

The volume of lumber retailed locally was about 385,000 m³ in 1995. “Chainsaw lumber” constituted 73% (i.e. 282,000 m³) of this volume while the remaining 27% was supplied by the sawmills and bushmills. There is thus a lumber supply gap of about 70,000 m³ or more. 85% of the lumber retailed in 1995 in the Ashanti Region was from “chainsaw lumber” even though the region has the highest number of sawmills and bushmills in the country (TEDB 1995).

The extensive reliance on the “chainsaw lumber” is due to the fact that they are more readily available and much cheaper than can be obtained from the local sawmills. The chainsaw operators have a lower production cost and usually evade the payment of taxes and forest fees. The foregoing has led to suggestions for the control of illegal chainsaw operations and government intervention to induce sawmills to supply the domestic market. The alternative would be to put illegal trade into effective check to cause an increase in the real domestic price so as to induce consumption of alternative materials and also increase the millers’ interest in the domestic market.

According to a TEDB market survey in 1995, there are differences in prices between sawmill lumber (usually the non-export quality ones) and chainsaw lumber in all the local retail outlets. Chainsaw lumber was on the average 30% cheaper than those from the sawmills. However in Accra, the sawmill price for Obeche was more than double (132%) the price of chainsaw lumber.

Poles

Thinnings from the FD teak plantations have been the main source raw material for the wood pole treatment industry in Ghana. The current demand, however, exceeds the supply and some of the pole treatment plants in the country have been importing softwood poles to supplement the local supplies. It is estimated that about 100,000 wood poles per year would be required for the national electrification programme for the next 30 years (pers. comm. at the ECG/VRA/Ministry of Mines and Energy). Assuming an average pole volume of 0.3 m³, this amounts to some 30,000 m³ per year.

The export of poles was, in principle, banned from November 1995. Owing to the current practice by the Forestry Department of selling poles from their plantations at subsidized prices, there is no reliable market price information for poles. Discussions with growers indicate that the current price of transmission poles (8 -10 m) is around 100,000 Cedis. The Dupaul Wood Treatment (DWT), Takoradi, was allowed to re-export poles originating from Benin and Cote d’Ivoire during 1996. These were the poles whose sizes were below that required for the national electrification programme. The re-export of poles whose sizes are in demand locally is not permitted (DWT management).

Fuelwood

In Ghana, it is estimated that about 80% of the population - mainly in the rural areas - depend on fuelwood for cooking. Its source is mainly from natural forests. A significant quantity is in the form of slabs from the sawmills. The fuelwood consumption is about 1.1 m³/year (roundwood equivalent) per capita and the estimate for 1997 is put at about 16.4 million m³ (AGI 1997). There is also a significant internal trade in forest products including substantial amounts of fuelwood and charcoal.

As the “slash and burn” agriculture recedes, the availability of fuelwood from the off-reserve areas will decrease. Hence it would be necessary to consider fuelwood plantations as part of the general national plantation programme.

4.2.2 Industrial capacity

Ghana's forest industries are categorized into three parts based on the type of operation. These are the primary (logging), secondary (sawmilling/plymilling/veneering) and tertiary (furniture, furniture parts, mouldings, floorings, toys, etc.). The state and structure of the industry is as follows :

Companies may be involved in one or more areas of activity. There are other several small wood industries serving mostly the local market.

The industry capacity estimates of the wood processing sectors in 1995 (TEDB) was:

Since 1995 the milling industry has continued to expand its capacity. The potential saw milling capacity was estimated to be in the order of 3.7 million m³/year (Smith 1997). This figure includes neither the requirement of the veneer and plywood industry nor the unquantified informal sector. Assuming that the consumption of the veneer and plymills remain the same as in 1995, the industry consumption can be put at about 4 million m³/year. The wood industry requirement therefore far exceeds the prescribed annual allowable cut of 1 million m³.

Most of the sawmills in Ghana are not equipped to process small diameter plantation logs. Even the large diameter logs are not being processed efficiently in most of the cases. There are some mobile sawsmills in the system. Sawmills like Prima Woods, Kumasi, have also modified saws for the breakdown of teak sawlogs. The industry in general, however, will require re-tooling and skill upgrading to be able to process the plantation logs.

4.2.3 Plantation area required

The gap in the supply and demand of can be bridged by a combination of the following measures:

• Efficient control of exploitation, utilization and protection of the remnant forest resources;
• Importation of logs from some of the neighbouring countries such as Gabon and Cameroon, and
• The establishment of plantations.

The estimated total local demand for wood products can be summarized below (Table 10). It has been assumed that all wood requirements would be met from future plantations whose average mean annual increment is about 10 m³/ha/year.

Table 10. Theoretical plantation area calculations

¹ Sawmill, bushmill, veneer and plymill. Exclude chainsaw ² Include chainsaw

³ 50% assumed from the forests ⁴ 25% of AAC of 1,000,000 m3/yr. ⁵ 75% of AAC of 1,000,000

Assuming that the existing natural forest resources and plantations can be effectively managed to supply the volume as in Table 10, about 415,500 ha of additional plantation area would be required to meet the estimated raw material requirement for the industry, local lumber as well as for poles.

It appears from the above table that the future fuelwood requirement is very important and needs to be tackled through all the necessary means. The exploitation of the natural forest for charcoal in particular is very intensive in the Transition and the Savanna vegetation zones. Hence the involvement of the producers in the regeneration of the forests involved is essential.

4.2.4 Economic and financial analysis

Both FAO (1998) and the NRMP preparation activities (World Bank 1998) have undertaken substantial economic and financial analysis on plantation formation in Ghana. FAO has undertaken extensive calculations on financial returns for a range of models.

The input requirements of machine time, wage labour and materials, and charge rates were derived from:

• Direct interviews with local tree farmers;
• Publications by the Forestry Department Planning Branch (FD 1993)
• Previous plantation project proposals (ODA/EC 1993)
• Data provided by the FORIG; and
• Estimates compiled under FAO project No. TCP/GHA/6714.

The result from the above was used to derive a harmonized cost structure for the silvicultural treatments. It was adjusted based on experiences elsewhere and applied to all species in all sites. Models were constructed for four indigenous and four exotic species. Each species model was applied to two sites. They are “Good” and “Poor” sites corresponding to the species optimum and minimum acceptable performances. Different cost models were applied to each species model for Large (>100 ha), Medium(10-40 ha) and Small (<10 ha) growers (Table 11). No overhead and land rental costs were included in the model.

Table 11. Estimated plantation establishment costs

The assumptions used in all the models include:

• Production objective: small diameter sawlogs, minimum small end diameter under bark of 30 cm;
• Site preparation involves degraded forest and secondary bush re-growth;
• 3 x 3 m spacing (1,111 trees/ha) with fertilization of 20 kg/ha for large and medium scale growers;
• Weeding: 3 times a year for a number of years; Taungya used by small scale growers;
• One pruning after thinning;
• 3 thinnings: timing and intensity based on the expected final d.b.h. and rotation age;
• Rotation age: Good Site (20 - 50 years), Poor Site (35 - 50 years);
• Target final crop diameter: Good Site (40 - 70 cm), Poor Site (35 - 50 cm); and
• Sawlog production assumed to be the principal product: Good Site (210 - 295 m³/ha), Poor Site (100 - 230 m³/ha). In the case of Teak supplementary products were considered in the order of increasing size and age of the crop (i.e. building poles, telephone poles and transmission poles).

Prices

The calculation of ex-forest prices for sawlogs was based on the average price for air-dried lumber. Data from the FPIB Export Permit Report (1997) was used. This was adjusted to obtain an average imputed log price. The latter was subsequently modified with the species price differentials. There is a clear distinction in prices between low density timbers (P. africanum, C. pentandra, T. Scleroxylon and T. Superba, in particular), which are priced 20-40% below the market average, and the medium density timbers (K. ivorensis, H. utilis and M. exelca), which are 10 - 40% above. A conservative estimate for Gmelina log price will be on par with the known low density timbers at 60% of market average. Cedrela, an exotic, fits well into the second category; and Teak ranks far higher (80% above average) in a category of its own (FAO 1998). The assumptions were:

• Mill recovery 35%
• Transport and processing 30%
• “Fire insurance” : fire tender species 10%

The sawlog and teak pole prices used in the model are shown in Table 12.

Table 12. Estimated end product prices

The comparative Benefit Cost Ratios (BCR) of the models using a test discount rate of 10% are shown in Table 13. Those conditions indicating acceptable economic outcome are shown as bold numbers.

Table 13. Summary of Benefit to Cost Ratio at 10% discount rate

Source: FAO (1998)

The above results indicate that the choice of site and possibly the use of improved genetic materials are very important. The most promising indigenous and exotic species are Ceiba/Wawa and Teak/Cedrela respectively. Teak comes out as the best due to the high value of sawlogs and the marketability of the intermediate produce.

As a comparison, Hardcastle (1998) states that there are extensive and successful plantation projects elsewhere in Africa and Latin America that produce satisfactory returns on investment with Pinus caribaea for instance with an MAI of 22 m³/ha/year and a net sawlog price of about US$44/m³. This is an indication that the rate of returns for pines could be better than the FAO calculations.

All species perform well on “Good Site” except Niangon which is a long rotation species. There is a niche market for Niangon. A special support may be required for Niangon and other similar niche species to encourage their planting. Only small scale Teak, Cedrela and Ceiba appear to yield satisfactory returns on “Poor Sites”. Generally, economic performances as shown in Table 6.8 tend to be the highest in all cases for the small-scale planters whose establishment costs are lower due to inter-cropping with annual crops to provide favourable cash-flows during the early years of the plantation.

Based on the cost estimates above, financial rates of return for Teak and Wawa for management models are as in Table 14.

Table 14. Estimated financial rates of returns

Source: FAO (1998)

FORIG has undertaken simple calculations for the establishment of a one hectare teak plantation. The calculation is based on data from a plantation which was established via Taungya in 1913 in the Pra Anum Forest Reserve as part of the institution’s research trials (Ohene-Coffie 1997). The extent of the plantation was not given. It is possible that it was less than 15 ha which was the maximum of the FORIG research plots (Foli and Ofosu-Asiedu 1997). The plantation could qualify for a small-scale or medium scale grower in accordance with the categorization by FAO above. The following silvicultural system was employed with no application of fertilizer:

• Manual site preparation;
• Planting distances: 3 x 3 m (1,100 stems/ha);
• Weeding at various intensities up to year 5;
• Pruning to 2 m height after canopy closure;
• One thinning at 10 years (intensity not indicated, but could be 100 stems/ha); and
• Final crop of 1,000 stems/ha at year 25.

The final stem size was not indicated. But at the stated stumpage of US$11 for the standing tree at year 25, it appears that transmission poles were produced. The MAI used or achieved was not given. The direct cost of establishment was US$478/ha. The latter compares with the FAO figure for small scale of US$450/ha. But the seedling cost (US$0.04/unit) and the price of the produce at rotation were not practical. The price may have been influenced by the effect of low pricing of poles on the local market by the Forestry Department. Although Taungya was used, there was no account for the intermediate yields except thinnings (this is also the case with the FAO calculations for the small scale grower). The conclusion was that teak plantation was only viable at discount rates of 20% or less. The BCR at the latter rate was calculated as 1.93. Due to the limitations in the calculations as indicated, the results may be considered as indicative.

Due to the paucity of objective and reliable cost data on forest plantation formation in Ghana, it may be deduced that the above FAO (1998) financial calculations may be the only comprehensive one that so far has been compiled. The main weaknesses of the data may be the the prices for the end products (i.e. sawlogs and poles) as well as the growth rates used. These were based on deductions from average prices and untested global regression for growth rates respectively for want of realistic data pertaining to the local conditions.

The main determinants of return are yield and price assumptions. It is therefore important that information deficiencies in these areas are improved to facilitate the calculations of real returns to encourage private participation in tree growing. The required data include real growth rates achievable by potential species on the various sites, the costs involved in plantation formation, and the calculation expected returns on investment.

4.3 Institutional aspects

4.3.1 Legal and policy issues

The chronology of Ghana’s forest laws is given in Appendix 5. The relevant ones pertaining to forest plantation formation is discussed below.

In 1994, a new Forest and Wildlife Policy was adopted with the aim of “conservation and sustainable development of forest and wildlife resources for maintenance of environmental quality and the perpetual flow of optimum benefits to all segments of the society”. The main objective of the policy is the involvement of all stakeholders for efficient management of the forest resources.

The response of the Forestry Department is the creation of the Collaborative Forest Management Unit (CFMU) within their Planning Branch to “explore and develop the potential for local people’s involvement in each and every aspect of integrated high forest management including timber production, environmental protection and bio-diversity conservation”. The strategies being developed include involvement of the locals in the planning and management of the forests as well as the provision of a fair share of the revenue from sustainable forest management to landowners and access to NTFP’s for domestic use on a sustainable basis.

The section 5.3.8 of the policy indicates the “promotion of resource development programmes aimed at reforesting suitable harvested sites, rehabilitating degraded mining areas, afforesting denuded lands, regenerating desired wildlife species and habitats and sustainably developing wildlife potential”. The “introduction of environmental impact assessment as a pre-requisite for resource development and utilization projects, in compliance with approved standards” is also stated in section 5.3.12.

Hitherto, landowners did not consider that forest reservation was a paying concern and hence did not invest resources in forest protection and management. The royalties from the exploitation of the forests were also poorly collected and even more poorly distributed. The communities and landowners in particular have been against the inequitable distribution of the revenues that accrue from the forests on their land (Table 15) as prescribed by the Constitution (section 267(6)). The result has been the mining of the forest resource as the responsible government agency (i.e. the FD) has not been adequately equipped and motivated to execute its mandate.

Table 15. Distribution of royalties with respect to exploitation from the natural forest

The royalty policy in Ghana has over the years been shaped by the timber lobby, which has managed to keep royalty levels particularly low, by skilful and expedient politicking. Forest policy change has ever hardly been the result of “rational” analysis. It is almost always the result of compromises and trade-offs among and between various and diverse interests and players (Nii Ashie Kotey et al. 1998).

The Forest Development Master Plan (FDMP 1996 - 2020) has been prepared by the Ministry of Lands and Forestry as a master plan for ensuring sustainable harvesting of timber and also to increase the awareness and encourage the involvement of individuals and communities in the protection and management of forest resources. The objectives of the plan include the mobilization of a wide range of Ghanaians, mainly from the private sector, to undertake tree growing ventures within each district of the country. Accordingly, a series of incentive packages will be designed to ensure widespread appeal and positive response across the nation.

The FDMP forms the basis for the implementation of the Forest and Wildlife Policy (1994). It is composed of three phases. The scope of Phase I (1996 - 2000) includes:

• Consolidation of forest management systems to ensure that timber can be certified as “sourced from sustainably managed forests” by the year 2000 (Ghana is committed to ITTO Year 2000 Objective);
• Development and launching of flexible schemes for investment in commercial forest plantations, tree farming and propagation of non-timber products and wildlife; and
• Creation of an enabling climate for rationalization of the timber industry and consolidation of fiscal measures for efficient utilization and increased value added processing.

Under the plan, the expected outputs include the increase of the forest and tree cover of Ghana by 10%. A nation-wide planting target of 200,000 ha has consequently been proposed for establishment by annual plantings of 7,000 to 10,000 ha over the next 20 years on unproductive forest lands. The focus will be the enrichment and restocking of degraded forest areas and concessions, establishment of plantations on suitable conversion areas and support to community forestry and agro-forestry needs. In this respect, the forest industry would also be encouraged to modernize and also to re-tool to be able to process small logs and plantation products in the future.

The Timber Resources Management Act, 1998 (Act 547) also prescribes the identification and management of forest concessions - both within and outside the forest reserves - by the Chief Conservator of Forests (CCF) with the involvement of the stakeholders (i.e. landowners, local communities, District Assemblies and farmers).

Act 547 does not allow private holding of Timber Utilization Contracts (TUCs) even though in principle there is an option for the owner or owners of forest(s) to manage them under the direction of the Forestry Department in accordance with section 18(2) of the Forest Ordinance. For example, the section 4(2) of Act 547 states that “No timber rights shall be granted in respect of land with forest plantations...... without the authorisation in writing of the individual, group or owner concerned”. In other words, one may permit some other person to operate ones plantation as a TUC. But it is not clear whether a plantation owner can manage his/her stand unilaterally without control.

The Act does not also explicitly exempt planted timber from the requirement of a TUC for timber harvesting. Act 547 prescribes the establishment of forest plantations by concessionaires on a basis of 10 ha/km² of the TUC area in question (MLF). The modalities for the implementation of the latter are yet to be clearly defined in the related Timber Regulation - LI 1649 which is expected to receive cabinet approval in the near future. Under the LI 1649, forest exploitation both on-reserve and off-reserve is being brought under control. New stumpage rates have also been introduced

The Natural Resources Management Programme (NRMP) has been developed as a country-led initiative to implement the FDMP. Under the High Forest Resource management sub-component of the NRMP, the Government plans to establish a Forest Plantations Development Centre (FPDC) to promote and encourage private forest plantation development. The project is meant to support all those who are planting or wish to plant timber trees commercially within the HFZ.

Institutions and facilities necessary to encourage private investment in plantation forestry would be developed. A Forest Plantations Development Fund (FPDF), for instance, would be set up using as its core asset the proceeds of the export levy on air-dried lumber of some nine endangered timber species. A practical and feasible incentive scheme for investors in plantation forestry is yet to be worked out.

The sub-component is composed of three elements as follows:

• Project Management (funded by the IDA);
• Credit to Tree Growers (to be funded by the African Development Bank), and
• Technical Assistance (to be funded by the EU).

Under the erstwhile Trees and Timber Decree, 1974 (NRCD 273), anyone who fells a growing tree either on or off the reserved forests for export in log form or for conversion in a mill to obtain the permission of the Chief Conservator of Forests. The implication is that one could in principle fell trees on his farm and say set fire to it legally as no trading is involved.

The Administration of Stool lands Act, 1962 (Act 123) states that timber rights may not exceed 30 years in duration and about 100 km² in size (Sect. 12). The Schedule 1 of the Timber Resources Management Regulations, 1998 (LI 1649) stipulates that TUC areas are not to exceed 125 km² for both reserve and off reserve areas. It would be a disincentive if the lease periods for land for forest plantations are made to conform to the prescriptions of Act 123.

Large-scale forestry plantations can have considerable environment impacts and an Environmental Impact Assessment (EIA) is mandatory for these projects according to Ghana’s environmental regulations (e.g. section 5.3.12 of the Forest and Wildlife policy, 1994). The Ghana Environmental Protection Agency (EPA) guidelines request an EIA for all plantations exceeding 40 hectares. Transformation of primary or secondary forest into forestry plantations would put a project in Environmental Assessment Category I and would require a full EIA.

The Income Tax Decree, 1975 (SMCD) as amended establishes a 35% corporate tax on limited liability companies. This is reduced to 8% for companies that process and export timber. Section 3 of the Decree envisages a tax exemption for income derived from tree crops such as coffee, oil palm, shea butter, rubber, coconut during the 10 years following the date of the “first harvest”. This could be made applicable to forest plantations if a proper definition can be given to the “first harvest’ in the context of forestry. This first harvest could possibly be the first commercial thinning.

The Ghana Investment Promotion Centre (GIPC) Act, 1994 (Act 478), establishes the centre as a body corporate with a number of functions relating to the promotion of investments. Registration with the GIPC is required for 100% foreign owned and Joint Venture Partnerships with Ghanaians. It does not apply to wholly Ghanaian businesses. A 100% foreign owned company requires a minimum equity of US$50,000 either in cash through the banks or as capital goods. In the case of a joint venture partnership, US$10,000 minimum equity in cash or capital goods is required. If capital goods are used, they must be registered on Form 6 at the Register General’s office in Accra as equity.

After the necessary formalities relating to the registration or incorporation under the applicable Ghanaian laws have been completed, a GIPC certificate of registration is issued within 5 days and the foreign partner(s) issued with Resident Permit(s).

4.3.2 Restructuring of the Forestry Department and the District Assemblies

The FD will also be transformed into an affective, responsive, decentralised and semi-autonomous Forest Service. This is to facilitate a much more effective management, utilisation and felling controls for the forest reserve and off-forest reserve areas in conformity with sustainable forest development principles. The involvement of the proposed Forest Service in plantation development would be limited to the management of the existing ones and the provision of extension and training services on contract to prospective clients (MLF 1998).

As part of the Government’s Decentralisation Programme, District Assemblies (DAs) have been established in 110 Districts in the country in accordance with the Local Government Act, 1993 (Act 462). Section 10 (5) of the Act makes the DAs responsible for the co-ordination, integration and the harmonization of the execution of the Government, public and NGO programmes in the respective districts. Section 38 of the Act further establishes a Natural Resources Conservation Department (NRCD) with a Forestry and Game and Wildlife Division. The Forestry Department does not have the capacity to support all 110 DAs. Hence support will be required for capacity building in some of the districts with respect to the management of forests and Wildlife.

Conclusions

The ownership of planted trees is not clearly defined. No particular exemption is made for planted timber from legal requirements applicable to natural timber.

TUC holders are expected to plant. The location of the areas to be planted is currently uncertain and the modalities for the implementation of the concept have not been spelt out explicitly. It would be more appropriate for qualified plantation experts to be contracted out to do the planting on behalf of the TUC holders to ensure the success of the programme. Lessons from other areas where such a scheme has been tried (e.g. Nigeria) indicate that the concessionaires cannot be relied upon to execute such an assignment and the control of the operations involved also tends to be cumbersome (Hardcastle et al. 1998).

For the immediate future, the process through which stakeholder participation is fostered will require more policy attention. The relevant laws that have been promulgated are relatively new but are in the right direction. They would, however, require intensive investment of resources in education and awareness creation so as to change attitudes positively towards tree planting.

It would also be essential that it is made explicit that any plantation in one block does not exceed the above area limitation. It is possible that an owner of plantations could acquire scattered pieces of land whose cumulative area may exceed the limit given in LI 1649 and this may become a potential disincentive for potential investors in large scale plantations.

The requirement for individual EIAs for each and every plantation development will be a disincentive. In this respect, it would be necessary for the EPA and the MLF to formulate environmental guidelines - instead of the EIA - for application to forest plantations.

The investment and the tax laws could have been used to control the expansion in the wood industry which has resulted in the over-capacity in the sector to favour the efficient ones. The incentives offered to the other tree crops could also be applied together with other necessary incentives to encourage investment in forest plantations.

4.4 Land and tree tenure

In discussing the above, the main objective is to evaluate the conditions that may encourage the rural farmers or communities to contribute towards increased supply of hardwood to the industry in the future. This can be achieved through the tending and protection of natural regeneration as well as the planting of trees on or near farms in conformity with the Forestry and Wildlife policy (1994) and the Forest Development master Plan (1996).

4.4.1 Land tenure

In general, there are five main categories of land in Ghana.

State land

This is land that has been compulsorily acquired by the Government in the public interest or for public purpose under section 1 of the State Lands Act, 1962, (Act 125) as amended by State Lands (Amendment) Decree, 1968 (NLCD 234). Revenue accruing from these lands is paid into the Consolidated Fund.

Vested land

This is stool land that has been vested in the state as trustee for the appropriate stool under section 7 of the Administration of Lands Act, 1962 (Act 123). Revenues from these lands are paid into the Stool Lands Account for the appropriate stool.

Stool land

This is land that is vested in the appropriate stool on behalf of the community or “oman” represented by a Chief. The land, however, is vested in the relevant Communal Chief, District Chiefs, Sub-Chiefs, or the head of the clan/tribe or family concerned in a fiduciary capacity for his people. A prospective investor may therefore be confronted with a multiplicity of interests or rights.

Members of a landholding group have usufruct rights which is equivalent to freehold. They may permanently appropriate a portion of the land by “permanent” developments like cocoa, palm or coffee farms or a house. Such land for most practical purposes belongs to the member and his interests are secure, inheritable and generally alienable.

Any disposition of such land by the stool or head or family requires the consent of the of the holder of this interest. Article 267(3) of the Constitution however requires certification by the Regional Lands Commission that any disposition or development of stool lands is consistent the development plan drawn up or approved by the planning authority for the area concerned. The same authorities must also consult with the traditional authorities in all matters relating to the administration and development of stool land (Article 267 (7)). Even though the land is vested in the stool, collection of revenue and its disbursement are the responsibility of the Administrator of stool lands.

Family land

This is land that is vested in a family represented by a Head of family. The Administrator of stool lands has no mandate to manage revenues accruing from these lands.

Privately owned land

This is land, the freehold interest of which has been purchased outright by an individual or a group of persons. In a majority of cases, this type of land ultimately turns out to be family land upon the death intestate of the individual owner.

4.4.2 Tree tenure

Traditionally land is deemed to include things on and under the soil. It does not necessarily include things attached to it such as houses and trees. Examples are the right to hunt, collect snails, harvest and collect fruit and herbs. The right to economic trees is vested in the owner of the paramount interest to the land on which they grow even when the land has been given out or sold. But individual farmers with freehold rights may be allowed to maintain and harvest trees (both natural and planted). Individuals cannot harvest economic trees on unallocated communal land even if they have been planted by them.

In general, the situation with respect to a tenant farmer is different as compared to the subjects of the area. The tenant farmer who has acquired land for agricultural purposes however will be expected by his landlord to re-negotiate if he wants to change his land use.

In most cases, trees are viewed as permanent features of the land-use system. Some landowners therefore tend to view the growing of trees by tenant farmers as being tantamount to perpetuating their stay on the land which in turn may also indirectly imply ownership of the land. Tenant farmers therefore do not own the trees found or even planted on their land except in the Upper West Region where planted economic trees may belong to the planter whether landlord or tenant. Tenant farmers may however be allowed to harvest trees for their own use, but not for commercial purposes.

4.4.3 Land and tree tenure in forest reserves

The Concessions Act, 1962 (Act 124) provides that all timber resources, together with all land declared to be forest reserves or subject to timber concessions (both within and outside the reserved forests) are vested in the state in trust for the communities concerned (Section 16). These resources are administered by the central government through its various agencies principally the MLF and the FD. In theory therefore, the landholding stools own the forest land and the timber trees thereon. In practice, however, the land and trees are managed by the central government with little or no input by stools, village communities and local authorities. The Government of Ghana therefore has all rights that relate to determining what, where and when access is given to the forest resources in forest reserves and areas outside forest reserves which fall within timber concessions.

The Forest Ordinance (Cap. 157) Section 18(1) indicates that the ownership of land is not altered by its declaration as a forest reserve. Forest reserves may be managed by the owner or owners under the direction of the Forestry Department, or by the Government at the option of the President (Section 18(2)).

Plantations in forest reserves

Prospective investors who wish to use degraded lands in forest reserves would have to deal with the FD and the landowners concerned. In forest reserves, the land and forest resources are vested in the Government to be managed in trust for the land-owning stools. The landowners however retain significant rights through vestiture. They are:

• The right to consultation;
• The right to access to reserves to meet specific basic needs known as customary rights; and
• The right to a share of the benefits from exploitation and development of the forest resource (i.e. royalties etc.).

These rights would have to be taken into consideration in developing industrial plantations in the degraded forest reserves. They may be retained where practicable or re-negotiated with the landowners. In traditional land agreements, when the tenant changes the land use, which was agreed upon during the land acquisition, the landowner’s consent must be sought.

Conclusions

The key issue in land acquisition is the consent of the landowner regarding the proposed or change of land use for the area of interest.

The FD is the manager of the forest resources within forest concessions without owning the land. The various new natural resource laws all encourage landowners and other stakeholders to be involved in decision making with respect to natural resources management. Any change of the contractual agreement with regards to the management of the forests in the reserved forests by the introduction of third parties without the consent of the landowners in question can therefore lead to tenurial and management conflicts. In the same vein, should the location of the plantings, which are legally required to be undertaken by the TUC holders, fall within the forest reserves similar conflicts could apply.

FD can either be as partners or facilitators of negotiations between investors and landowners. The latter is better, more equitable and secure for all parties involved. Consultations with the Administrator of Stool lands would also be essential.

4.4.4 Effect of natural forest exploitation on farmers

There is generally high incidence of farming in the OFR concession areas. This will undoubtedly increase with the growth of the population. In these areas, farmers repeatedly complain about the destruction of their crops during logging operations on their farms.

Discussions with some Chiefs and some of their subjects during this and other studies conducted by the Consultant indicated that the technique of skidding trees felled on farmlands is deemed as the most destructive. They consider the effect of a felled tree, if properly, directed as tolerable. In this regard, their suggestion is that the processing of the felled tree in situ would be preferred. They consider a share of about 30% of the lumber produced (interestingly, not money) as an adequate incentive to maintain trees on the farm. This issue requires to be investigated further to determine how farmers could be encouraged to keep and tend trees on or near their farms.

The farmers are generally not adequately compensated for the damages caused by timber exploitation. In these circumstances, they would prefer to either destroy the trees or connive with the chainsaw operators to process them on the farm if they are assured of a much more equitable share of the proceeds that will ensue from the operation. The Forestry Department Interim Procedures (1995) as well as the Timber Resources Management Act, 1998 (Act 547), however require that a farmer agree to the felling of any tree on his farm.

4.5 Land titling

A potential investor would have to deal with the following that may be considered as some of the disincentives with respect to the establishment of forest plantations:

• Multiplicity of interests and rights in land which may vary in different parts of the country leading to conflicting claims to ownership;
• Lack of reliable maps indicating stool/skin land boundaries which can gives rise to disputes;
• Cumbersome land disposal and documentation procedures;
• Potential conflict concerning tenurial and management arrangements for plantations within forest reserves; and
• Inconsistencies in the extent of land over which timber rights can be granted.

Despite the above, the Ghanaian statutory and customary laws do not legally prevent one to secure long-term access to land. Provided suitable land can be identified without conflicting claims, there appear to be no inherent legal limitations to the negotiation of rights of sufficient duration for plantation purposes if the landowner agrees to the purported land use.

A “Land Bank” has been recommended under the proposed plantation project which is to be implemented under the NRMP. This bank is meant to assist the confirmation of the legal status of a particular land by potential investors. It will also help to bring together interested investors and genuine land owners. The Lands Commission is also undertaking national mapping of stool/skin boundaries using a GIS. The mapping is being carried out under the Ghana Environmental Resources Management Project (GERMP) and is expected to be completed by the end of 1998. It will greatly facilitate the isolation of dispute areas to be avoided.