Sep 11, 2012
The Integrated Tamale Fruit Company (operating in the Savelugu-Nanton District in Ghana’s Northern Region, an area of widespread poverty) cultivates certified organic mangos for local and export markets. To boost its power in the export market with higher production volumes, the company established a scalable business model that includes local farmers. Instead of acquiring a very large piece of land—physically and financially impractical—the company produces high volumes through an outgrower scheme, which started in 2001 and today includes 1,300 outgrower farmers. Each has a farm of about an acre, with 100 mango trees that supplement the nucleus farm of 160 acres. The company provides an interest-free loan to the outgrowers through farm inputs and technical services, and farmers start paying for the loan from selling mangos only after the trees yield fruit. This arrangement allows the company to reliably source a large volume of quality organic mangoes, and the farmers can enter mango production with long-term income prospects. The nucleus farm’s profits are on track to reach $1 million a year by 2010. The case examines the key challenges of the outgrower scheme and its implications for the company’s business.