The Case of Tomato in Ghana: Processing
The Ghana Strategy Support Program has released a new working paper that examines why tomato processing in Ghana has not worked.
Processing of highly perishable non-storable crops, such as tomato, is typically promoted for two reasons: as a way of absorbing excess supply, particularly during gluts that result from predominantly rainfed cultivation; and to enhance the value chain through a value-added process. For Ghana, improving domestic tomato processing would also reduce the country’s dependence on imported tomato paste and so improve foreign exchange reserves, as well as provide employment opportunities and development opportunities in what are poor rural areas of the country.
“Processing to buy up the glut” is neither an appropriate motivation nor a long-term viable strategy for Ghana’s tomato processing industry. Adding large-scale processing increases demand for tomato and so puts upward pressure on the price of fresh tomatoes. But processing also converts tomato—a non-tradable good at the regional level—into paste, an internationally traded commodity and so exposes the tomato sector to international competition. At current market prices for tomato, domestically produced paste typically will not be competitive with imported paste from the EU and China.
The working paper is available here as a PDF.