The Ghana Strategy Support Program has released a new working paper that explores tomato marketing in Ghana. This document focuses on the linkages between farmers, traders, and retailers.
In Ghana, the agricultural sector in general and the tomato sector in particular have not met their potential. In the tomato sector, production seasonality, the dominance of rainfed agriculture, high perishability of the fruits combined with no storage facilities, and poor market access, have resulted in low average yields but seasonal gluts with some farmers unable to sell their tomatoes which are consequently left to rot in their fields.
The tomato value chain in Ghana is characterised by a “two level” system in which itinerant traders—the market queens —are the direct link between rural farm producers and urban consumption, rather than by a set of assembly markets which bulk the produce before being sold to urban wholesalers at relay markets. Assembly markets enable inspection, grading, and better price transmission, but the time taken to get the crop from farmgate to consumer is relatively long. The two-level trader system reduces delays of passing through assembly markets, allowing rapid movement of the produce from producer to consumer, important for highly perishable agricultural products such as tomato, but fragments price signals resulting in poor spatial price adjustments (Bell et al.1999; Orchard and Suglo 1999). In a two level system, farmers are distanced from market signals: most wait for the market queens to come to their fields and if these traders do not come, farmers leave the tomatoes to rot in the field in the absence of a local market. Traders allocate a certain number of crates, which determines how much farmers can sell on that particular day and there is little if any room for price-quantity or price-quality negotiations. Signals from consumers with respect to quality, price, and quantities demanded, are not transmitted back along the value chain to the farmers. Though packers may remove the poorest quality fruits, tomatoes of different qualities and even different varieties are not graded but rather simply piled them into over-sized crates.
A key feature of the tomato sector in Ghana is the organisation and strength of the market queens, who effectively control distribution networks and the number of trucks of tomatoes that can enter the larger wholesale markets on any particular day. In the press and the grey literature, these market queens are variously portrayed as the only group in the tomato value chain which is disciplined and organised, reducing risk, uncertainty, and spoilage of what is a highly perishable fruit; or as a cartel to the detriment of both consumers who pay inflated prices and producers who receive lower prices or get no market at all. In reality, the impact of Ghana’s tomato traders on the sector is not sufficiently understood. But certainly, the two level marketing system has enabled market power to evolve and concentrate over time with the traders.
The working paper is available here as a PDF.