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20.03.2006 Business & Finance

Ghana -2nd Largest Importer of tin tomato

By Public Agenda
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…As local farmers cry for assistance

Professor Ernest Aryeetey, Director of University of the Institute of Statistical, Social and Economic Research (ISSER) last Wednesday revealed that Ghana is the second largest importer of tomato paste in the world. According to the renowned economist, Ghana is second only to Germany in the world, consuming an average of twenty 25,000 tonnes of tomato paste in a year at a total cost of about $25 million dollars.

Prof. Ernest Aryeetey made the disclosure when he delivered a paper titled, “Globalization, Employment and Poverty in Ghana,” at the first of this year's ISSER-Merchant Bank Development Seminar Series at the British Council. His revelation came as a shock to many of his audience. This is because though Ghanaians have long been aware that many of the products they consume everyday are imported, they never thought they would place second in the world as a tomato paste importing country.

This paper gathered from the ministry of trade that for the year 2000, Ghana imported about 10 million kilograms of tomato paste at about $8.9 million. This rose to about 12 million kilograms at $9.6 million in 2001. The year 2002 saw the importation of 16.4 million kilograms at a total cost of $12.7 million. The European Union is reported to have exported 27, 000 tonnes of preserved tomatoes to Ghana in 2003. Though years 2004, 05 and 06 figures were not available, the trend suggests that in each year, Ghana's import volume of tomato paste jumps by about 23%. This is not surprising judging that tomato is used in almost every meal in the country.

But it is not only tomato that Ghana leads as a net importer. Ghana is also a net importer of both rice and poultry products despite the fact Ghanaian farmers are more than capable of supplying enough of these.

However as tomato imports continue to rise in volumes, about 1250 Ghanaian tomato farmers stand the risk of being pushed out of employment. According to the national president of the Peasant Farmers Association of Ghana (PFAG), Mr. Mohammed Nasiru Adams, over 700 tomato farmers have already been rendered unemployed as a result of the imports.

These farmers are mainly from Navrongo and Bolgatanga in the Upper East Region, Buntanga, Gulinga and Libga in the Northern region, Tuobodom in the Brong Ahafo region and Asante Akim in the Ashanti region. Tomato farming, processing and distribution could become the biggest employment avenue for many rural dwellers, but thanks to unbridled trade liberalization, foreign tomato has taken over the market. Research shows that about 60 percent of the content of imported tomato is artificial additives, the reason why it is cheaper that local tomato.

Poverty among food crop farmers is already rife. The Ghana Living Standard Survey, round 4 (GLSS4) noted that about 40% of Ghanaians live the below the poverty line of less than one dollar a day and that 70% of this number are food crop farmers. The GLSS4 document also observes that the Upper East Region, where majority of these tomato farmers operate, has the highest incidence of poverty, followed closely by the Upper West, Northern and Central Regions. The Ghana Poverty Reduction Strategy document (GPRS I), the government's medium term blueprint also reechoes the findings of the GLSS4 and promises to direct national resources towards reducing the incidence of poverty. The thrust of GPRS I document as a poverty-reducing tool is to modernize agriculture with particular focus on food crops, livestock and non-traditional exports. Mr. Adams points fingers at the country's trade policies, which has over the years opened the floodgates for foreign goods as the main cause of poverty. He notes that if the trend is not halted many Ghanaian families, particularly those of tomato farmers, will continue be impoverished.

Adams questions why the country continues to spend such huge sums of hard money on imports when Ghanaian farmers, with support can produce enough tomato to feed the nation and for exports. But Prof. Aryeetey explains why. “These imports are cheaper than the local products. The Italians, through research and with support from their government are able to produce at a cheaper cost and are thus more competitive.” He agrees though that the imported paste are inferior in quality than the local ones and suggests that “if we want to stop the importation, we will have to invest in processing plants, in irrigation and in storage facilities.”

However, Ghana's religious adherence to the rules of the International monetary Fund (IMF), the World Bank and the World trade Organization (WTO) will not allow her to make the investments that Prof. Aryeetey talks of. Under the IMF, the World Bank and the WTO, Ghana is barred from providing support in the form of subsidy, guarantee market or export subsidy to her farmers. More so, she cannot protect Ghanaian farmers from the onslaught of cheap imports by way of tariff and quotas imposition.

Rather, Ghana will have to further open her borders to foreign goods in exchange for market access in northern countries.