In the last section, we presented the context of tomato production and trade in Ghana. In this section, we describe the structure of Ghana’s tomato markets, examining specifically the category of market participants, marketing and pricing patterns in the five markets under study.
Unlike grain markets in SSA in which numerous petty traders of all calibre are involved from commodity assembling at the farm gate to retailing, relatively few traders with clearly defined activities participate in the tomato marketing system in Ghana. In addition, arbitraging activities in grain trade usually occur on market days (three or seven day’s week) in market locations. Tomato is however marketed mostly at farm gates in producing areas, and transaction activities in both producer and consumer markets occur on market and non-market days alike since the commodity is perishable.
Selling tomato at farm gates eliminates the additional transportation costs, drudgery and risks that producers may incur in moving tomato from the farm gates to the local markets.
Wholesalers on the other hand get higher quantity per crate at the farm gates than in the local markets and may avoid the payment of market tax by buying from farm gates. For both producers and wholesalers, conducting transactions at the farm gates is a faster way of reducing spoilage of tomato and marketing risks, and ensuring good prices. We discovered during the market surveys that the more farmers or traders delay in selling their tomato, the higher the likelihood for them to receive lower prices later or even incur total losses through spoilage.
The main functionaries in Ghana’s fresh tomato markets include: itinerant wholesalers, retailers, transporters, and assemblers or commodity brokers, who operate during low supply periods.
i. Wholesalers: Tomato wholesalers in Ghana are mostly female, itinerant traders called market women or market queens (in the local parlance). These travel from large consuming centres to buy the produce at roadside near the farms, or at local and
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village tomato markets at the producing areas. Wholesalers are therefore responsible for long-distance, inter-market arbitrage of tomato from low-price, net producer markets to high-price and urban, net consuming markets. Their role of providing transportation, and taking marketing risks in shipping the commodity in hired or owned trucks from the farm gate to consumer markets is therefore crucial. This is especially so because of the bulky and perishable nature of tomato. Wholesalers constitute about 10% of the number of market participants in Ghana’s tomato markets.
ii. Retailers: Retailers constitute a large percentage, over 80% of the number of tomato traders in Ghana. Tomato market retailers operate both in the net producer and net consumer markets. In the net consumer markets, they buy tomato from wholesalers and sell it to consumers or restaurant operators. The retailers in the producer markets buy directly from producers for further distribution to consumers and food restaurant operators in the producer markets. In the lean supply season, producer market retailers may act as assemblers who buy small quantities of tomato from farmers, bulk and sell it to the itinerant wholesalers.
Compared to wholesalers, retailers’ marketing activities entail fewer risks. They may also benefit from purchasing the commodity on credit from wholesalers.
iii. Transporters: Transporters in tomato markets include truck owners, drivers and porters who ship the commodity between spatial markets for a fee from wholesalers. Transportation charges for conveying a crate of tomato from net producer to net consumer markets is the major component of transaction costs and vary with fuel prices as well as the distance between the producer and consumer markets. Over the period of the market survey, inter-market transfer costs (TC) between Navrongo as a producer market, and Tamale, Kumasi and Accra as consumer markets increased by about 32.25%; while the TC between the producer market Techiman and the consumer markets rose by 63%. This may be because Techiman’s tomato is harvested in a rainy season when the quality of roads to the farm gates is poor.
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iv. Assemblers/Commissioned Agents: Another category of market functionaries, commission agents or commodity brokers who form a small proportion of the traders in the marketing system exists during surplus or scarce supply seasons to link up producers to wholesalers or vice versa.
Transactions activities in producer tomato markets start around dawn and end in the late afternoon, and involve on-the-spot negotiation for the price per crate of about 52kg.
Following the purchase, the commodity is packed into trucks and transported immediately to the urban consuming areas. Express transportation reduces risks of spoilage, which may be high because tomato is very perishable under the hot tropical weather conditions, transportation bottlenecks and the sometimes long distances between producer and consumer markets. To ensure a quick shipment to the consuming centres, the wholesalers may pay high transport charges to transporters.
In the producing areas, the market entry barriers created by wholesalers associations imply fewer buyers, low competition and market power by wholesalers, and hence lower farm gate prices. Tomato farmers’ associations also exist and attempt to bargain for fair prices with the wholesalers, but producers lack as much bargaining power as traders, especially in times of gluts of the commodity. In some cases, tomato producers may enter into long-term market relationships viz. supply contracts, preferred supplier agreements and cronyism with wholesalers to ensure good prices for their produce.
Farmers reported that wholesalers not only offer them low prices per crate, but also use bigger crates to buy tomatoes at peak harvests seasons. During this period, prices can be so low that the cost of paying labour to harvest the crop may not even be recovered. Price variability can also be very drastic. For instance, the price per crate could be as low as GH¢2.00 Cedi at peak harvest but rise as high as GH¢30.00 during lean periods. Our market surveys observed wholesale prices at Navrongo as a producer market to be as low as GH¢10.00 during a glut in March 2007, but is GH¢90.00, an increase of 80%, just two months later (May 2007) due to scarcity. Also note that the price volatility in Kumasi and Accra, are the highest (Table 4.2).
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Apart from the seasonal nature of these price variations, we suspect that collusive behaviour between traders as well as temporary shocks to transfer costs may also contribute to high price spreads between producing and consuming areas in Ghana. In fact we found price variations to be related with temporary commodity gluts and scarcities. This however does not represent overproduction or production deficits, but is suspected to arise largely from autarky between net producer and some consumer markets poorly linked by road.
Table 4.2: Market Descriptive Statistics4
Market Min. Wholesale
Price (GH¢)
Mean Wholesale Price (GH¢)
Max. Wholesale Price (GH¢)
Standard Dev.
Navrongo 10.00 33.00 90.00 15.80
Tamale 12.00 32.80 90.00 15.30
Techiman 6.00 31.50 70.00 16.20
Kumasi 8.00 41.70 96.00 29.60
Accra 10.00 53.40 95.00 22.00
Source: Own
The high risks involved in transporting a perishable commodity like tomato from farm gates in surplus producer markets, over poor quality roads, to deficit markets deters the arbitraging activities of tomato traders. Perhaps creating strong linkages between rural farmers and urban markets will help farmers get competitive markets and reasonable prices for their produce. Improvement in storage, processing and market facilities are also crucial in this case, as is support from empirical market research findings in the present trade liberalization scenario.
4 The data from which these statistics are computed is collected through self-conducted , semi-weekly market surveys from March, 2007 to April, 2009 in the five markets.
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