The marketing structure and power dynamics

Although farmers can make fair profits from local sales, the market is unable to absorb the products during the peak periods hence the need for the Southern traders. As described in Chapter 2, some of the Southern traders migrate to live in the district during the season in an urban-to-rural migration, in contrast to observations in numerous research works by Williamson, (1988): Banerjee, B. (1981) Bhattacharya, B. (1993) of the high incidence of rural-to-urban migration. The purpose of the traders’ migration is, however, different from that of the farmers, as explained previously. Migration by the traders is also well documented by Effendi (2005); Kato, (1982) and Naim, (1973) among the Minangkabau, as facilitating trade and influencing important aspects of the social

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structure. During the tomato marketing period, communication and information sharing is very important for the majority of those who travel within and beyond the borders of the country. The key role communication plays in trade cannot be overemphasised.

Information on prices at the farm gate and Southern markets are communicated between translators and traders at both ends of the country, using mobile phones. They inform their callers of the market situation at the farm gate, whether the products are in abundance or are scarce and where they can conveniently buy enough quality goods. So, when the traders arrive, they are well informed about the situation. As information asymmetry is historically very common in rural areas, mobile phones have become very important tools for sharing knowledge on market prices. According to Bayes, (2009) mobile phones have been very useful to banana and grain farmers in Uganda and Niger respectively, by helping to reduce marketing costs and raise incomes. In a similar report the “e Soko” project undertaken by the Rwandan government is aimed at giving farmers access to market information. With the cooperation of the service provider MTN, the government is selling 3,500 mobile phones to farmers at subsidised rates for both the purchase price and cost of calls¹⁷. Cross-checking of information is very important to avoid unnecessary losses. It also enables the farmers to make informed decisions when deciding on the best tactics to adopt. However the potential use of such information is limited for the tomato farmers in Ghana. Although they communicate on mobile phones with their relatives in Accra or Kumasi for market prices, they are rarely able to use the information to their advantage because of the powerful position of the traders.

The traders from the South enjoy a relatively high amount of power during marketing in contrast to their counterparts in the UER. This is exercised in a practical way as they control market supply by physically limiting the direct market access of other competitors e.g. the farmers who normally sell at low prices in the market and are perceived as a threat to their business. In an attempt to maximise profits, the traders control the movements of the trucks from the farm gates to the market. Supply control is a customary practice in marketing chains the world over. In European countries it is termed “effective consumer response” which is monitored using modern technologies such as the Internet

17 http://allafrica.com/stories/201002040063.html accessed 2/03/2010

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(Peppelenbos, 2005: 14). The processes in Ghana may lack such advanced technologies but the principle remains the same as supply and demand needs to be coordinated to ensure business survival and profitability (Ibid). If traders see that the prices of tomatoes are getting high at the farm gates, they simply reduce the number of trucks that move to the farms that day. For example, a normal, daily number of thirty or forty trucks might be reduced to ten or fifteen. This strategy creates an unexpected glut at the farm gates thus putting farmers in the desperate situation of having to sell at prices the traders are willing to pay. Similarly, the contrived scarcity at the marketplaces enables them to make high profits. In a recent report, one of the local radio stations described them as:

“Troublesome and garrulous tomato traders who throng Navrongo central like bees around this time of the year, outsmarting each other in the move to rush early to Accra to make a good market while farmers, who sell off their cows after years of saving and investment in order to raise money to farm the vegetable, find it difficult getting a decent return for their money”¹⁸

Manipulative strategies are widespread methods that traders employ to protect their business and sustain profits. Extensive work on market restrictions has been carried out in most African markets by IFAD, Luttrell, Lyon and Porter discussed in Chapter 2. One such strategy is to get members, trading in a particular commodity in a geographical area, to register with their respective associations. The regulation restricting market access is well respected and understood among the traders. A bulk buyer or retailer is aware that she cannot sell her goods in a different market unless she sells to an agent who is recognised in the association of that market. This is the reason why ‘tomato woman’

cannot sell directly in Accra but have to send the goods to a bulk buyer. This approach prevents farmers from bringing their produce directly to sell in the marketplace. Attempts by NGOs and Government to help farmers have direct access to the market, have been met with resistance by the association. In one instance, an NGO that was focused on

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15/04/09)

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small scale support in Bolgatanga in the UER organised farmers to hire a truck and bring their produce to Techiman market (Brong Ahafo Region). On arrival the itinerant traders organised themselves and prevented retailers and consumers from buying and imposed a condition that farmers could only sell to the itinerant traders . A similar example is reported by Peppelenbos, (2005) when the authorities in Accra established a special retail space in the market for farmers to sell to consumers. This did not go down well with the traders who asked that the market be closed. They got their way because itinerant traders threatened to stop supplying food to the city if the authorities did not consent to their request. These examples give a clear picture of the powerful nature of the association within and beyond the market. Such control measures and other market strategies send signals to the general public that traders make outrageous profits to the disadvantage of farmers.

Farmers, however, seem to have an advantage when considering their actions during the market crisis in 2006 (as discussed in Chapter 6). The fact that they are the main producers for the country during the dry season puts them in an important position.

Farmers could capitalise on this advantage to form a niche market where they would have control over the market. Although they are unable to exploit this to their benefit in day to day market transactions, when the need arose they took stance which sent significant signals of their importance. They were able not only to resist the aggressive and rude behaviour of the traders and their accomplices but also showed their solidarity, defied state regulations and got government officials to listen to their grievances’ Though their actions came at a cost to them at the time, it was of great benefit the year after. Even given that their actions were spontaneous, they still managed to attract the attention they needed. It would have been advantageous if the farmers could have capitalised on the opportunity created within that period to unite and press for a lasting solution. An underlying cause of their inability to do this during marketing could be their poverty and mutual distrust. The poorest of them are probably able to harvest only a crate or two.

However, the possibility that they, too, could benefit from collective price negotiations is usually met with scepticism, leading to separation from and betrayal of the remainder of the group.

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Their inability to cooperate is not the only challenge facing farmers. The inherently risky nature of agriculture is a major challenge in itself. In fact, despite the importance of their different roles, all the players are faced with risks peculiar to their particular function.