Saturday, July 28th, 2007

How to tell if Gonzalez is lying.

Imported tomato paste among home grown tomatoes in a Ghanaian market

In a previous post I mentioned the threat “free” trade can pose to Ghana and developing countries. Ghana is currently experiencing trade problems with both chicken parts and tomato paste.

A survey has revealed that the import of tomato paste and chicken parts was having severe impact on the production of local tomatoes and poultry and any further tariff cut could drive peasant farmers out of their source of livelihood . . . substantial increase in tariffs was rather needed to ensure market access and adequate levels of income that would secure tomato and poultry production in the country.

More and more sources are saying that for developing countries to develop successfully, they need to protect their agriculture, and Ghana is no exception.

. . . the survey also showed that poultry production was at a high risk of collapsing, as most farmers had moved from the production of broilers to eggs due to the influx of imported chicken in markets.

This certainly rings true to me. With chickens, we concentrate on egg production at present. We raise broilers for Christmas, and sometimes at other times, but mostly we are concentrating on eggs. At Christmas we had many more buyers for broilers than we had broilers, with some people coming for some distance. And this reduced production is because imported chicken lowers prices and demand through much of the year. The people on the ground in Ghana are making these decisions based on realities of the market place.

This week it was reported that the North Star Tomato factory faces closure.

The Northern Star Tomato Factory, formerly the Pwalugu Tomato Factory, faces an imminent closure if the importation of under invoiced tomato paste into the country is not checked.

This is as a result of threats from the only local tomato processing company in the country, Trusty Foods Limited, an Italian investment, which buys its raw material from the factory to drastically cut down on its demand as a result of what it described as the “unfair competition” from under-invoiced tomato paste imported into the country.

It is, therefore, anticipated that should the threat be carried out, the numerous farmers in the northern part of the country who depend on the factory as their largest market would lose out while the huge investments from the government to revive the factory will also go to waste.
. . .
The importation of under-invoiced products into the country is said to be denying the state several millions of dollars annually, particularly at a time the government finds it difficult meeting its annu¬al revenue targets.

. . . surges of prices of tomato paste and chicken parts were having a severe impact on the ability of Ghanaian peasant farmers to feed-their families.
. . .
“It saddens my heart when I have to layoff some workers when we are forced to reduce our production,” he said, adding that “we presently employ up to 400 people and indirectly provide a ready market for thousands of peasant farmers in the north”.

Ghana grows some of the most beautiful and tasty tomatoes in the world. This is not an industry we want to lose.

Under invoiced imported palm oil products are also being brought into Ghana.

A country must be able to feed itself. If trade practices destroy the ability of people to make a living farming, the country is in serious trouble. We lose jobs, and there is no food except for the rich who can import it. Angola and Gabon currently experience this. Ghana needs to protect its farmers and its agriculture. You can bet countries exporting chickens and tomato paste into Ghana are protecting their agriculture. Those importers engaged in under invoicing need to be caught and prosecuted.

With the current job losses in small businesses due to the electricity outages, it is doubly important to protect and build up agriculture, and to keep people employed and fed.