Accra, Adeiso, Africa, Asamankese, Blue Skies, Burkina Faso, Business, Costa Rica, European Union, Export, Federal government of the United States, Fruit, Ghana, Government, Invesments, Nsawam, Real estate, Residential area, Tema, Uncategorized, United States, United States government

Ghana: Fruit processing companies look offshore for fruits

Reflex Eco Group – Africa News

Antony Sedzro (Ghanaian journalist)

sedtony@yahoo.com

This Blog is sponsored by http://www.reflexecogroup.com

Ghana’s pineapple production and exports have slumped to the lowest in nine years, throwing more than 500,000 people, mostly farmers out of job.

Not only has the situation denied the country the millions of dollars it used to receive in foreign exchange, the economy has lost some fruit processing companies, with the surviving ones struggling to get raw materials to process.

Processing companies such as Blue Skies, HPW, Peelco and Pinora have had to import more than half of their raw materials such as mangoes, pineapples and papaya (pawpaw) as they struggle to source them locally.

Other processing companies in Adeiso in the Eastern Region, Nsawam, Asamankese and Tema have all folded up for lack of raw materials that can make them competitive.

Industry value chain actors told the GRAPHIC BUSINESS newspaper that the worsening condition was due to the lack of financing for cultivation, low quality inputs, especially pineapple suckers and the age-old challenge of the country not adapting quickly to a new variety now preferred in Europe, the MD2, developed by Costa Rica.

An acre of pineapple farm requires between GH¢8,000 and GH¢9,000 to cultivate. This has put the thousands of farmers out of the farm, even though there is huge market for fresh pineapples and other horticultural produce locally and internationally.

Currently, the country only exports about 35,000 tonnes of pineapple a year, with exporters reducing from 50 in 2004 to about 15. Employment in the industry has significantly slumped from about 600,000 to about 60,000.

Chief Agronomist at Blue Skies, Mr Ernest Abloh and the Head of Administration and Control at HPW Fresh and, Mr James Obeng, told the GRAPHIC BUSINESS in separate interviews that their sources of fruits to supplement what they get locally were Cote d’Ivoire, Burkina Faso, Togo and Benin

Mr Abloh said Blue Skies had just sealed a deal to air-lift 120 tonnes of mangoes a week from Brazil for 10 weeks, mainly due to inadequate local supplies and from the sub-region, especially during the crop’s off seasons.

GRAPHIC BUSINESS newspaper investigations revealed that the lack of credit is the principal challenge facing the industry, since pineapple cultivation is capital intensive.

Blue Skies, which has the capacity to process 30 tonnes of fresh pineapple a day for export, is only doing 20 tonnes a day. Last month, the company laid of over 400 workers due to lack of raw materials for off peak production.

HPW, a Swiss company which used to export fresh fruits from Ghana, had to make a hard U-turn to dry fruits – pineapple, mango and coconut.

“Ghana’s fruit industry consists of a huge amount of small farmers often with a weak set-up and very few large and professional fruit growers/exporters. Our demand of more than 6,000 tonnes of fresh fruit is substantial for the industry,” top company officials told the GRAPHIC BUSINESS at the factory at Adeiso.

Exports of fresh pineapples reached the highest in 2004 with 71,000 tonnes a year, making Ghana the second largest exporter of the produce, after Cote d’Ivoire. These exports raked in approximately US$50 million to private sector exporters.

The Director of Export Marketing and Quality Awareness Project, (EMQAP) Ministry of Food and Agriculture (MoFA), Mr Mawuli Agboka, told the GRAPHIC BUSINESS that although finance was a challenge for the farmers, the project was making very holistic intervention in the horticultural sub-sector.

According to Mr Abloh, the company cited its operations at the current location because of proximity to raw materials, but with time, productivity had dipped, particularly after the world demand shifted to MD2 from the smooth cayenne that Ghana used to export.

He said the company got its extra fruits from other countries, but had started “a vertically integration” to produce its own raw materials.

“We didn’t want to go into production ourselves, but now we have to do it. We already cultivate all our raw material needs for passion fruit,” Mr Abloh said.

Infrastructure abandoned

Huge edifices of pack houses and cold chains constructed in some pineapple and mango growing areas with grant from the United States government are lying idle, with the low productivity.

Some farmers have also converted their farms to grow other crops or sold them for estate development.

This is prevalent in Samsam, a village near Nsawam, where the GRAPHIC BUSINESS found some farmlands turned into sand winning pits or for the construction of residential property.

Centre of excellence

The GRAPHIC BUSINESS gathered the industry has no centre of excellence to bring best practice to the industry including tissue culture, multiplication of planting materials and other specialised studies.

Blue Skies has built one ultra-modern centre of excellence for mango, but until now the Ministry of Agriculture has not posted scientists and other personnel to make the centre functional.

Currently, the fresh fruit company has its own centre of excellence with which it supports its out-growers.

But the Director of EMQAP said the project had a number of interventions to increase productivity and make best practice part of the horticultural sub-sector.

He said the seven-year EMQAP project was tackling infrastructure, technology, provision of inputs and technology to support the industry.

For example, to make pineapple planting materials available, EMQAP was helping four farmer groups in the Ga West and Akwapim South districts to multiplicate planting materials.

The project has given each group 44,000 plantlets which could be multiplied six times as well as inputs. This intervention is expected to affect over 200 farmers.

Mr Agboka said EMQAP was also supporting the Crop Research Institute in the Ashanti Region to do maintenance breeding of selected crops under the project.

The project has also spearheaded the enactment of the Plant and Fertiliser Act, Act 803, 2010, which among other things, allows for certification of nursaries and vegetative planting materials for the country.

“We certified eight planting material producers in 2011. This is to ensure that we have quality planting materials on the market,” Mr Agboka stated.

The project director, however, agrees that beyond the direct intervention by the project, there was also the need for creating a pipeline of financial support, through public-private partnerships, to enable the farmers access finance to cultivate their produce.

He believes that Ghana had much more favourable conditions to do far better in pineapple and other horticultural produce than Costa Rica which currently leads in the sector.

History and Potential of Pineapples

Horticultural produce from Ghana has shown a lot of promise over the years. The country has been involved in the export of horticultural exports since the 1980s. Exports rose quickly from US$28 million in 2000 to US$75 million by 2006, with a lot of potential at hand, with mangoes, pineapples and chilies showing firmer promise.

Statistics indicate that there are about €1 billion worth of pineapple market; €3.5 billion for bananas and US$250 million, all in the European Union alone.

Ghana’s pineapple exports blossomed in the 1990s when pineapple exports formed an association and reached an agreement with a vessel to lift fresh produce from Ghana, after visiting Cameroon and Cote d’Ivoire.

The twice a week lifting accelerated exports of fresh pineapples and other horticultural produce. Pineapple exports, thus rose from a few tonnes a week to 71,000 tonnes in 2004. The exports started slumping very fast when Costa Rica introduced the much sweeter MD2 pineapple which caught on well in the EU market.

This caused the market for Ghana’s variety, the smooth cayenne, to plummet to the current low levels of 35,000 tonnes in 2012.

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