Nicholas Amartey
Nicholas Amartey

Nicholas Amartey is a social entrepeneur with a passion for agriculture.  He is passionate about the transformation of Africa's agricultural production, processing and marketing using the value chain management approach. he uses his knowledge and skills in agricultural value chain development, and entrepreneural spirit to inspire and empower smallholder farmers, young people, companies and organisations to initiate and attain growth.

Highlight

Nicholas’ project highlights the systemic recommendations which can be made from comprehensively mapping a value chain and examining interdependencies among chain actors, and so identifying the need for upgrading activities across the chain, rather than treating them in isolation. He also proposes a journey of incremental improvements - ‘start small; small steps’ – to build the chain gradually in line with existing attitudes.

Context

Tomatoes are the second most consumed vegetable in Ghana. Although the population consumes about 3 million tonnes a year, only 30% are grown domestically. Ghana is also a major importer of tomato paste - over 78,000 tonnes annually.

Tomato farmers are generally smallholders who own or rent up to 1.5 hectares. The most intense areas of tomato cultivation are limited by access to water and rainfall patterns. Nick’s project focused on Tuba, a district in the Greater Accra Region which includes irrigation facilities for around 220 hectares. Production is seasonal, with gluts during the rainy season, postharvest losses of at least 20% mostly due to poor seed quality, excessive use of fertilizer and chemicals, poor harvesting practices and poor handling during transport.

Approach

Nick started by conducting three consumer focus groups in the capital, Accra, with a total of 24 people drawn from different socio-economic backgrounds. He followed this up with individual consumer interviews and shopper observations. Next he interviewed retailers (4), wholesalers (2) and middlemen at four different markets; conducted two focus groups and additional in-depth interviews with farmers; met four input suppliers (seeds; fertiliser; irrigation and private extension services) and had discussions with three government agencies covering agribusiness, crop science and irrigation.

Nicholas with pen and paper in discussion with a farmer
Nicholas interviews a farmer

Understanding the market

Some Ghanaian consumers are becoming sophisticated in their demand for quality products, and are ready to pay a premium for goods that meet their preferences. Nicholas reports that “The focus groups revealed that shoppers’ decisions are driven by taste, freshness, texture, colour and traceability. Supermarkets are responding to the needs of their high-end shoppers, who are willing and able to pay for quality and healthiness.”

Mapping the chain

Producers do not plan production. They cannot afford to take advantage of the irrigation facilities, and so miss out on the more lucrative dry season market. They pack into 10kg and 20kg wooden boxes which result in a lot of waste. They have no sorting, grading or storage facilities. Wholesalers have to grade, repackage and store tomatoes for their clients. They also incur costs of storage and transport, especially during the dry season.

Nick highlights that, “Farmers lack any market information, so they cannot factor in those issues and insights into decisions on what and how to grow.”

Input suppliers are more focused on large commercial farms, so have only a transactional relationship with smallholders. There is very limited information sharing about the suitability of varieties for particular seasons or production conditions. Hence, given the price of inputs, farmers resort to locally produced and stored seeds.

Seed shop
Local seed shop in Ghana

Middlemen wield most of the power in the chain. They are the direct link between farmers and urban markets. “They constitute a strong cartel of market traders that controls the distribution network of fresh tomatoes to the market, determining the number of crates each farmer can bring to the market on market days as well as dictating the price to farmers. They have strong relationships with wholesalers and retailers, but do not share information with producers to enhance productivity and efficiency with the chain.” As a result, market forces do not apply, reducing the incentives for efficiency and effectiveness upstream. And given the distance to market, most farmers rely on middlemen to collect their tomatoes, and “If these traders do not show up, farmers leave them to rot in the field because there is insufficient local demand.”

Wholesalers have to re-grade and re-pack produce because farmers and middlemen have failed to do this in line with retailers’ specifications. They incur storage and transport costs because the chain is not coordinating production and harvesting in line with market demands. “All these unnecessary costs mean the chain has less money left to offer incentives to encourage beneficial behaviour, so it remains dysfunctional.”

In the absence of a high performing chain with whom to build a long term relationships, retailers are largely transactional. “Overall, there is little market orientation, low levels of investment and lack of organisation amongst farmers or along the chain”.

Findings and recommendations

Nick explained that, “I categorized my recommendations into short, medium and long term, based on time, difficulty and cost implications in implementing them.” His proposals are shown in the matrix. Nick started by delivering training on leadership and teamwork, and on production planning and record keeping. “However, the biggest challenge – and biggest reward - will be achieving enough of the recommendations that the local chain can become preferred suppliers for supermarkets, so the farmers can benefit from those higher value markets.”

Lessons

Nick’s advice to others is that it needs a collaborative mindset to get all actors on board. “The key role of relationships among actors is very important, and so I found that it was imperative to get a number of actors who are willing to participate and committed to work together. Even then, it involves a lot of time and effort in planning to get the desire results.”

He also learnt that it is critical to walk the chain, starting from consumers and then working upstream to input suppliers. “Understanding consumers’ different preferences must be the starting point.”

More information

Find out more about this Award, Australia Awards and the Australia Awards - Africa 2016 Agribusiness Short Course Award.

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