Accra — The Ghanaian economy has for a very long time been dependent on export revenues from gold, cocoa and timber, whose prices in the international market keep fluctuating.
Diversifying the country's export base, with focus on the non- traditional export sector has become the alternative. Naturally, non- traditional agricultural exports, including horticultural products, pineapples, fruits and vegetables, meat, fish and sea foods and plantain, etc have been identified as potential sectors to provide the elusive jobs.
However, there appears to be no future for Ghana's non- traditional exports as new quality and safety standards by western super markets have led to declining returns in the sector.
Dr. Ramatu Alhassan, a Senior Lecturer and Head of the Department of Agricultural Economics of the University of Ghana, disclosed Thursday that trend analysis from 1984 to 2003 show that apart from occasional increases in a few export products, year to year averages on non traditional agricultural exports do not indicate any progress for Ghana despite an increase in global trade in non-traditional exports.
Delivering a lecture on "Globalisation, Agricultural Trade and the Informal Economy," at this year's development seminar series organized by the Institute of Statistical, Social and Economic Research (ISSER) and the Merchant Bank at the British Council in Accra, Dr. Ramatu said apart from the fact the that earnings from the non traditional agricultural export sector are dropping, Ghanaian exporters are not capable of surpassing new hurdles that are about to confront the sector in future.
These hurdles, include new quality and safety standards, which involves the "full traceability of products to the farm." That is, if a container load of pineapples from Ghana is sold to any company in the world, the recipient, if need be, should be able to trace the product to the farm of origin in Ghana.
The new rules also requires producers to produce "comprehensive records, do risk assessment for new agricultural sites, packaging according to strict conditions, hygiene precautions during harvesting, announced and unannounced on-farm audits and minimum working standards for workers," among a host of others, which must be met before products are allowed entry into European markets.
The penalty for non compliance, according to Dr. Ramatu, is exclusion from the "growing mainstream standing order markets and relegation to unstructured and decreasing spot markets." But as things stand now, many Ghanaian exporters would find it difficult, if not impossible to meet these standards.
For instance to meet the requirements of the new rules, which include having toilet facilities on farms, effective, but safe pest control measures, storerooms on farms, residue pits, empty container disposable points, pack houses, and others, a Ghanaian producer will require about $240,000 to start with. Besides, close to $40, 000 is required to meet annual recurrent compliance costs including annual certification. These amounts would certainly be beyond the reach of many Ghanaian producers.
The emergence of these new rules has resulted in changes in the structure and conduct of global markets in horticultural products.
Dr. Ramatu disclosed that unlike the past, there is now the emergence of super markets, which now dictate the pace and terms of world food trade. For instance, in Western Europe and Japan, the super markets now control 80% and 65% respectively of the food trade.
Aside the constraints of quality standards and the threat of isolation, trading destinations are constantly changing without market information on emerging markets.
Dr. Ramatu cites for instance that while Asia and Eastern Europe have emerged in recent times as major markets for horticultural products, recording over 10% increase in global food and horticultural trade, majority of Ghana's horticultural exports are still destined for the EU.
Thus, until Ghanaian producers, invest in market intelligence to understand the rapidly changing opportunities and requirements of the market, Ghana's non traditional exports will have no future in the increasingly competitive global environment.
Dr. Ramatu even postulates that if the Economic Partnership Agreements (EPAs), which seek further cuts in tariffs, are implemented, the situation could be dire for non- traditional exports and for poverty alleviation.