ANALYSIS OF MARKETING CHANENELS, GROSS MARGIN AND POSTHARVEST LOSSES OF SMALLHOLDER IRRIGATED TOMATO FARMING IN KASSENA-NANKANA MUNICIPALITY

Abstract

This study sought to analyse the marketing channels, gross margins, and postharvest losses of smallholder tomato farming in the Kassena Nankana Municipality (KNM) of Upper East Region, Ghana. The study investigates the available marketing channels of irrigated tomato farming and their determining factors, estimate farmers’ gross margins, postharvest losses and factors affecting the postharvest losses in KNM. Multistage sampling technique was employed to select 272 respondents comprising 172 farmers from six communities and 100 traders in the Kassena-Nankana Municipality. A semi-structured questionnaire was used to collect data during the 2017 farming season. In analyzing the determinants of choice of marketing channels, multinomial logit model was used, whilst gross margin formula was used for gross margin analysis. Descriptive statistics and Ordinary Least Square (OLS) were used to estimate the postharvest losses and factors affecting postharvest losses respectively. The results revealed that, the average size of irrigated tomato farm land of a smallholder tomato farmer in the KNM was 0.92 acres. Majority of the farmers sold tomatoes to retailers, followed by wholesalers and roadside traders being the least. The multinomial logit revealed that, variables such as improved variety seeds, farm size and access to market information significantly and positively influenced the choice of marketing channel of the producers in the KNM. Conversely, age, education, gender, household size, Farmer Based Organization (FBO), cost of labour and harvesting period negatively affected the choice of marketing channels. The gross margin analysis revealed that, farmers who used improved tomato variety seeds had more yield and revenue than those who used the local variety seeds. The revenue per acre of the smallholder irrigated tomato farmers in the KNM stood at GHS 4,262.01 for the season, whilst the total cost stood at GHS 940.87 per acre of land. Consequently, the smallholder tomato farmer in KNM of the UE/R realised a gross margin of GHS 3,321.14 per acre of land for the season. In spite of this, the smallholder tomato farmer was significantly affected by postharvest losses. The smallholder irrigated tomato farmer incurred an average of 41% (GHS 3,574.68) post-harvest losses per acre and a total of 59% (GHS 5,098.72) for the season. Equally, the postharvest losses were positively affected by the farmers’ age, credit received, market information, cost of labour and time of harvest. On the other hand, education, household size, use of mobile phone, gender, and average distance to nearest market were negatively affected by postharvest losses. Finally, the study recommends the strengthening of cooperatives and farmer-based organizations among smallholder farmers, the supply of improved seeds, strengthening market information system and establishing processing and storage facilities or revamping the Northern Star Tomato Company.