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November 19, 2008

Refurbished Ghanaian tomato factory remains idle

GHana's refurbished multi-billion cedi Pwalugu Tomato Factory, now christened Northern Star Tomato Factory, might remain a “white elephant” as it cannot operate this year.

This is due to an unresolved impasse between the management of the factory and tomato farmers in the region. The unresolved impasse hinges on a disagreement between the farmers and the management on the pricing regime.

Whereas management decided to purchase the produce at GH¢3.8 – GH¢4.00 per 40kg crate of tomato the farmers contended that the amount fell short of production costs and instead demanded GH¢5.00. Market Queens are buying it between GH¢7.00 and GH¢9.00.

Due to this disagreement, production came to a halt last season which has set the stage for fresh negotiation.

But, Mr Kwamena Darkwa, Farm Operations Manager of Northern Star Tomato said that “no agreement has been reached and we are, therefore, in a limbo as I am afraid the factory might be compelled to close down." He explained that last year, management signed an M.O.U. with the farmers under which the farmers were to be supplied with free seedlings and in turn sell their produce to the factory at the agreed price of GH¢3.8.

He, however, stated that the farmers reneged on this agreement and instead decided to sell their produce to market queens from Accra at between GH¢7.00 and GH¢9.00.

According to him, though the tomato season had begun “the management has failed to supply the farmers with the seedlings and this gives them the free hand to sell in the open market. If that happens the factory, which is wholly under the Ministry of Trade Industry and PSI, will find it difficult to break even or make any profit,” he pointed out.

Mr Philip Abayori, chairman of the Ghana National Tomato Producers Federation (GBTPA) for his part said that the federation was close to reaching an agreement with the Ministry of Trade and Industry to fully participate in the operation of the factory to enhance its sustainability.

For example a letter dated October 10, 2008 from the MOTI assured the federation of its preparedness to enter into negotiations with stakeholders to foster better business relations.

Ghanaian Times

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