Testing the Performance of Fresh Tomato Markets Following Import Trade Liberalization in Ghana:

Abstract

A chronic issue of policy concern in Ghana is the implication of trade liberalization for the performance of agricultural markets. Much public opinion in Ghana blames the perennially volatile, highly dispersed and uncompetitive prices of tomato on the importation of cheap tomato products into Ghana. There is however insufficient empirical evidence to confirm this opinion. To the best of our knowledge, no empirical research on the performance of tomato markets in the post-liberalization period in Ghana has ever been conducted. This paper therefore seeks to provide evidence on the performance of Ghana’s tomato markets following trade liberalization. Such evidence is useful in assessing the implication of liberalization for the performance of Ghana’s food commodity markets. We used the threshold autoregressive model to analyse wholesale prices of fresh tomato gathered from four major markets in Ghana. The findings reveal that price transmission and adjustments parameters, key indicators of market performance, declined following the actual liberalization of Ghana’s agricultural markets. It appears that the underlying factors responsible for the performance of the tomato markets deteriorated over the period of the study. This may be evidence of liberalization being partly responsible for the marketing problem of tomato in Ghana.

Key Words/Descriptors: Trade Liberalization, Price Transmission, Market
Integration, Tomato, Commodities Market.