Financing and marketing horticultural products in Ghana : the prospects for export growth

This study analyzes Ghana"s horticulture subsector, with emphasis on nontraditional exports (NTEs). Certain commodities such as pineapples, vegetables, and yams receive particular attention because of their potential for expansion and hence their strategic importance in contributing to the country"s agricultural export diversification policy. The study used a modified agribusiness subsector framework to determine marketing arrangements, the nature of firms, and the coordinating mechanisms to facilitate the flow of commodities in the subsector. Transaction cost theory was used to analyze how asset specificity, uncertainty, and access to finance and information are the major determinants of institutional arrangements in production and marketing. Results revealed that several heterogenous participants are involved in financing and marketing horticultural products in Ghana. The financial arrangements used in the subsector are dominated by self-finance, with funds obtained from friends and family, retained earnings from other businesses, and participation in informal groups, such as susu clubs. Supplier credits flow freely from the farmers all the way to the importer. However, formal finance is confined almost exclusively to well-established large exporters. finance is a constraint for many exporters, it Financial constraints, however, are not as serious as those posed by a lack of the infrastructure, research and development, and government policy which exporters need to gain a competitive edge in world markets.