Making Good Money From Tomato Production, Cost-Benefit Analysis

Tomato is mostly produced in eleven out of the 16 regions in Ghana. These production regions include Upper East, Northern, North East, Bono, Bono East, Ahafo, Ashanti, Eastern, Greater Accra, Oti and Volta Regions.

The tomato sector in Ghana has failed to reach its potential, in terms of attaining yields comparable to other countries, in terms of the ability to sustain processing plants, and in terms of improving the livelihoods of those households involved in tomato production and the tomato commodity chain.

Despite government interventions that include effort to establish a number of tomato processing factories, tomatoes of the right quality and quantity for commercial agroprocessing are not being grown.

Many farmers still prefer to plant local varieties, typically with a high water content, many seeds, poor color, and low brix. Land husbandry practices are often suboptimal.

Average yields remain low, typically under ten tons per hectare. Because of production seasonality, high perishability, poor market access, and competition from imports, some farmers are unable to sell their tomatoes, which are left to rot in their fields.

Yet other farmers in Ghana have achieved higher tomato yields, production is profitable, and many farmers in Ghana continue to choose to grow tomatoes over other crops. One of the key issues for tomato farmers in Ghana is high per-unit input costs.

When farmgate prices are high, this is not such a concern for individual farmers—farmers in Greater Accra, for
example, incur large irrigation costs while yields remain low to grow for the off-season when prices are more likely to be high.

But when farmgate prices are low and variable, as is often the case for rained farmers who plant according to the rains and accordingly typically all harvest at a similar time, reducing per unit input costs is essential.

Further, for tomato processing to be competitive in Ghana, average per unit production costs need to be considerably lower so that farmers can sell their tomatoes profitably at the low but guaranteed prices offered by processors.

To go into tomato farming first, you need to have an idea about tomato production steps and processes. If you can get those right then you are on your way to making good money from tomato production.

Mind you, pests and weeds are major threats to realizing your income after spending so much. Now let’s put some figures down and work around it.

Operational Budget/Ha/Yr (2020)

ActivityCost (GHS)
Land rent300.00
Land preparation600.00
Seeds(100g x 4)240.00
Fertilizer & manure3,630.00
Agrochemical100.00
Labour3,500.00
Estimated total cost8,370.00

Yield

Yield varies greatly with cultivar and adherence to good agricultural practices. Yields of up to 35-40 tons/ha are achievable.

Market requirement

The fruit should be firm and free from blemishes or any damage.

Revenue

Average yield/ha = 40 tons = 40,000 kg

Percentage loss of 10%

Available yield = 90/100 × 40,000 = 36,000 kg

Packaging in 36,000 kg/52 kg = 692.3 boxes

Farm gate price/52 kg box = GHS20.00

Income = 692 boxes x GHS20 = GHS13,840.00

Net income = GHS13,840.00 – GHS8,370.00

                     = GHS5,470.00

Note:

  • This budget does not include fixed cost and overheads.
  • Price of tomatoes has been quoted conservatively. You can get higher prices depending on the time and location.

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