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Impediments to Marketing African Natural products From Ghana: Preliminary Results
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Abstract
For most of the African countries agriculture still remains the mainstay of the economies supplying both food and incomes via marketable surpluses. However, many odds against agriculture such low productivity, poor prices, and drought among others make it unsustainable. Results thus far show that such dependence has contributed little to neither economic development nor growth. Still many of its people living on and from agriculture remain poor, and are susceptible to hunger and malnutrition. Additionally, their over reliance on a few traditional exports such coffee, tea, and cocoa etc., products whose world prices keep declining has not helped either. At most this is futile response to raising incomes of its people, let alone spur any meaningful development. Agricultural may still contribute to development, if the countries could diversify from traditional products to the untapped areas. The continent's rich botanical heritage offers an excellent opportunity to diversify away from traditional exports. The natural products have a greater appeal to consumers especially in the rich west. Thus, development of natural products as alternative or complimentary to the current mix of tradable products will positively impact the social and economic lives of many people, especially those in the rural areas. Additionally, diversification of the production systems to include natural plants provides a superior route to the creating viable agribusinesses in rural communities currently lacking. Natural products happen to have enormous advantages; First, indigenous African plants occur naturally and so are relatively easy to cultivate commercially. Second, natural plant production is labor intensive rather than capital intensive, and so minimizes capital investment while at the same time maximizing job-creation potential. Third, African communities have extensive knowledge of indigenous plants, creating a natural competitive advantage in this sector. ASNAPP (Agribusiness in Sustainable Natural African Plants Products) a non-profit organization formed in 1999 with funding from USAID (United States Agency for International Development) is helping create and develop successful African agribusinesses in the natural plant products sector. The organization focuses on the development of high-value natural plant products that enable African agribusinesses to compete in local, regional and international markets. These products include herbal teas, culinary herbs and spices, essential and press oils, as well as medicinal plants. Currently, ASNAPP operates in five countries, namely South Africa, Ghana, Rwanda, Senegal and Zambia, working with 25 agri-enterprises that represent more than 2000 small-scale natural plant suppliers. The prospects for natural products market is very bright, for example the global nutraceutical market alone is estimated to be worth 60billionannuallyinsalesofdietaryandmealsupplements,aswellasspecialtyproducts.Thereisalsoincreasingdemandfororganicandnaturalproductssuchasherbalteas,essentialoils,herbsandspices,phytomedicinesandphytocosmetics.Thisgrowthhasbeensupportedbyaglobalswingawayfromsyntheticproductstothosethatarenatural,healthy,sustainablyproducedandfairlytraded.Inthecontextofworldtradeinnaturalproducts,Africancountry′snaturalforestssupplymoreherbs,medicinalplantsandnaturalfoodingredients.TheAmericansandEuropeansarethemajorconsumersofnaturalproductsintheglobalmarket.Productssuchastheherbaltea′s,essentialoils,cosmeticandspiceshavereadilyavailablemarkets.Naturalproductsaleswasestimated34 billion in 2001, It is estimated that Global sales for organic and natural products will reach about 100billionby2008atanannualgrowthrateof20−30316 million dollar business in 1996 to over 454millionin2001(AlbertaEssentialOils,1996;Datamonitor,2002).Indeedthereisuntappedpotentialrangingfromrawproductstoprocessedones,whichcouldfetchevenhigherreturnstothefarmers.However,itisonlyafewlargeenterprisesthatareactiveinthesector,leavingruralcommunitieswhohadinfactbeenthefirsttodiscoverthehealthandnutritionalpropertiesofindigenousplantsoutinthecold.TheASNAPPGhanaprogramwhichcommencedin2000iscurrentlyworkingonessentialoils,lippiatea,grainsofparadise,cryptolepis,kombobutter,sheabutterandArtemisia,withthefocusontheEastern,Central,Ashanti,Volta,GreaterAccraandNorthernregionsofGhana.ThenaturalproductsindustryinGhanaischaracterizedbylowinput−lowoutput;mostlyoperatedbysmall−scalefarmers(suppliers)withlowlevelsoflevelsofformaleducationandagriculturalproductionknowledge.Inthisrespectthesupplysideproblemsmaybesummarizedasregularityofthesupplies,qualityandtimeliness.Organizationally,thescaleoftheoperationsmaybeabottleneckonehand,ontheotherhand,information,capital;productqualityandassurancemechanismshindersuccessfulcommercialization.Thedomesticmarketsarelargelyatthelowlevelsofcommercialization;theoperatorshavelimitedtechnicalknowledgeaboutnaturalproducts,andlimitedcapitaltoexpandtheirbusinessesandexploitthereadilyavailableforeignmarkets.Similarly,onthedemandside,theremaybelackofconsumerinformationastotherangeofproducts,wheretofindthemandwhatremediestheyoffer.ThispaperhastheobjectiveofhighlightingthemarketingimpedimentsfacingthenaturalproductsmarketintheretailandwholesaleportionsofthechaininGhana.Specifically,(i)profilethetechnical,financial,organizational,etc.,constraintsthetradersface(domesticallyandexternally),(ii)profilethenaturalproductrangeandtheirfunctions(iii)suggestpolicyinterventions.PreliminaryresultsfromtheGhanabusinesssurveyshowthatsevenoutoftenofthebusinessesareretaileroperated,whosetwo−thirdssupplyisdependentonthesmall−scalefarmers.Thereresultsalsoshowthatvirtuallyallthetradershavenotreceivedanytechnical,financialortradeassistancefromanyorganization.Atmostonly1outoftenbusinesseshaveventuredintoexternaltrade.Thepreliminaryresultsshowtremendouspotential,howeveralotneedtobedonetotaponthispotential.TheanalysiswillbebasedonasurveythatwascarriedoutinGhanatocorrectinformationon;productranges;thesupplychain(fromproductiontotheretailstoresandpotentialforexports.Theanalysiswillcontributetowardinformpolicyofwhichmarketingtobeaddressedandinformdomesticandforeignconsumersofthepresenceofsuchproducts.References:AlbertaAgriculture,Food,andRuralDevelopment,Herb/SpiceIndustryFactSheet.CompiledbyDennisDey.AG−Ventures,Agdex263/830−1,www.agric.gov.ab.ca,September1996.Datamonitor,Nov15,2002.MartyT.S.,andPatrickR.,"NaturalProductSalesTop42 Billion" Natural Foods Merchandiser, 2004, volume XXV/number 6/ p. 1 Organic Natural health, 2001. http://www.health-report.co.uk/organic-cosmetics-usa- opportunity.htm#Organic/natural%20industry%20profileInternational Relations/Trade,