You are here: HomeBusiness2020 05 31Article 966562

Business News of Sunday, 31 May 2020


145% hike in air freight charges affects fruit and vegetable exports

File photo File photo

In spite of government’s efforts to boost agricultural production and exports, farmers and exporters in the fruit and vegetable industry continue to grapple with teething challenges.

Business Finder’s interactions with players in the industry have revealed for instance that a 145 per cent hike in air freight and cargo charges for fresh fruits and vegetables is adversely impacting farmers and exporters of those perishable items, as they can hardly increase the volumes being exported.

President of the Vegetable Exporters and Producers Association of Ghana (VEPEAG), Mr Felix Kamassah, told this paper, prior to the COVID-19 outbreak, exporters were charged $1.10 per kilogram (kg) of fruits or vegetables by passenger flights but they now pay $2.70 per kg via cargo flights in the wake of the flight restrictions. Agencies that work in Ghana for the cargo flights say the flights have to pay landing and ground charges and so cannot do much about the air freight charges on the fruits and vegetables.

$243,000 in air freight charges a week
Where 1,000 kg is equivalent to 1tonne, and where the industry does a maximum of 90 tonnes of exports a week, then at $2.70 per kg, exporters are parting with $243,000 in charges a week, which converts to GH¢1,397,250 a week and GH¢5,589,000 a month. Prior to COVID-19, then at $1.10 per kg, exporters were paying $99,000 (GH¢569,250) per week. This represents a 145.5 per cent increase in air freight charges.

Lower charges elsewhere

Mr Kamassah told this reporter that “in Ethiopia, the export agency has an arrangement with Ethiopian Cargo and Logistics Services which is owned by airline (Ethiopian) to the effect that exporters pay subsidized charges. Our counterparts in other parts of Africa are paying far less than we do here.

Mr Kamassah lamented the impact of the high charges among other challenges on the vision to rake in $1billion in earnings in seven years from the fruits and vegetable industry.

Over 300 workers lose jobs

One of the varied impacts of the challenges in the industry is job losses. Other farmers Business Finder spoke to lamented challenges that made it difficult for them to continue operating. For such farmers, the outbreak of the COVID-19 had aggravated their plight.

With seven farms across the country and some 400 workers, Mr Harchavari Singh Cheema, an Indian entrepreneur had to close down four of the farms, cut down farms hands to just 40.

Mr Cheema fears he might be compelled to close the remaining farms if the situation remains unchanged.

According to him, the best he could do in terms of exports was to send just 3 tonnes of vegetables a week.

He bemoaned the manner in which final inspection is carried out by the Plant Protection and Regulatory Services Division (PPRSD) of the Ministry of Food and Agriculture (MOFA), at the airport, saying ”by the time final inspection is done the flight has already departed and the perishables have to be returned home to rot, he lamented.

“Nothing is working here; we have informed the authorities of our challenges but the story is the same, there is no improvement, rather it’s getting worse by the day,” Mr Cheema told this reporter in an interview.