A Case Study: Explaining the Price Collapse of Tongan Squash Export to Japan

Abstract

This article focuses on the squash industry of Tonga, which was successfully developed in the 1990s and declined in the 2000s. It analyses how squash export prices are affected by the quantity of squash export and the number of squash exporters. An examination of the squash industry demonstrates that the collapse of the export prices and the decline of the industry is caused due to the lack of structural frameworks for managing the industry effectively and/or the functional failure of the framework. It is perceived that the decline of the industry was due to the withdrawal of the squash export quota from the government, but the main factor appears to be the failure of the government to control the quality of the squash exported to Japan. Thus, a weak institutional capacity prevented the sustainable development of the industry. This article concludes that the development of institutional and human capacity to establish structural frameworks for managing industries and operating the frameworks effectively will contribute to the sustainable development of an export-oriented agriculture-based industry in the PICs.