Curbing Rice Smuggling: A major boost for local rice industry

 

By Ekow Totobi

An interesting correlation appears to be emerging between the recent proscription of importing Asian rice through neighbouring countries and the sudden upsurge in activity on the domestic rice cultivation front.

Be it coincidental or not, since the month of September -- barely weeks after banning the practice believed to give vent to massive smuggling of more than 100,000 metric tonnes of unchecked and uncustomed rice into the country every year -- domestic rice farming appears to be experiencing some curiously progressive impetus on a variety of fronts, which now leaves observers wondering just how much damage the dumping on our local market of cheap, smuggled rice may have already caused Ghana’s indigenous rice industry.

Rice has gradually become a vital staple in the Ghanaian diet, and theories abound in how home-grown Ghanaian rice can compete with any grade of rice in taste as well as nutritional value. Yet the local rice industry has stagnated for a long time because of the myriad challenges which confront it. Ghana currently imports about 70% of its rice needs from overseas, mostly Asia, and it is be expected that the local rice industry could, given the right impetus, meet the remaining 30% demand and gradually grow its share of the market from there.

Unfortunately, smuggling of rice through the country’s land borders has not allowed this to materialise. Next to limited access to capital for rice farming, the local rice industry’s biggest headache may very well be the lack of access to fair market prices; aggravated here by smuggling.

Early this year, a Daily Guide report, quoting Ministry of Information sources (Daily Guide/ Ghana Web -- April 9, 2013), stated that smuggling through land borders, notably through the Ghana-Ivory Coast border, accounted for an extra influx of an estimated 100,000 metric tonnes (about 4 million bags) of rice into the country every year; and that some 25 to 35 truckloads of smuggled rice cross the borders and offload into major Ghanaian markets on a daily basis.

This trade, according to the report, costs the country approximately GH¢69million every year. Because smuggled rice evades import duties and taxes, they tend to sell rather cheap -- in fact, so cheap that over the years locally grown rice has been simply swamped out of the retail market altogether, winding up as the ultimate casualty of the illicit trade in rice.

But suddenly, over the past couple of months -- and presumably following the crackdown on smuggled rice -- things seem to be changing for the better and market observers are alluding to a possible transformation of fortunes for Ghanaian rice. There is now encouraging talk in official circles about rolling-out functional strategies to develop the rice sector into a major net producer in West Africa, and make the crop outstanding in Ghana’s quest for sustained food self-sufficiency.

Fortunately, a number of government agencies and international and multilateral aid agencies have acknowledged the potentials of the local rice industry and are working toward its invigoration by helping to improve access to capital and farm inputs, and encouraging the use of modern production techniques and practices. In the Ashanti Region we have had reports (Ghana News Agency-Nov 25, 2013) of significant increases in per-hectare yield of rice farms in districts like Atwima-Mponua, Asante-Akim North and Central, Ahafo-Ano North and Adansi South, thanks to the impact of a joint technical cooperation initiative between the Ministry of Food and Agriculture and the Japanese International Cooperation Agency (JICA). The intervention falls under the Sustainable Development of Rain-fed Lowland Rice Production Project -- a joint collaboration between JICA and the Ministry of Food and Agriculture aiming at helping to improve rice yields, not only in Ashanti but in all the Northern Regions as well.

Some rice farmers in the northern regions are already benefitting from a similar intervention rolled-out also through collaboration between the Ministry of Food and Agriculture and the French aid agency Agence Francaise de Development, which invested 17.3 million euro into a five-year long project aimed at increasing crop production, processing and marketing in the Northern, Upper East, Upper West and the Volta Regions of Ghana (GNA/nanumbanorth.ghanadistricts.com.

For me, one of the most impressive activities on the local rice front is what is happening in the North Tongu District of the Volta Region, where the Global Agri-Development Company (GADCO) seems to be registering great strides in local rice production. The company currently cultivates about 800 hectares of long-grain perfumed rice; harvests an average of 40,000 bags; and operates a state-of-the-art processing plant on its plantation near Sogakofe.

Besides successfully launching and promoting its own brand of rice onto the local market, GADCO is mobilising smallholder farmers in and around the North Tongu district and partners them along the path of increased production and easy market access. They mean to triple incomes for smallholder rice farmers and build skills and improve the livelihood of over 7,000 farmers.

If indeed, the lack of access to fair market prices aggravated by smuggling has been a major show-stopper for growth of Ghana’s rice industry, then one humbly appeals to all stakeholders in the business of promoting local rice production, processing and marketing to act, mobilise and take full advantage of the new squeeze on smuggled rice by seizing its rightful share of the market ....while the ban lasts.

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