Business News of 2014-01-28

Ghana to reduce heavy rice imports

Ghana is expected to drastically reduce its heavy rice imports in the next three years, the Minister of Food and Agriculture, Mr Kofi Humado, has said.

He said “so far, we have been able to engage some big time rice growers in the southern Volta around the lower Volta River. Companies such as GADCO and AGROBRASE are producing on a minimum of 4, 000 hectors.”

According to the Food and Agriculture Minister, the rice production by the two companies alone is closing the gap, and noted that “If we are able to revive all the production centres along the Volta River and also support some of the companies up north, we believe that in the next 3 years, we should close the production gap so that Ghana will not have to rely heavily on rice imports.”

Similar pledges have been made in the past but the country’s import bill on rice continues to skyrocket.

The situation raises the question about the government’s level of commitment to ensuring that the imports are reduced.

Rice imports

It is estimated that Ghana imports between US$200 million and US$400 million worth of rice annually.

The amount is said to be one of the major factors that swells the country’s import bill, while putting pressure on the local cedi which is consistently losing value against the United States’ dollar.

Due to the high demand for the cereal, particularly the perfumed brand, many business people have found rice imports a lucrative venture and are importing from all sources around the world.

On the other hand, the government has also found it an easy source to make some revenue and has since 2010, reintroduced taxes on the importation of rice. The move has not only made the importation of rice and its sale to the people more expensive but has also created the platform for people to smuggle the cereal into the country.

According to Food Security Ghana, two of the major motivators for smuggling rice are the high import tariffs and, more importantly, the high differences between neighbouring countries’ duties and taxes.

It said in the rice sector, a gap of 24.5 per cent exists between import duties as compared to Ghana’s 37 per cent and Ivory Coast’s 12.5 per cent, leading to massive smuggling on Ghana’s western border.

Recently, the Ministry of Trade and Industry directed that all imported rice through the border between Ghana and Cote d’ Ivoire should be seized but the directive was short-lived as the latter retaliated by barring the export of cashew through its borders.

Mr Humado said “The only cereal we are not very self-sufficient in is rice and even with that, we are doing about 55-60 per cent of our consumption needs locally.”

He was optimistic about the move by the ministry to reduce the imports, and noted that “even if we are still to rely on imports, it should be very minimal and confined to specific varieties because maybe Ghanaians would prefer particular varieties, but generally, the consumption of imported rice should reduce.”

Rice quality and local consumption

One of the main reasons Ghanaians prefer imported rice to the locally grown ones is because of quality. Imported rice is very well polished and perfumed as compared to the local ones, hence the high demand.

It also has to do with the varieties that are planted outside.

Rice breeders in the country are optimistic that with the right financial support from the government, they would be able to develop similar varieties to meet the taste of the imported ones.

In a separate interview, Dr Kofi Dartey, a rice breeder at the Crop Research Institute (CRI), said some upland rice varieties he developed were presently being taken through the milling test, after which they would be replanted and a cooking test would also be conducted.

“Once we are sure people like it, we will start the multiplications. Hence, we will take it to different locations to try the rice to ensure that there are no diseases to destroy them,” he said.

We want to ensure that the quality is good and the variety is also stable before we give it to farmers to plant, he added.

Mr Dartey said the country’s average rice production per acre stands at 1.5 tonnes, “but with this upland rice, we expect to have three tonnes per acre. Additionally, if the rains are well targeted, a farmer can get up to five tones.”

Rationale for breeding

“The main reason for breeding the upland rice it is to get the quality that we import. The next is to increase the yields through further breeding,” he said.

Dr Dartey said “The rice must be long, slender and, when cooked, should not be hard. There are different types now but it is later that they will be narrowed down.”

He said there were presently more than 100 varieties planted on the farm being used for the experiment.

Challenge

Presently, there is only one mill being used which is not up to scratch and there is also no grader.

But should more mills and graders be made available, the situation will be turned around, according to Dr Dartey.

“If all those are not available, a good rice will never come out. Presently, it can go through only one polishing but the imported ones go through several rounds of polishing,” he said.