Trouble over Quality Grain Rice

*Five families pull brakes on project

There is looming trouble over the reactivation of the defunct Aveyime Rice Project as five families, whose lands were compulsory acquired by the State through an Executive Instrument (EI. 15) of 1977 for the project, are heading to the law court to halt the new owners, Messrs Prairie Texas Inc, from developing the site.

The suit over the Accra plains site, which the State acquired through its agent, the Agricultural Development Company (ADC), is also against the Attorney General, the Lands Commission and the Land Valuation Board.

Investigations by this paper indicate that the Ministry of Agriculture has recently entered into a Memorandum of Understanding with a foreign investor, Messrs Prairie Texas Inc, to develop the Aveyime Rice Project located in the North and South Tongu districts of the Volta Region.

The MOU entered by the Government of Ghana (GoG) and Prairie for the running of the Aveyime Rice Project involves a Joint Venture (JV) arrangement between the GoG and Prairie, with the following shareholdings: GoG - 30% Prairie - 70%.

Again, the JV is to be capitalized with $3,571,429 equity to be contributed by GoG and Prairie in proportion to their respective shareholdings as follows: GoG - $1,071,429 Prairie - $2,500,000.

According to documents sighted by this paper, GoG’s contribution will be the value of the assets (excluding the land) of the Quality Grains Company amounting to $8,145,336.

However, the compensation for the land will be separately negotiated by GoG and paid for by the JV.

Meanwhile, the difference between GoG’s total contribution of $8,145,336 and its capital contribution of $1,071,429, amounting to $7,073,908 will be loaned to the JV under a loan agreement between the parties.

And Praire’s contribution will be $2,500,000 cash injection to be paid or a commitment made by 30 days after the signing of the MoU, which was done on 16th May 2007.

The plaintiffs are Dr G A Kisseih, a representative of the Kisseih family, Mr Charles V K Ahiadzre from the Ahiadjie family and Mr Ernest Konu, representing the Konu family. Others are Mr Emmanuel Aho from the Aho family and Mr Ben K Dzre, representing the Dzre family.

In the statement of claim, the families allege that they own a total of about 4,276.33 acres of land, which the State compulsory acquired in 1977 and that prior to the compulsory acquisition, their families were in possession and controlled their respective lands using it for farming, building and other social activities.

They are contending that the lands were acquired for the purpose of establishing a State-owned agricultural company and questioned why the project was abandoned and why the State intends to sell the land to some other persons.

What bothers the five families is the fact that despite their shrill and loud cries, no compensation was paid for the land when it was given to the private developer under the Quality Grain Company umbrella.

The land owners said that the defendants (the State) have shown by their conduct that they would not obey the law or do what is required of them by law and instead would continue to trample on the rights of the plaintiffs and their families with impunity.

They are therefore praying for the protection of the Court and to prevent the defendants from abusing their rights.

They also pray the court to declare that they (plaintiffs) are entitled to compensation for their land, and to declare that the non-payment and continuous non-payment of compensation for their land is in breach of their fundamental human rights as enshrined in the 1992 Constitution.

They further prayed the court to order the 1st Defendant (Attorney General) to permit the plaintiffs to exercise their rights under article 20 (60) of the 1992 Constitution and for damages for abuse, infringement and contravention of their rights to be awarded them.

Early this year, the Minister of Food and Agriculture, Mr Ernest Debrah, informed Parliament that Cabinet had referred proposals and recommendations of two firms that evaluated the Aveyime Rice Project to its sub-committee for study and advice.

The two firms, Messrs Integrated Rice Company Limited and Messrs Prairie Texas Inc., were among six companies that submitted proposals for the reactivation of the project on October 26, 2006.

Meanwhile, prior to the announcement of government on its selection of Messrs Prairie Texas Inc, a group calling itself the Concerned Citizens Association of the former Quality Grain Project made up of residents in the project area, had called on the government to select the Integrated Rice Company Limited, a local company to take over the management of the Aveyime Rice Project at Bator in the Volta Region.

According to the group, they had decided to support the bid of Integrated Rice Company because of past misfortunes the community has had to go through as a result of past governments decisions in entrusting the rice company in the hands of foreign firms.

Meanwhile, after the signing of the MoU, this paper has gathered that Messrs Prairie has returned to the negotiating table with the following issues, which they claim are conditions for investment by their prospective investors:

They have accepted the valuation of the assets of the Quality Grain amounting to $8,145,336 to be contributed by GoG.

They have also accepted the GoG loan of $7,073,908 with the following conditions:

That the loan will attract an annual interest of 8%

That the loan will be repaid over a 12 year period with a 2-year moratorium

That the annual debt servicing amount should not be more than 15% of the project’s previous year’s net profit, and that at the end of the 12-year period, if the loan is not fully paid, the balance will not be paid.

Again, Messrs Prairie has placed a cap of $300,000 as compensation to be paid for the land with the payment terms for the land being in three equal instalments as follows:

First $100,000 when funding is in place; Second $100,000 on the 18th month after the first payment; and Third $100,000 on the 36th month after the second payment.