Benchmark policy puts 100,000 jobs at risk in rice industry – farmers warn

Rice farmers obtain US$8m credit access to buy fertiliser

The Peasant Farmers Association of Ghana (PFAG), the General Agricultural Workers Union (GAWU) and the Rice Millers Association of Ghana (RMAG) have expressed disappointment in government’s decision to suspend implementing reversal of the benchmark value discount policy.

They cautioned that an estimated 100,000 persons who are directly engaged in the rice value chain activities stand a risk of losing their livelihoods if the benchmark discount policy reversal is not implemented as planned.

The groups warned that the decision could have serious consequences on survival of the local rice industry, leading to its collapse.

“The directive came as a huge surprise to rice farmers and millers, because of the numerous engagements and consultations with all stakeholders for over two years after which the prudent decision to review the policy was reached and announced by the Minister of Finance in the 2022 budget,” the groups said in a joint statement.

Government announced 50 percent benchmark value on some 43 items that are imported into the country, but suspended the policy on January 4, 2022 after agitation from the Ghana Union of Traders Association (GUTA).

They argued that the benefits which come with implementation of the benchmark value discount reversal is not only limited to increased revenue for government, but also fulfillment of government’s own agenda of making Ghana self-sufficient in rice production by 2024.

“Why would government make significant investments in rice mills, some of which were commissioned by the president in 2021, and then make such a decision that stifles growth of the rice industry,” they lamented.

According to them, reversal of the policy was aimed at increasing competitiveness of the Ghana rice industry to help create jobs and position Ghanaian farmers and millers to participate in the Africa Continental Free Trade Area (AfCFTA) as exporters of rice.

Citing Nigeria as an example, the group said the success stories of its rice industry can be partly hinged on the Nigeria government’s policies that incentivised local rice farmers to protect the industry.

“We, Peasant Farmers Association of Ghana and Rice Millers Association of Ghana, call on government to emulate the Nigerian example and implement this policy immediately.”

The groups stressed that the benchmark value discount policy reversal is a good policy that has a tendency to raise revenue and help address various challenges facing farmers in the country.

They added that the policy will help improve the quality of rice produced in the country, and also protect local farmers and millers against dumping from highly subsidised rice-producing countries in Asia.

Describing suspension of the benchmark discount policy reversal as retrogressive, the groups warned that Ghana’s rice industry will soon collapse if the decision is not rescinded.

They recalled that impacts of the policy on rice millers in 2019 after the announcement in April 2019 were devastating.

“By June 2019 prices of imported rice in Ghana went down by some 20 percent – forcing local rice millers to take a 15 percent to 20 percent price-hit and eroding all our margins that year.”

The groups stated that the relatively low landing cost of imported rice in Ghana is partly due to the 50 percent discount enjoyed by rice importers, a situation that has led to dumping.

“Let us also remember that government through the Minister of Agriculture has set a reviewed target to make Ghana self-sufficient in rice production by 2024, from an original target of 2022. How do we stop the importation of rice into Ghana if the benchmark value policy reversal is not implemented immediately?”

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