In Accra's bustling market the effect of imported rice is easy to see. Bags of imported rice reach to the ceiling of narrow shops. Huge billboard adverts for imported rice such as Chicago Star Rice and others stare down on hawkers and pedestrians.

Unfortunately Ghanaian rice hardly sells since the quality of the imported rice is considered so much better although it costs more. Furthermore, Ghanaian rice is only available for six months of the year. The poor quality of Ghanaian rice is no secret. The lack of government subsidy means that farmers cannot afford to invest in machinery such as combine-harvesters. Hence most milling is done by hand. Sometimes the farmers lay the rice out on the road and let cars run over the crop to separate the husk from the grain. Or they beat the crop in the fields with heavy sticks. Either way, the crop often ends up broken and with stones in it. Late last year, the media scene in Ghana witnessed a tug-of-war among rice importers in Ghana, with the Customs Division of the Ghana Revenue Authority caught in the crossfire. The matter assumed national security proportions when at one point the Rice Headloads Association, with Mr. Solomon Kwadwo Kusi as its Coordinator, staged a public outcry and blocked roads at the Western frontier town of Elubo in response to the Customs Division having imposed new valuation rates on rice imported over land frontiers. On the other hand, the Food and Beverages Association had accused the Customs Service of favouring these small-scale rice importers and not applying values which ensured trade parity. The association went on to accuse the small-scale importers of indulging in smuggling activities with official connivance, allowing the small-scalers to sell at lower prices and in effect deprive the state of national tax revenue.

On its part, the Customs Division noted that it was applying World Trade Organisation’s rules on valuation and thus not favouring any single group. In responding to the charges of value misapplication by the Rice Headloads Association, the Authority noted that rice was facing stiff demand competition from other staples particularly during periods of good harvest and food glut.

Regarding the incidence of smuggling as labeled by the Food and Beverages Association, the Customs Division acknowledged that with the nature of Ghana’s borders characterised by waterways, forests and mountainous ranges, as well as numerous farms and pathways certain levels of smuggling activities may occur. This situation was however, being curbed with vigilant Customs frontier patrols, inland road check points, as well as mobile task forces deployed to track down smugglers.

In the wake of the report, the Deputy Minister of Finance, Fiifi Kwetey disclosed that government had instructed Customs to investigate the smuggling scandal in the Western borders of Ghana for further action. Emerging from the rumpus was the indisputable fact that Ghana continues to be a net food importer, with estimates that Ghanaian agriculture may be operating at just 20% of its potential in staple foods production to feed 24 million people. Ghana's Ministry of Food and Agriculture has noted that the local food harvest in 2008 totaled 9,095,820 metric tonnes.

A huge potential exists for the development of agricultural exports, including pineapples, tomatoes, soybeans, and cut flowers. In real terms, maize and locally produced tubers amount to 2,219.057 tonnes, representing 24% of overall production. Other staples include cassava, accounting for 21% of production, plantain and cocoyam, with 14 and 8%, respectively; and rice, which placed in 8th position, with just 4%. Taking the statistics on their face value it stands to reason that Ghana relies on substantial imports of food crops, particularly rice to balance the food deficit. Figures from the Customs Division of the Ghana Revenue Authority indicate that between January 2005 and October 2010, Ghana’s rice imports were as varied in types as were the sources from abroad, spanning continents worldwide.

The honour roll puts Thailand, Vietnam, United States and Côte d’Ivoire leading the pack, with volumes ranging from 68,485,826 up to 912,176,312 metric tonnes. The cost, insurance and freight (CIF) of the merchandise fell between GH¢26,615,312.41 and GH¢516,482,292.26, while import duties and other charges paid amounted to between GH¢7,130,712.94 and GH¢135,808,590.83.

Overall, the volumes of rice imported for immediate consumption (that is, what is cleared at the ports and frontier stations upon payment of duties – as against what is imported, bonded and warehoused for clearance at a later time)– amounted to GH¢2,435,506,359 metric tonnes in weight, at a total CIF value of GH¢1,216,206,460.67, while GH¢ 328,032,600.89 was paid as government taxes.

Commissioner in-charge of Customs Division
of the GRA, Major-General Carl Modey

The struggle for hegemony between local and foreign brands continues over who controls the rice importation turf. Mr. John Awuni, spokesperson of the Food and Beverages Association, in a press statement last year, emphasised that one of the incentives for the smuggling of rice is the huge disparity between the import duties of Ghana (37%) and the Ivory Coast (12.5%), leaving smugglers with a potential 24.5% to “play” within the market. This, he said, not only distorts the market but it is harming both local rice producers and legitimate importers of rice.

Additionally, Mr. Nabil Moukarzel, Executive Chairman of FINATRADE, a prominent rice importer, has attributed the reduction of rice importation to increased smuggling of the commodity into the country.

He also blamed the smuggling situation on the numerous taxes and hurdles at the entry-points of the country which he said had encouraged most people to smuggle the product from neighbouring Ivory Coast, Benin and Burkina Faso where tax processes were more relaxed.

Source: Basic Agricultural Statistics

The main countries of origin include:

Source: Ghana Revenue Authority - 2010

He has suggested that the government should consider reducing fees and levies at the ports to discourage smuggling.

According to Mr. Moukarzel, local initiatives to encourage the consumption of locally produced rice would be a fluke if adequate measures were not taken to protect the local rice varieties, which could not compete favourably with smuggled perfumed rice.

Mr. Nabil Moukarzel Executive Chairman FINATRADE


The plight of local production

Engineers Without Borders, Canada (EWB) and the Ministry of Food and Agriculture of Ghana (MoFA) in the Northern Region initiated in 2008 the “Ghana Rice” campaign, an intensive marketing campaign to promote Ghanaian rice to consumers in Northern Ghana. The campaign was a pilot initiative to complement the Government’s initiatives aimed at increasing rice production and improving the quality of Ghanaian rice so as to make it more profitable for farmers in Northern Ghana. In four short weeks, the marketing strategies reached an average of 57% of the people of the Northern Region of Ghana. Of these people, 26% reported buying quality Ghanaian rice because of the campaign.

The initial success implies that with enough resources to run the campaign over a longer period of time consumers could be convinced to shift their preferences away from imported rice towards quality Ghanaian rice. This shift in consumer preference would result also in an increase in market incentives for the rice producers and processors. The rice producers and processors who have been trained and have the resources would respond by increasing production and quality of production and begin to see rice farming as a profitable business. The results collected indicate a few areas where the campaign should be improved when it is implemented on a national scale and organised at least once every growing season. The results indicate that running the campaign’s radio jingle was almost three times more successful in bringing about consumer behaviour change when weighted by reach and cost as compared with the visuals (stickers, posters and signboards). The return on investment (ROI) for implementing both the radio and the visuals is roughly equal to the ROI for the radio jingle alone.

But if Ghana occasionally promotes its local production, even more so do the foreign marketers. Engineers Without Borders, reports that the USA Rice Federation in 2005 received an award in the Food and Confectionery category for print advertisements at the Advertising Association of Ghana’s Gong-Gong Awards for an integrated media campaign for U.S. rice, featuring advertisements in TV, radio and print media, May-July 2004. The campaign resulted in Ghana importing 131,000 metric tons of rice from January-September 2005, an 87 % increase from the same period in 2004.

“Ghana is a key growth market for U.S. rice where we have un-restricted commercial access,” said an official of USA Rice, Jim Brow. “Ghana is also a good example of the kind of success our talented international promotion team can achieve when decisions on importing and purchasing rice are left to the market place and consumer,” said Brow. The Gong-Gong Awards are advertising industry awards that recognise and reward creativity in the industry and the 2005 theme was ‘creativity, relevance and the bottom line.’

“It is a great accomplishment that our promotional efforts not only had a major impact on Ghana's imports of U.S. rice, but that our advertisement was recognised by an independent professional body as well,” said Eszter Somogyi, USA Rice's international program manager. The advertisement campaign was developed based on research information from traders and consumers in Ghana and had messages that focused on U.S rice's high quality as well as the enjoyment gained from spending a meal together as a family – eating U.S. rice.
The campaign had positive acceptance among the consumers. Meanwhile OXFAM in 2005 had highlighted the plight of rice farmers in Ghana in the latest salvo of the ‘Make Poverty History’ campaign. “The plight of rice farmers in Ghana shows how western policies and unfair agricultural subsidises in the US and the EU are destroying the livelihoods of farmers in developing nations,” said Harriet Binet, a spokeswoman for Oxfam. Indeed OXFAM asserts that Ghana and the developing world virtually pay for the various subsidies that are enjoyed by American farmers.

In the early 1980s, conditions attached to loans given to Ghana by the IMF and the World Bank resulted in the country liberalising its markets and allowing cheap imported rice to flood the market. The IMF and World Bank now admit that such conditions do not help the world’s poor but reversing the damage of such policies is difficult. The World Bank continues to support a policy of lifting subsidies, but in global trade talks it is expected that this will be done by the industrialised as well as developing nations. The World Bank condemns the heavy subsidises given by the EU and US to their farmers, but is powerless to do much about that.

Between them, the US, Japan and the EU subsidised their rice production by $16bn (£8.48bn) in 2002, the latest year for which full data are readily available. The US policy is believed to be particularly harmful for the rice-growers of Ghana. In 2003, the US paid $1.3bn in rice subsidies to its farmers and sold the crop for $1.7bn, effectively footing the bill for 72% of the crop. Most of these subsidies go to big Arkansas rice farms. One company alone, Ricelands of Arkansas, was the recipient of US agricultural subsidies totaling $490m between
1995 and 2003, according to various US sources.

Oxfam has set up a project near Nyarigu that it hopes will help resolve the local problems of milling rice in villages that are yet to be connected to electricity but whose rice production has been tested and is clean, white rice of similar quality to the imported rice. If the Government of Ghana were to provide subsidies as the US and EU do for their farmers, it would help Ghanaian farmers to pay for plots, chemicals and water which would allow them to grow more rice for their families and to sell better on the market. But Mats Karlsson, the World Bank's country director in Ghana, says the government is better off spending its limited resources on improving Ghana's infrastructure.

“If we could reduce the cost of transport, we would increase the earnings of farmers by much more than any internal policy could achieve,” he said.

“Let us be clear. The biggest problem facing farmers in the developing world are the subsidies the West provides to its own farmers. These are deeply unfair,” he added. Oxfam agrees. “If the West is truly serious about making poverty history, then agricultural subsidises must be abolished,” said Ms. Binet.