WTO Talks killing Ghanaian Rice???
It was refreshing however, to hear read from the Government representative at the WTO dismiss the assertion that tariffs are the problem. But he was unfortunately evasive on the real reasons why farmers can't add value to increase their market share.
The real determinants here are high import taxes on agricultural machinery. I have always argued that import taxes are indeterminate until the day you get your imported goods into your home. A best estimate on imported used saloon car is almost 100%. Port authorities demand 50% of the original value of the car,
12.5% VAT, Regional levy of 0.5%, 1% CIF value, haulage tax which varies, and bribes to facilitate speedy paper work. Imagine how much will be slammed on heavy agricultural equipment when we know in Ghana that we do not have enough rice mills, even the technologically archaic!
In a related article, http://www.panos.org.uk/global/tradingplaces_feature1.asp a farmer said, “All we want is for the [Ghanaian] government to assist us to acquire simple processing machines, so that on a small scale we can start to process our produce, which will help us to cut back on losses during the periods of glut".
The second reason obviously is very access to credit. It is very difficult to access loans when you are a subsistence farmer in Ghana because your collateral isn't big enough. And even when the collateral exists for large scale farmers, the cost of borrowing is steep high- almost 28% across board. The high cost of production translates into higher prices for ordinary Ghanaians.
Indeed, some savvy Ghanaian businessmen have helped both local farmers and consumers, for instance by providing locally produced rice in packages. But that ensures the rice isn't stale when it reaches the consumer. Similarly, other Ghanaian entrepreneurs now collaborate with their Italian counterparts to produce tomato paste brands with Akan names, Ghana's widely spoken language.
Yes, attitudes are part of the problem. - I agree that locally produced rice is more nutritious but that is not an excuse to ban or increase tariffs against imported rice.
If we did ban rice and tomato imports, just how would we feed ourselves? Ghanaians depend on rice as a major staple in our diets, yet local production caters for only 30pc of the rice we consume. Where is the remaining 70pc supposed to come from?