Rice imports killing Ghanaian growers – FAO

The UN Food and Agriculture Organisation (FAO) says Ghana’s over-reliance on foreign imported rice is becoming a source of worry. “By limiting the importation of rice, the country will save money and invest in market development to increase productivity and expand growth.

This is how most countries develop,” said FAO Representative in Ghana, Musa Saihou Mbenga, in an interview with Business and Financial Times.

According to the FAO representative, “Ghana has the potential to meet local demand. There is need to adopt pragmatic policies designed to move local production up.”

He added: “Government should encourage consumption of locally-produced rice by promoting the consumption of locally produced foods.”

Ghana currently spends US$450million annually on rice importation to satisfy local demand. The country’s self-sufficiency in rice production stands at about 30 percent, leaving a shortfall of 70 percent.

It is estimated that the Aveyime rice project, when it reaches full-capacity production of about 800,000 tonnes, will save Ghana over US$600 million at the current cost of rice importation, possibly yielding a surplus for the country.

Everett Anderson, Managing Director of Prairie Volta Limited, manager of the project, was recently reported as saying that the Aveyime project could put Ghana in a position to meet the entire rice needs of the West African sub-region.

But in the meantime, the preference for rice imports — which denies home-producers adequate markets — has hurt local production and made it more difficult for local producers to compete with the high-quality marketing and production standards of foreign rice.

High rice imports threaten the livelihoods of local rice farmers since most farmers are the main breadwinners of their households.

The level of education among rice producers in Ghana is on the low side. This is attributed to low levels of income and savings, which have resulted from rather low returns from rice production.

On the global food crisis, Mbenga said Ghana is less affected by the crisis because of consumption of locally produced foods like cassava, maize and others.

According to the FAO Global Cereal Price Index (FFPI), June 2011 recorded an average 259 points, down 1 percent from May but 71 percent higher than of June 2010.

Improved weather conditions in Europe and the announced lifting of the export ban by the Russian Federation (from July) depressed wheat prices.

However, maize markets were supported by tight old crop (2010) supplies and continued wet conditions in the United States. Prices of rice were mostly up in June, reflecting strong import demand and uncertainty over export prices in Thailand, the world’s largest rice exporter.

The Oils/Fats Index for June registered an average 257 points, down marginally from May. Continued production uncertainties and expectation of stronger world import demand sustained soybean oil prices.

By contrast, palm oil prices eased further, reflecting improved supply prospects and ample export availabilities in Southeast Asia.

The FAO Dairy Price Index for June hit 232 points, virtually unchanged from 231 points in May. This was the result of diverging price movements, with prices of skimmed milk powder and casein up by 5 percent, whole-milk powder down by 3 percent, while prices of butter and cheese remained stable.

The Meat Price Index for June recorded an average 180 points, marginally up from May. Poultry meat prices experienced a 3 percent rise, making a new record, while pork prices declined somewhat. Prices of bovine meat were subject to modest increases from already high levels.

The Sugar Price Index for June registered an average 359 points, up 14 percent from May and only 15 percent below its January record.

The price strength reflects dynamic short-term demand against tight exportable availabilities, notably in Brazil, the world’s largest sugar producer where production is forecast to fall below last year’s level.

The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities.

It consists of the average of five commodity group price indices (representing 55 quotations), weighted with the average export shares of each of the groups for 2002-2004. In February, FAO revised the composition of the Meat Price Index. This resulted in adjustments to the historical values of the FFPI.
Source: B&FT