Benchmark value: agric sector stakeholders want it indefinitely suspended
Adnan Adams Mohammed
Key stakeholders in the agricultural sector value chain want government to suspend indefinitely the benchmark value policy.
The members of Rice Millers Association of Ghana (RMAG), Peasant Farmers Association of Ghana (PFAG) and General Agricultural Workers Union (GAWU), last week, expressed their disappointment in the Government’s decision to halt indefinitely the implementation of the reversal policy.
This decision according to the groups has serious consequences on the survival of the local rice industry and are, thus, appealing to the government to reconsider the “indefinite suspension” decision and implement the policy as soon as possible. In a statement, PFAG and GAWU noted that the benefits that come with the implementation of the reversal of the benchmark value discount 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 and the industrial transformation agenda as part of the One district One Factory and Planting for Food and Jobs programs.
“Why would Government make significant investments in rice mills some of which have been commissioned by the President of Ghana in 2021 and then make such a decision that stifles the growth of the rice industry? Reversal of this policy will increase the competitiveness of the Ghana rice industry, create jobs and position the Ghanaian farmers and millers to be able to participate in the Africa Continental Free Trade Area (AfCFTA) as exporters of rice,” the statement said.
It added that “The recent video flooding various social media platforms on success stories of Nigeria’s rice industry is partly due to Nigerian government’s policies that incentivized local rice farmers and commitment on the part of the government to protect the interest of the Nigerian farmer and make Nigeria self-sufficient in rice”.
On 13th January 2022, the Ghana Revenue Authority issued a communique citing a directive from the Office of the President for the indefinite suspension of implementation of the reversal of the benchmark value discount policy.
The directive according to the groups 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 presentation in Parliament.
The Peasant Farmers Association of Ghana and Rice Millers Association of Ghana are, thus, calling on Government of Ghana to emulate the Nigerian example and implement this policy immediately.
They said the benchmark value discount policy reversal is one good policy of government that has the tendency to raise revenue to help address the various challenges facing farmers and improve the quality of rice produced and at the same time, protect the local farmers and millers against dumping from highly subsidized rice from the imported nations.
They described the suspension of reversal of the benchmark discount policy as retrogressive and the fastest way of collapsing the local rice industry.
“The impact on rice millers in 2019 after the announcement in April 2019 was devastating because by June of 2019, prices of imported rice in Ghana went down by some 20% forcing local rice millers to take a 15% to 20% price hit and eroding all our margins that year. There was no respite for farmers and millers in the face of such economic impact even after we approached government to present our concerns about the imminent threat to our farms and rice mils,” the statement said.
It explained further that “Currently, the cost of imported white rice landed in Ghana after all taxes and charges is 25% cheaper than milled white rice produced in Ghana. The relatively low landing cost of imported rice in Ghana is partly due to the 50% discount enjoyed by rice importers and partly due to dumping strategies from the exporting countries. We have the strongest belief that implementation of the reversal of the benchmark value discount policy on rice and investing the accrued revenue in subsiding farming and milling activities will reduce production cost and position the Ghanaian farmer and miller to produce and sell at lower cost than imported rice over time.”
The farmers indicated that an estimated number of 100,000 persons who are directly engaged in rice value chain activities stand the risk of losing their livelihoods if the benchmark discount policy reversal is not implemented as planned.
“Let us also remember that Government through the Honorable 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 benchmark value policy reversal is not implemented immediately”? the farmers quizzed.
“Such grand targets remain a mirage in the current paradigm where rice imports enjoy a 50% discount on import duties values as granted by this benchmark policy while local rice production faces high input costs and little or no support from government for millers. The one million metric tonnes of milled rice that must be produced locally to make Ghana self-sufficient in rice production is set to create over 500,000 jobs in the economy and save over about USD 500Million of foreign exchange annually.”