Food prices and hardship enters political agenda in Ghana

Flag bearer of the New Patriotic Party (NPP), Nana Addo Dankwa Akufo-Addo, recently observed that two years into the ŒBetter Ghana¹ agenda of the Mills administration, more Ghanaians cannot cope with the harsh economic realities by referring to a recent survey undertaken by world renowned pollsters, Gallup.

Food Security Ghana (FSG) was the first to report on the Gallup survey in April this year when it published an article titled ³53% of Ghanaians Struggling to Afford Food².

Referring to the of the survey Nana Akufo-Addo said the results showed that under President Mills, 12.7 million people, representing 53 per cent of the entire population, could not afford the cost of food.

He continued to say, ³those who admitted to living comfortably have dropped from 20 per cent in 2007 to four per cent of the population in 2010².

Addressing the third international conference of the NPP in Hamburg, Germany, Nana Akufo-Addo said, ³To put it bluntly, over 8.2 million Ghanaians are saying that they have been delivered a bitter Ghana, instead of a better Ghana.²

From this it is clear that the hardship of Ghanaians caused by aspects such as high food prices will become a central theme in the political agenda leading up to the 2012 general elections in Ghana.

Counter arguments by the Mills administration may be that the rise in prices is due to external aspects such as the global food crisis and the rising price of crude oil.

However, it is clear that the opposition to the NDC led government will question many aspects related to the government¹s food security policy as well as questionable statements made by the government about food security and the management of agriculture in Ghana. Some of these aspects are likely to include the following.

Import Duties On Food

FSG has reported on this issue many times. The fact is that certain foodstuff including rice attracts import tariffs of 37% compared to 12.5% in the Ivory coast.

This huge differential has led to huge smuggling of rice from the Ivory Coast to Ghana, causing huge losses in revenue to the state and a distortion of market conditions in Ghana. These distortions not only affected local rice producers, but also legal importers of rice.

In addition it has increased the cost of rice for 70% of rice consumers in Ghana as local production only caters for 30% of local demand.

It will be remembered that the previous government scrapped the 20% duties in 2008 to help consumers amidst the 2007 - 2008 food crisis. In December 2009 the current government re-introduced these duties claiming that the food crisis was over. However, one month prior to that the World Bank warned that a new food crisis was looming.

Another reason given was that it is necessary to protect the local industry. Many analysts have agreed that such a policy may be justified when a country produces 100% of local demand, but not when the local industry is plagued with many problems and unable to supply enough to meet the demands of consumers.

Claims of Self-sufficiency

The Ministry of Food and Agriculture (MOFA) has made claims that Ghana will be self-sufficient in the production of rice within two to three years, and therefore justified the high import duties.

An analysis of the rice industry, however, shows that it it is plagued with many problems including low quality, failed irrigation systems, lack of support in terms of input costs (fertilisers and mechanical support), road infrastructure,markets and many more. All agree that it will probably take closer to ten years to reach self-sufficiency if massive investments are made by the government.

To illustrate the problem of quality the following was explained by Josh Weinstein of Develp Economics, ³ Rice quality is rated on a scale of 1 to 5, with 1 being the highest quality. Rice from Southeast Asia receives a 2.4 on average. In contrast, Ghanaian rice receives a 4.7.²

If rice production increases in Ghana without an improvement in the quality the industry will soon find itself in a major crisis with stockpiles of rice that can not be exported and that will be rejected by local consumers.

In 2010 the Food and Drugs Board (FDB) destroyed locally produced rice that was, according to them, not fit for animal consumption, let alone human consumption. These and other obstacles need to be removed before Ghana can become self-sufficient.

It is also clear that smallholder farming of rice alone will never be able to achieve self-sufficiency and that commercial scale farming will need to be introduced. To date FSG is unaware of any such operations or any plans to introduce large scale rice farming.

The claims by the government of self-sufficiency within from 2009 is therefore obvious misinformation and a smoke-screen to justify policy decisions such as high import duties on a staple food such as rice.

Job Creation

In 2010 MOFA claimed that it had created 47,000 jobs for the youth in agriculture via its so-called Block Farming initiative. This figure was subsequently changed to 80,000.

In 2010 independent journalists visited the Block Farms and discovered that the farmers working there were in fact existing farmers, and not new youth entrants into the market.

As recent as this month Mr. Kwesi Ahwoi, Minister of Food and Agriculture, and Mrs. Betty Mould-Iddrisu ³challenged youth to take up agriculture², indicating the huge problem that Ghana and other developing countries are facing. The youth of today are not interested to toil long hours like their parents for a very low return on their efforts and are looking at opportunities elsewhere.

The claims of MOFA therefore seems to be exaggerated and this issue is likely to become a major point of debate during the fight for power in 2012.

Land Grabs

FSG has reported on this issue many times. Calculations made based on independent reports by Friends of Earth (FOE) indicated that as much as 37% of Ghana¹s land under cultivation has been ³grabbed² by foreign internationals, mostly with the aim to produce biofuels from Jatropha seeds.

Although the land grabs started during the reign of the previous government, the fact that an independent enquiry into this matter has not been set up by the current government will be questioned in the days to come.

Jatropha has been and is still claimed to be the ³wonder² tree that can grow ³without² water and that is not edible. This means that the grabbed land will not be used to produce food as feedstock for biofuel.

To date FSG has not discovered any commercially feasible biofuel production facility using Jatropha as feedstock.

Besides for the fact that no environmental impact study has been done on the impact of these developments, many NGOs have reported abuses whereby existing forests are being depleted to plant a questionable feedstock for biofuel. In addition the developments have led to many smallholder farmers losing their land and therefore their income and food.

In 2010 Mr. Kwesi Ahwoi made a presentation in the UK to attract investments in agriculture in Ghana. As part of his presentation he proudly mentioned the ³investments² (land grabs) that have taken place and by implication invited more foreign companies to follow suite.

The inaction by the current government on this issue is also due to raise its head in the coming election battle.

Statistics and Management of Agriculture

In business it is true that you can¹t manage what you can¹t measure. The same applies to the management of a country.

The statistics that is being used by MOFA to make policy decisions has been questioned many times, and yet no plans to improve the basis of collecting information has been announced.

In 2010 government not only confused the public, but they indeed confused themselves by quoting various contradicting figures on the levels of local rice production and growth rates in the production.

The first statement came from the Vice President, Mr. John Mahama, who said that Ghana only produces 10% of local demand. At a later state MOFA changed the figure to 30%, and very shortly after that to 40% in a program on Metro TV.

The issue is that correct information is essential to make policy decisions, and while this confusion reigns no one will really know whether we are on the road to development or on the road to disaster.

Conclusion

Ghana and Africa faces major challenges with regards to food security, and the people of Ghana acknowledge the many challenges faced by the government. If it will in fact take ten years to become self-sufficient in something like rice production, everybody will accept that and will laud the government if they have a pragmatic plan to achieve that.

What is not acceptable to anybody is when there is no real transparency and when questionable statements about things such as food security and job creation are made. What is also not acceptable is when there is silence and inaction about serious issues such as the land grabs.

The world has seen how revolutions have erupted in North Africa and the Middle East because of inter alia high food prices and inaction by governments to tackle this by means of sound long-term policies but also by means of short-term crisis measures such as the reduction of high import duties on staple foods.

Ghana is unlikely to see revolutions such as those in Tunisia, Egypt, Lybia and other Arab states, but it is likely to see a revolt at the ballot box if governments are either deceitful or uncaring.

The NPP learnt this dear lesson in 2008.

Food Security Ghana, 20 June 2011 http://foodsecurityghana.com info@foodsecurityghana.com