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27.11.2019 Business & Finance

Prices of local rice can reduce if… Rice Processors

By Myjoyonline
Prices of local rice can reduce if… Rice Processors

The Manager of Global Agri-Development Company GADCO - a rice processing factory, believes local rice is quite expensive on the market due to high overhead cost including high electricity tariff and taxes.

There is a growing campaign for the purchase and consumption of locally-produced rice in Ghana, especially as the festive season draws closer.

However, the cost of locally-produced rice relative to imported brands has been singled out by Ghanaians as a major disincentive for its consumption.

But speaking to JoyBusiness, Joel Tsatsu indicated that rice millers will soon engage the government to beat down the cost of electricity and taxes.

Mr Tsatsu said the price of local rice is determined by a committee including, the scheme management, the farmers, the input providers and the mechanization service providers.

“They meet at the end of the season or during the season and look at the expenses incurred in the rice production then they look at how much margin to add on to finally conclude on the farm gate price.”

He added that “as producers/millers, we are also into business to make a profit, so we add some margin. This also informs where to buy the paddy rice because the price varies from location to location.”

Mr Tsatsu explained that government’s aggressive push for the halt on imports in the next five years is feasible if “the right policy instrument is put in place, the right regulations, the laws, the contracts and all the paper works are done well”.

He also indicated that the rice processors and the millers must be empowered and not only focus on the farmers. “We are ready to help the government achieve this kind of ambition and so they (government) also have to be supportive.”

The Deputy Minister of Food and Agriculture, Kennedy Osei Nyarko in a visit to the area, met with some local rice farmers at Avalavi-Weta in the Ketu North district to encourage them not to relent on their effort to expand their farms and adopt best practices to enhance production.

Mr Osei Nyarko said the agenda of the government is to encourage the consumption of local rice as they work to cut import in the next five years.

“Now the good news is that we are gradually increasing production. In 2018 we were able to record total production of paddy rice of 769,400 metric tons. This year, we’re inching to about 900,000 metric tons and we have given ourselves by 2022 to be able to meet the annual consumptions of 1.135 million metric tons. We can’t get up to say we are banning rice import when we don’t have the production capacity.”

He indicated that the onus lies on the citizens to consume locally-produced rice and that is the only way to curb importation.

A private rice processing firm, Wienco in partnership with the government has resolved to buy all rice from the system to avoid any future glut.

Officers of Wienco were in the Volta Region to start buying all excesses in stock and will head towards the Northern region to relief farmers from the glut.

Some farmers of the Weta Irrigation Scheme under the Irrigation Development Authority, they say their farms need urgent drainage systems to channel the water appropriately help to scale up production.