Rice millers in Ghana have been lamenting that local rice production will suffer if the benchmark value is not reversed. They are not the only group crying but their colleagues in the manufacturing sector are also going to suffer the same consequences.
The General Manager of HGL Limited which is a major rice production company in the Volta Region, Mr. Cyril Klutse, has made it known that the local-rice production sector is being set on the path to collapse with the current benchmark value.
He added the sector producing rice is one of the fastest-growing agro-industries in Ghana and has been affected by unbridled imports over the years, and therefore the attempt to reverse the benchmark values, was greatly welcomed but it seems that is not going to happen any time soon.
The government’s recent plan of 50 percent benchmark value reversal on selected products had been on the behest of the Association of Ghana Industries (AGI), which has been seeking a transformation of the local industrial landscape.
AGI vs GUTA on benchmark value
The move, which was hailed by the AGI, was met with disapproval from the Ghana Union of Traders Association (GUTA), whose agitation had caused the government of Ghana to reconsider the move – the president ordered for a suspension of its implementation.
Mr. Klutse appealed to the government to consider the plight of the local production sector, and stick to the planned benchmark reversal.
He said although the cost of production had shot up, producers were unable to price accordingly due to high imports cushioned by the benchmark values.
He explained that with the reversal, rice importers would be forced towards realistic prices, which would also help ensure sustainable pricing for local producers.
The HGL Limited boss, however, added that it would be important to support the local production sector to meet the essence of the reversal of the benchmark values.
He admonished the government to therefore focus on building the capacity of local producers to compete, to create challenges for consumers following the reversal.
“We welcome the reversal and we support it. It’s welcoming news for the development of local-rice production. While the government tries to reverse it, it needs to support local industries to expand.
“The cost of production has gone up but we are afraid to raise our prices. With the reversal, importers would be forced to pay the true price, and imported rice can be priced realistically,” he said.
The GM of HGL Limited said “deliberate effort” would be required in building capacity, stressing that rice production is a capital-intensive venture and that major rice mills that had sprung up in the country had been thrown into redundancy for lack of raw materials.
“If imported rice doesn’t come, although the local producers have the capacity, capital remains a major bottleneck. It should be a two-way approach, and banks should be encouraged to lend to local producers,” he emphasized.