Government of Ghana to review poultry and rice sector trade policies
16 May 2014
According to a Ghanaian press report, the Ghanaian government may be “contemplating placing a ban on the importation of rice and poultry”. On 25 February 2014, the Trade and Industry Minister, Haruna Iddrisu, said that the government would soon introduce legislation “that would protect local industry and at [the] same time make Ghana a net exporter of food”. He announced that the government was ready to “ban the importation of rice and poultry” once the institutional infrastructure for the management of international trade was in place via the planned International Trade Commission (see Agritrade article ‘ Ghana to establish an International Trade Commission’, 24 April 2014).
The report noted that, according to government figures, Ghana spends “between US$500 million and US$600 million annually” on imports of poultry meat and rice. The minister argued that this should spur Ghanaians “to rise to the challenge of economic transformation, because we have the capacity to produce rice and develop our poultry industry as a value chain”.
The report warned, however, that “any premature ban before local capacity has been created would be disastrous, [since] it would encourage smuggling and at the same time escalate prices.”
Ghanaian poultry and rice imports 2011–2013 (US$ millions)
| 2011 | 2012 | 2013 | |
| Poultry | 184.0 | 196.0 | 169.2 |
| Rice | 384.0 | 359.0 | 374.0 |
Source: The Chronicle, 10 March 2014 (see below)
A recent article published by Deutsche Welle highlighted the health risks associated with imports of frozen poultry meat into Ghana along supply chains that fail to maintain the integrity of the frozen product. It reported that currently, “Ghana imports about 165,000 tonnes of cheap meat from Brazil, USA and Europe every year,” and that, according to the Executive Secretary of the National Poultry Association, Quame Kokroh, these cheap imports have resulted in a market downturn. EU exporters from Holland and Germany play a leading role in the trade in frozen poultry parts (cuts left over after the favoured breast portions have been stripped off to meet rising EU demand). According to Deutsche Welle, “from 2011 to 2012, German exports of poultry to Africa increased by a staggering 120 percent.”
The EC’s winter 2014 review of the short-term outlook for EU crop and livestock products highlighted the continuing dynamism of the EU poultry sector. EU production, consumption and exports of poultry meat have been increasing since 2007. There was a small decline in exports in 2013 (–1%) as a result of the ending of export refunds, of policy measures adopted in Russia and of increased competition on certain markets, but this masks a continuing rise in EU exports of poultry parts to African markets, most notably to South Africa in the final quarter of 2013.
Editorial comment
Experience in West Africa highlights the dangers of stimulating an expansion of informal cross-border trade through the use of trade restrictive measures (see Agritrade article ‘Benin profits from Nigeria’s agricultural trade policy’, forthcoming 2014). When trade restrictions are introduced in support of national sector development strategies, the market effects of resultant smuggling can be so great that they undermine the very policies that the trade restrictions were intended to promote. They can also carry important fiscal consequences (see Agritrade article ‘Uncertain movement on Nigeria’s rice trade policy’, 17 May 2014).
Across West Africa, there is a varied experience of the use of trade policy tools in national sector development strategies, particularly in the rice sector. In some West African countries, a significant expansion of rice production is being stimulated without recourse to the trade-restrictive measures favoured in Nigeria (see Agritrade article ‘Rice sector developments in selected West African countries’, forthcoming 2014).
This varied regional experience in the rice sector could usefully be reviewed before the government of Ghana determines the trade policy to be pursued in support of national rice sector development.
In the poultry sector, growth in informal cross-border trade can greatly exacerbate the food safety threats posed by existing shortcomings in the functioning of cold storage chains. Given the nature of the trade in frozen poultry parts, a more nuanced trade policy may be required that seeks to link access to import licences to certified access to cold store facilities (on food safety grounds) and investment in the development of backward linkages. This would reduce the incentive for smuggling and enhance the safety of imported poultry meat, while allowing rising consumer demand for cheap protein to be met.
