Imported chicken decimates Ghanaian poultry farms
Published on Thu, 2011-08-18 07:49
The Government of Ghana announced that it's studying tariff and non-tariff measures to restrict the importation of poultry products, after local analysts warned that those purchases are harming the national economy. "Imported chicken is being sold at below the cost of local chicken, and farmers in Ghana cannot simply compete, resulting in the collapse of dozens of farms and the loss of hundreds of jobs," said Yaw Graham, expert of the Third World Network-Africa (TWN-A), focal point of Social Watch.
“We’ve started discussions on the measures with stakeholders, and very soon we will implement them. We are capable of serving our people better, provided these hurdles are cleared,” said Deputy Minister of Agriculture in-charge of Livestock, Dr. Tia Alfred Sugri, during a debate for Ghanaian GTV television network.
According to Sufri, the influx of “cheap and almost expired chicken into the country” is impeding progress of the local poultry industry.
Sugri admitted that the poultry industry has been facing some challenges and that government plans to support farmers to grow more soya in large quantities for the poultry sector.
The Deputy Minister called later, this Tuesday, for heavy investment in the livestock and poultry sectors to enhance the competitiveness of local production to address Ghana’s meat deficit, which stands at 50 per cent, as well as to lower costs and add value to Ghanaian animal products.
The importation of poultry products into sub-Saharan Africa began in the early 1990s when a glut in Europe saw cheap surplus beef being dumped on West African markets, explained Graham. Poultry soon followed and the growth in quantity has since been exponential.
For example, in 2010, he said the European Union, USA and Brazil together exported over 200,000 tonnes of frozen chicken to Ghana, valued at $200 million. “Worse still, imported chicken is being sold at below the cost of local chicken and farmers in Ghana cannot simply compete, resulting in the collapse of dozens of farms and the loss of hundreds of jobs,” he added.
Graham's main concerns are the policies that created opportunity to import poultry, since these had greater weight than the stimulus for local production.
On subsidies, Graham said farmers in the developed world got subsidies for keeping land out of production. “Things which are in surplus are bought by their governments. Once bought, a way has to be found to let them go. In the US for example, the amount of subsidy given to cotton farmers was more than the export value of all cotton produced in West Africa,” he warned.
The Managing Director of Sydel Farms, Kenneth Quartey, agreed, and explained that foreign farmers are heavily subsidised by their governments, making it difficult for locals to compete. “Our development partners invest about US$240billion a year through subsidies on agriculture,” Quartey said.
The entrepreneur added that in Ghana a mere 20 percent tax is levied on imported chicken which makes barely a dent on its landed price, and that the final nail in the coffin is the high production costs farmers have to bear.
Interest rates in the country far exceed the international norm. A farmer in the United States of America, for example, borrows at 4 percent, while Ghanaian counterparts pay up to 28 percent, according to the Business and Financial Times newspaper.
“This is related to the dominance of an ideology, of an economic policy aimed at attracting foreign direct investment --giving priority to foreign investment to the detriment of locals,” said Graham. “If you have resources, you can make long-term investments which in the early days absorb your inefficiencies and allow you to improve the efficiency of your enterprise. All the giant enterprises of the world that we know today went through phases. But they had a learning curve. Policy allowed them to survive the learning curve. In the context that we’re talking about, policy does not offer people producing for the home market even a first chance – never mind a second.”
Commenting on the low tariffs and lack of subsidies for farmers, the Third World Network's expert fumed at the fact that mining companies are effectively subsidized by the Ghanaian taxpayer.
“These mining companies, which get long tax holidays, are allowed to depreciate their investments very quickly so that they can claim it against tax. They are also allowed to retain their foreign exchange earnings more than 80 percent of it abroad without that coming to the central bank. Now if you consider that gold exports are the country’s biggest nominal source of foreign exchange, and the companies are allowed to retain the bulk if it for their own use, then they are extremely privileged," Graham concluded.