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Results for a Western African Country:

Incentives and Disincentives for the Rice Sector in Ghana

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Ghana

Key Facts about Ghana No Item Facts 1 Total Land Area 23,884,245 Hectares

2 Agric. Land Area 14,038,224 Hectares (58.8%)

3 Agric Land under Cultivation

≈ 56%

4 Population Estimate (2012)

25.91 Million

5 Population Growth Rate 2.5% per annum

6 Principal Agricultural Exports

Cocoa, Timber, Horticultural Products, Fish/Sea Foods, Game & Wildlife

7 Principal Mineral Resources

Petroleum, Gold, Bauxite, Manganese and DiamondSource: SRID, Facts and Figures

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Introduction (1/2) •Ghana is food sufficient in all staples except rice•Rice is second most important grain food staple next to maize •Estimated 610,000 mt consumed in 2012

•Local production satisfies about 35% of demand

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Introduction (2/2)

•Among the top 50 rice producers worldwide •Most imported of all cereals -58%(CARD, 2010) •Average annual import bill of about USD 450 million (MoFA and AGRA, 2010)

Areas of Rice Production in Ghana • All the ten regions of Ghana• Concentrated in three different ecologies;

– Lowland rain-fed ecology (78%)– Upland rain-fed ecology (6%), and– Irrigated ecology (16%)

Rice Production ('000mt)

2005  2006  2007 2008 2009 2010 2011 20120

100

200

300

400

500

600

237 250185

302

391

492 463 481

Paddy Rice

Source: MoFA, 2012 APR

Rice Production & Consumption

2008 2009 2010 2011 20120%

20%

40%

60%

80%

100%

Production Consumption Deficit

Source: MoFA 2012 APR

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Rice Import ('000mt)

2005 2006 2007 2008 2009 2010 2011 20120

100

200

300

400

500

600

485

390442

395 384320

543509

Source: SRID, Facts and Figures

Sources of Ghana rice Imports (average 2005-2010)

Source: UN Comtrade

Policies /Programmes Interventions • 20% import tariff on CIF value (temporarily

suspended in 2008 and reinstated mid-2009)• Input Subsidies;

– Fertilizer Subsidy Programme (2008 - date)– Block Farm Programme (2009 - date)– Seed Subsidy Programme (2012 - date)– AMSECs (2010 - date)

• NAFCO (2010 - date)• Rice Projects (e.g. RSSP, Jica Rice Proj etc)

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Impact of Tariff and Access Costs on Imported Rice

Source: MAFAP Calculations

Price Incentives in relative terms for producers and wholesalers

Source: MAFAP Calculations

Key Findings• Wholesalers faced incentives for the whole period

under analysis given their closer connection with the international markets

• The level of incentives for wholesalers is above the 20% import tariff in all years

• Farmers face disincentives for the year 2009 and 2010 which may be justified by the market inefficiencies between the producing areas and wholesale markets

• High access costs and bad price transmission are the main drivers of disincentives at producer level

Recommendation

• Policy interventions are good tools but need to be better targeted to address market inefficiencies and infrastructural gaps

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Thanks