RICE IMPORTATION LIBERALIZATION IN GHANA: IMPLICATIONS FOR SMALLHOLDER RICE PRODUCTION IN NORTHERN GHANA

Abstract

The case of rice import liberalization in Ghana is an interesting and highly distinctive one. One of the policies of the Ministry of Food and Agriculture (MoFA) is to support an increase in local rice production in order to reduce imports by about 30% as part of efforts to promote food sufficiency. Its strategy aims to increase mechanization, the cultivation of inland valleys, effective and efficient use of existing irrigation systems and further development of irrigation. Ironically, this policy effort is pursued against the back-drop of macro-economic policy framework of free market where trade liberalization allows for the free flow of goods and services with severe implication for the rice industry. This paper discusses trade liberalization policy effects on rice imports in Ghana and the implications for smallholder rice farmers in Northern Ghana. A field survey reveals that the liberalization policies have worsened the income base of rice farmers - the real price per unit weight of domestic rice in Ghana has been declining following rice import liberalization and the economic returns of the rice farmers have been low and negative over the production seasons surveyed from year 2002 to 2004. Despite the increasing relevance of rice as a staple food and cash crop, the combination of the effects of rice import liberalization and high input costs attributed to the removal of input subsidies have severe consequences for smallholder rice producers in Northern Ghana.