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28 September 2016

Vietnamese investors target rice investment

riceVietnamese rice investors and exporters drawn from about 14 companies are in the country to explore investment opportunities in rice production, processing, storage, marketing and distribution.

The one-week visit from September 23-29 is organised by the Vietnamese Ministry of Agriculture and Rural Development and the Ghana-Vietnam Chamber of Commerce and Industry.The country consumers about 750,000 metric tonnes of rice annually. However, just about 290,000metric tonnes are produced locally; leaving a deficit of some 460,000 tonnes which has to be imported.

The United States Department of Agriculture (USDA) data shows that, Ghanaians, in 2014, consumed 754,698 metric tonnes of rice, with imports making up 52 per cent. Government has said it is poised to cut the annual rice import bill of about US$600million and make the country net exporter by 2020.

The Ministry of Food and Agriculture argues that efforts at increasing local rice production to curb over-reliance on importation of the commodity is being undermined by lack of adequate infrastructure, specifically rice processing mills, in rice-producing communities of the country.

Prairie Texas Incorporated, otherwise known as Aveyime Rice Project, has also been left to rot. The rice processing facilities at the factory have been quiet for years. Hundreds of workers have also been laid off.

Vietnam is the world’s fifth-largest rice-producing country and has the requisite expertise in the production of the crop. The Southeast Asia country’s rice production has continuously increased, from 25 million tons in 1995 to almost 40 million tons in 2010.

Vietnam is one of the world’s leading rice exporters. The country’s rice exports reached 5.3 million tons in 2005 and almost 6.9 million tons in 2010.The similarity in the landscape of the Asian country is similar to Ghana’s landscape which is ideal for the production of the crop.

Rice production challenges For the 2014/15 farming season, farmers in the three northern regions had thousands of bags of rice locked up in warehouses due to the unavailability of mills to process the commodity, a situation that compelled the farmers to use manual means of rice processing which do not meet market standards.

Ghanaian consumers often cite the presence of stones in locally produced rice, aside price, as the reason they opt for imported brands.According to the Agric Ministry, the situation is an impediment to government’s quest to motivate rice farmers into boosting local production of the commodity to cushion food security, aside from robbing the farmers of their primary source of livelihood.

“Lack of rice-processing plants in the Northern Region is making it difficult to produce to feed the nation and produce quality rice that meets market specifications,” Alhaji Mohammed Limuna, the Agriculture Minister has said.

He added that: “The few in the region are defunct—a situation that has compelled government to continue spending huge sums of money to import similar goods to meet demands of the population.

This is affecting income generation of the local rice farmers, aside from discouraging most of the farmers from venturing into the rice sector only to incur debt.”There are also other production constraints, such as land tenure problems, removal of subsidy on inputs, absence of water control systems which consequently leads to high-risk and non-intensive cropping practices.

Other problems include low yields and low profitability, reduction of the productive capacity of the soil, coupled with over liberalization of rice trade in Ghana.Rice is important to the country’s economy and agriculture, accounting for nearly 15% of the Gross Domestic Product (GDP).

The rice producing area totals about 45% of the total area planted to cereals. The rice sector is an important provider of rural employment.

 

Source: B&FT

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