Ghanaian company partners with Thailand to transform rice industry

The Jospong Group of Ghana, a diversified holding company, has partnered with several Thai rice industry leaders to develop an integrated rice farming scheme in the West African country. Under the agreement, the Thais will provide technical and equipment support for the project. The intention is to produce rice for both the local and overseas markets. 

A team from Jospong, led by its founder Joseph Siaw Agyepong travelled to Thailand last year to study the country’s rice sector with a view of replicating their experiences and strategies in Ghana. Although the exact details of the project are yet to be fully disclosed, during the visit Jospong signed a memorandum of understanding (MoU) with key Thai rice industry stakeholders for the supply of farm implements as well as the establishment of rice mills and facilities dedicated to seed development and research, rice mechanisation and bio-organic fertiliser production. A newly established corporate entity - Asia-Africa Cooperation - is to drive the development of the project. In December 2022, the first group of technical experts from Thailand arrived in Ghana to begin work on the joint rice farming project. At a reception dinner on 29 Dec to welcome the delegation, Agyepong announced that the Export-Import Bank of Thailand had pledged US$160m in funding for the project.

Rice is a strategic crop for Ghana and is cultivated as both as food and cash crop. Its consumption continues to increase as population grows and rapid urbanisation changes consumer habits. According to Ghanian Ministry of Food and Agriculture paddy rice production grew from 302,000 MT to 987,000 MT between 2008 and 2020.  The average per capita consumption of rice in Ghana is 45.0kg per annum. Yet the country relies on imports for 60% of its need. In 2020, it imported US$391m worth of in Rice. Local farmers struggle to compete with cheap Asian rice imports. That is largely because the world’s top rice producers such as Thailand liberally subsidise their farmers. The input costs for smallholder farmers in Ghana is far more than those for their counterparts in Thailand. They also find it difficult to access loans from local financial institutions and this are unable to invest in new seed varieties that could improve yields. Other obstacles include inadequate processing infrastructure, insufficient silos for storing paddy before milling, and a lack of quality standard testing.

The Government of Ghana has placed a priority on rice to address food security. It introduced the Special Rice Initiative which has sought to bring improved rice seeds to farmers at the district level. But most rice projects have focused more on production and less on post-harvest part of the value chain. Thankfully the private sector has complemented government efforts by establishing rice mills across the country. Farmers, however, lament that despite these improvements they are not able to compete against cheap imported rice. With  the country now in the midst of a financial crisis it is unlikely to have the fiscal space to extend the kind of support its rice farmers need to compete against Asian rice.

 

References

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‘Reclaiming the pride of Thai rice’, Bangkok Post, 14 September 2022

‘Draft 2023 budget speech’, Ministry of Finance, 24 November 2022

‘Rice farmers must prevail’, Bangkok Post, 26 November 2022

‘Jospong partners with Thai companies for rice production’, Business Ghana, 28 November 2022

‘Thailand to help support Ghana rice development’, National News Bureau of Thailand, 27 December 2022

‘Thailand Consul assures Ghana of support for large scale rice production’, MyjoyOnline, 31 December 2022

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