Making domestic rice production competitive and sustainable for food security

Abla Kormla, London, UK
March 22, 2024

G hana is a rice producer but consumption exceeds national production capacity, leaving import to fill the gap. Policy makers, multilateral and bilateral institutions and also civil society organizations promote domestic rice production to reduce dependence on import, save foreign currency reserves, and create jobs. As a staple food, rice is vital for food security. According to a 2022 seminal research report by Ghana Commercial Bank (GCB), per capita rice consumption is 48 kg per year. The population of Ghana is 33 million, according to the Ghana Statistical Service (2022), growing at a rate of 2.12 percent. Authorities expect rice consumption to increase at the same rate in the next decade¹

The country has structural gaps in the rice value chain². Disruptions in the supply of improved seeds, a lack of modern post-harvest processing facilities and the shortage of fertilizers hamper the peformance of this essential crop. Ghanaians’ rice producers must also maneuver around also several logistical challenges. For example, farmers lack silos for storing and rely on small scale milling machines³. Other complex issues include climate change, which affects rainfall patterns, especially in regions where smallholder farmers practice rain-fed agriculture⁴.

Production vs. consumption

According to the United Nations Food and Agricultural Organization (FAO) total rice consumption was 1,174,200 million tons in 2020. During the same year, the country produced 474,200 tons and relied on import for the additional needs. Between 2012 and 2024, Ghana doubled domestic rice production. But continued reliance on import not only impedes the development of domestic rice production but also represents a threat to national food security.

In 2021, the government announced plans to develop 9,000 hectares of rain-fed lowland rice. This project will add 31,500 metric tons to the domestic rice production and also generate 3,600 direct jobs for young farmers. In addition, the government plans to rehabilite and expand irrigation schemes over 1,000 hectares of land. This second project targets a yearly production of 11,000 metric tons.

Funding from donors and lenders

Farming need finance, but banks have a risk-averse approach that continues to deprive small holders of credit. This has forced the State to rely on external funding, grants, and loans for the promotion of domestic rice production. In 2021, the Government secured Euro 170 million loan to establish Development Bank Ghana (DBG). The goal of this new bank is to increase access to finance for farmers and small and medium size enterprises. Increasing production and domestic processing are two major priorities for the DBG⁵.

The government is also investing directly in rice production and has developed a National Rice Development Strategy (NRDS) which outline plans for inter-agency interventions. In 2022, government invested US$29 million dollars in rice production.

But domestic public funding alone cannot reverse the dominance of import. For this reason, Ghana continues to rely on technical and financial contributions from bilateral and multilateral donors and lenders to fill the funding gap. The Food and Agricultural Organization (FAO)⁶, the United Nations Industrial Development Organization (UNIDO)⁷, the World Bank⁸ and the African Development Bank⁹ assist Ghana in this area. Other multilateral donors and lenders include the European Union¹⁰, International Fund for Agricultural Development (IFAD) and Alliance for a Green Revolution in Africa (AGRA). Prominent bilateral includes the Kreditanstalt für Wiederaufbau (KfW) and Japan International Cooperation Agency (JICA).

Ghana is one of the beneficiaries of a recent regional initiative by the Republic of South Korea. South Korea launched the ‟K-rice belt” project on July 10th, 2023. This initiative targets eight African nations, which include Senegal, Gambia, Guinea, Ghana, Cameroon, Uganda, Kenya, and Guinea Bissau. South Korea then signed a memorandum of understanding (MOU) with the beneficiaries. The project will supply high-yield rice varieties and agricultural machines. The ambition is to help Africa build irrigation infrastructures and to acquire modern rice cultivation technologies. The initiative will distribute 2,000 tons of rice varieties in Africa in 2023. This quantity will rise to 10,000 tons per year starting in 2027. South Korea and the beneficiaries expect the project to feed 30 million people annually in the 8 target countries.

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