Friday, September 21, 2007

Poultry Sector to Be Hardest Hit By EPAs, Stakeholders Kick Against It

Kwaku Segbefia runs up and down a busy road in the center of the Ghanaian capital Accra. The 32-year-old is trying to sell fowls and eggs to commuters in the scotchy sun. Drivers zoom past him but few stop to buy fowls or eggs.

"For the whole day I have not managed to sell enough to pay my rent" Kwaku complained stopping the middle of the conversation to attend to a buyer. He still has three cages full of birds standing by the roadside.

The reason for this situation is not hard to find. He said supermarkets in Ghana most restaurants are swelling with imported frozen chicken from Europe.

"People don't want to buy local chicken because the imported ones are much cheaper," he lamented.

Poultry farmers cannot recover their investments due to non-patronage of their products.

Kwaku Segbefia is not the only one suffering from this situation but all poultry farmers in the country.

For the last few years, the Ghanaian market has been flooded with cheap imported chicken from the European Union and the United States. These are usually fatty chicken parts that come in packages without labels. Nonetheless, demand for local poultry has collapsed, threatening the livelihoods of over 1,000 poultry farmers in both small and large-scale poultry farming in Ghana. In 2002 alone, more than 26,000 tonnes (one tonne is roughly the same measurement as a US ton) of chicken was imported into the country, mostly from the European Union where farmers receive generous subsidies for their products. In 2004, that figure was estimated to be as high as 40,000 tonnes.

Ghana imports almost one third of the EU frozen chicken that goes to Africa. Cameroon, Togo, Senegal and South Africa are among the other nations receiving imported frozen chickens and chicken parts.

Ghana's position was further made hopeless when the poultry industry lost the battle with government not to reduce tariff on imported poultry. The tax on imported poultry was reduced from 40% to 20% whilst that on rice also came down from 25% to 20%.

This was seen by most farmers (poultry and rice) as a reversal of the government's plan and pledge in 2003 to increase tariffs on imported poultry products and rice to boost their production in the country. The European Union, the source of most of the imported chicken provides 43 billion euros to its farmers annually.

The President of Ghana National Poultry Farmers' Association (GNPF), Mr. Kenneth Quartey said the decision to pass the law is a symptom of weak leadership in the President and parliament as well as bowing to external pressures.

The current situation of the poultry industry would be compounded when the EPAs takes effect in 2008 in its current state with the removal of tariffs across board.

As the deadline for the signing of the EPAs gets closer in December 31, 2007 various schools of thought have come up with adverse effects the economy of Ghana will face if the agreements are signed in its current state. The total opening of borders, which it is all about on both sides, under this agreement, can only lead to a paralysis of productive sectors in the countries of the South such as Ghana, with the invasion of European goods and services. Especially in the agricultural field where Ghanaian producers would face up to largely subsidised products.

On the other hand, it is not obvious that the removal of tariff barriers in Europe means free access of ACP exports to this market. Several limitations can exist which are related to quality standards or to phytosanitary measures.

The poultry sub-sector might be in danger of collapse.

Already, big and small poultry farms in Ghana including Drako Farms, Afariwa Farms among others have cut down output and staff considerably because they can not compete with the cheap imports from EU and USA.

Similarly, by removing tariff barriers, African countries would be reduced to putting a cross on their main source of internal financial revenues.

Mr. Bernard Mornah, National Youth Organizer of People's National Convention (PNC), a political party said EU poultry product will flood Ghana's market as the EU subsidizes her farmers whilst Ghana does not.

"What this means is that poultry produced in Ghana is likely to be three times more expensive than imported frozen chicken".

He said the poultry industry in Ghana has some serious challenges, because the price of imported frozen chicken is far cheaper than locally produced chicken and the Ghanaian farmer is at a disadvantage.

According Mr. Ofei Nkansah of Ghana Agricultural Workers Union (GAWU) who is a a member of the Third World Network (TWN) said it is generally admitted that if the EU liberalises its trade by 100%, ACP countries and especially Ghana would liberalise by 80%, which would restrict to 20% the protection margin for local products in the face of the competition of European goods and services.

He said the removal of import customs barriers for European products would in fact put in direct competition the products often highly subsidised of one of the economically most advanced regions with those of the producers of some of the poorest countries in the world. He said this could accelerate the collapse of the poultry industry in Ghana and in West Africa as well.

Mr. John Dziwornu, the president of the Ghana National Framers and Fishermen Association told this reporter that the poultry industry would be heading for collapse if the 100% - 80% liberalisation takes place. "Farmers in the country can not compete with products from EU and the USA especially with the huge subsidies for their farmers," he stressed.

He advised the government to approach the EPAs with caution. He said currently the cost of getting farming inputs, drugs and even day old chicks are expensive and imported. He called for government's support for the poultry industry and agriculture in general.

The Poultry Farmers Association of Ghana headed by Mr. Ken Quartey has also complained that competition would be unfair with the EPAs especially with the free markets.

Tetteh Hormeku of Third World Network-Africa (TWN-Af) proposed that African countries adopt the General System of Preference plus (GSP+) which will enable them to have access to EU market at levels similar to what they enjoy today, and this can even be improved. "The EU claim that only the EPAs can guarantee this continued access is totally false", said Tetteh Hormeku.

He said local poultry farmers are suffering because of the influx of poultry products from developed countries and this would be compounded with the coming of the EPAs. Meanwhile, EU Trade Commissioner Peter Mandelson on Tuesday September 11, 2007 urged ACP governments to join a final burst of negotiations to successfully complete Economic Partnership Agreement negotiations by the end of 2007.

He warned that there would be no legal basis for the extension of existing preferential trade terms between the EU and the 78 African, Caribbean and Pacific countries if the two sides do not initial new Economic Partnership Agreements before the end of 2007. In the absence of such agreements, Mandelson said, the EU and the ACP would have no legal alternative but to switch to the EU Generalised System of Preferences which would mean less-generous tariff preferences for many ACP countries. Ghana: Poultry Sector to Be Hardest Hit By EPAs, Stakeholders Kick Against It (Page 1 of 2)

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