Agriculture’s woes: Hostile tax systems, lack of centralised data to blame

The country’s agricultural sector could see sustained growth if more tax-friendly policies are introduced, with data much more centralised and made available to all players, Dr. Yaw Osei-Asare, Agriculture Economist and a Senior Lecturer at the University of Ghana with the Agriculture Economics and Agribusiness Department has said.

Speaking at the just-ended high-level multi-stakeholder forum dubbed ‘Promoting fair food pricing in Ghana’ organised by Consumer International in partnership with the Ghana International Trade Commission (GITC) in Accra, Dr. Osei-Asare noted that the removal of taxes on agricultural inputs and others will go a long way to reduce the final price of produce.

“Government is looking at ways of generating revenue through taxes, but high taxes do not develop the nation. We rather require tax-cuts so that government will think of ways to reduce its high expenditure in certain sectors.

“I would say the current tax regime is very hostile, and it is not only the agriculture sector but other businesses as well,” he said.

Touching on the lack of centralised data, he added that: “Data is generally needed for planning purposes. There is data available but its reliability is the issue. Some organisations may refuse to release the data they have while others may charge for the data or choose to give it for free. Other ministries and departments also have data, but coordination is needed for all these data to be harmonised and put in a particular portal for the general public to access”.

Unfair food prices

Davine Minayo, Fair Food Prices Specialist at Consumers International, speaking on the subject of fair food prices noted that tackling unfair food prices requires stronger competition to prevent abuse of market dominance and anti-competitive practices.

To achieve this, Minayo said Ghana needs a strong competition law, as well as strong enforcement; improved data and evidence; and greater voice for consumers and small-scale farmers, who are mostly affected by unfair prices.”

The causes of unfair food prices

Global food prices have been steadily decreasing since March 2022, yet African economies are still experiencing rising prices. In Ghana food prices are unbearably high, as rapid inflation – among the highest in Africa – is forcing millions into hunger and malnutrition. In 2022, more than 15 million people in Ghana   (49 percent of the population) were food insecure. Yet farmers and food producers are not benefitting from these high prices, and many are still struggling to survive.

Frank Agyekum, Executive Secretary of Ghana International Trade Commission (GITC), highlighted that “external factors such as the high cost of imported agricultural inputs, the effect of climate change with its devastating consequences across the world, internal conflicts   as well as external conflict such as the Russian-Ukraine war, and also forces of nature such as the COVID -19 pandemic”.

“This is a challenge right from the farmgate to the marketplace. Those who stand as middlemen, as aggegators, are adding to the high cost of food in this country. Farmers have no choice but to sell at the price set by the aggregator, who then moves  the food to the market and again takes advantage – selling at a much higher price,” added Samuel Aggrey, Executive Director at the Food and Beverage Association of Ghana       .

Researchers from the Bureau of Food and Agricultural Policy (BFAP), based in South Africa, shared a new methodology for monitoring unfair food prices, developed in collaboration with consumer groups. For example, using data from the UN World Food Programme and Ghana Statistical Service, researchers showed that while the average retail price of cassava in Ghana rose by 107 percent in 2022, the average wholesale market price rose by just 23 percent.

Richard Tweneboah-Kodua, Ag. Director, Research and Innovation at the National Development Planning Commission, explained that there are systems in place to tackle unfair food prices – but compliance is an issue.

“If we cannot monitor and insure compliance through sanctions and rewards, then the problem will continue to fester.        We need a coordinated effort across all agencies – at national, regional and district level – to tackle this problem,” he said.

Recommendations

Stakeholders at the event acknowledged the urgent need for a competition law, and a dedicated authority that is empowered to take action against unfair prices caused by anti-competitive practices.

Shadrack Nii Yarboi Yartey, the Communication, Advocacy and Programmes Lead at Consumer Unity and Trust Society (CUTS) Accra, said that:  “There is absolutely no regulation in Ghana that criminalises anti-competitive practices. There is no law, although there is currently a draft bill from the Ministry of Trade and Industry. There is an urgent need for a regulatory framework to control the market, to make it a fair playing field for all actors – tackling price-fixing and cartels”.

In addition, they said stronger data is needed on unfair food, explaining that there is not enough information available on domestic food prices, partly due to the informal nature of the food marketplace, which means that actors are easily able to get away with excessive pricing.

There is also a particular need for more data on the prices of healthy and nutritious foods, which are under-researched.