“If local manufacturing
became more expensive due to increased raw material cost as a result of
taxation, imports would take the industry by storm and the already struggling
industry will suffer even more,” he said.
Government is expected
to impose a 10 percent Import Adjustment Tax (IAT) in addition to the 10
percent ECOWAS Common External Tariff (CET) on imports of crude palm oil.
Meanwhile, out-growers
and smallholder oil palm farmers have been pushing for speedy implementation of
the IAT on crude palm oil to help protect
the local industry and raise additional revenue to support economic
growth.
Speaking to a selected
group of journalists in Tema, Mr. Avaala urged all stakeholders in the palm oil
sector to come together for a boarder consultation on key issues affecting the
industry, including Import Adjustment Tax (IAT) on Crude Palm Oil (CPO), to
adopt a common position for the greater good of the entire value chain.
“Some actors in the
palm oil value chain are calling for the introduction of IAT on imported on CPO
now -- at a time when Ghana is a net importer of the raw material.
“Will that be in the
best interest of the entire industry and the economy in the near-term and long-term?
This is a nagging issue that cannot be decided on unadvisedly.”
On OPDAG’s position,
Mr. Avaala said: “A meeting of key stakeholders was convened and a common position
on IAT taken, which has been submitted to the Ministry of Finance”.
The position was that
in the interest of the industry as a whole, the tax regime for imported palm
oil for the present should remain same.
He said OPDAG was
re-launched on the 15th of April 2015 in Accra jointly by the
Minister of Trade and Industry, Mr. Ekwow Spio-Grabrah and Minister of Food and
Agriculture Fiifi Kwetey in Accra -- with the mandate to seek and advocate for
total health and sustainable development of the entire palm oil industry.
“I am therefore calling
on all stakeholders to our first post re-launch all-stakeholder forum on August
19, 2015 at the Conference Centre of the Noguchi Memorial Institute for Medical
Research, Legon under the theme ‘Harnessing
the full potential of the oil palm industry in Ghana’, he added.
At this forum, the
association will come out with one voice on all matters relevant to the
sustainable development of the oil palm industry in the country.
Commenting on issues
affecting the palm oil sector, He said, the refiners and fast moving consumer goods
manufacturers have more than enough capacity to produce for domestic
consumption and for export into the sub-region but they do not get enough CPO
from local sources to produce and therefore unavoidably import the commodity as
raw material to augment what is locally available.
“If they could source
100% of the raw material locally they would be lower in production cost, and
their prices could be more favorable to the ordinary Ghanaian consumer and for
the export market. Any further cost imposition on these manufacturers could
have a ripple-effect on the small-scale producer, since their fruit may not be
bought by millers whose customers are the refiners.
“The small-scale
producers and millers mostly do not adopt industry best practices in their
operations,” he said.
The yields are more
than five times lower, while their palm oil is of high free fatty acid (FFA)
content. This makes their oil unsuitable for use by the refiners and fast-moving
consumer goods (FMCG) manufacturers. The economic potential is huge as yields
can be more than doubled with little or no expansion of area planted.
There is need to
institute a fair and transparent pricing mechanism for the fresh fruit bunches
(FFB) produced by the small-=scale farmers.
The estate plantations
have to compete for the limited outgrower fruit over a relatively wide area of
coverage, with the attendant high transportation and logistical costs. This
cost could otherwise be avoided, and thus goes to increase the prices of fresh
fruit bunches (FFB) at the farm gate.
Land acquisition for
expansion of the large scale estate plantations has been a mirage due to the
cumbersome land tenure system. In research, there is a lot more that can be
done to make the industry viable.
While imports should
not or cannot be stopped, the right quantities and invoices ought to be
declared and corresponding duties paid. This will not only rake in the needed
revenue but also ensure the playing field is level for local producers and
importers.
Long-term tailor-made
financing for oil palm development is required to attract investment into the
sector.
The government’s master-plan
for the oil palm industry, which was developed in 2012, is in waiting and needs
to be in motion, he added.
Overview of the palm oil industry
Palm oil is the most
important oil crop in Ghana and in West Africa as a whole. It represented 2% of
total agricultural production value in Ghana in 2010.
Generally, about 80% of
production for the palm oil used in this country is reckoned to come from
smallholders, outgrowers/independent farmers whose yields are in the region of
3 to 5 tonnes per hectare compared the 10 to 15 tonnes per hectare being
achieved by the large estates.
Palm oil in Ghana
became a commercial crop at the beginning of the 19th century. It
was originally based on wild palm harvesting, and later in 1850 oil palm
plantations were established and oil palm evolved to become an agricultural
crop.
This led to the palm
oil becoming the country’s principal export in the 19th century,
accounting for about 75% of Ghana’s export revenue.
According to recent
MOFA statistics, there is a little over 300,000 hectares of area planted with
oil palm and a corresponding palm oil production of about 240,000 metric tonnes;
but there is an unmet demand of between 35,000 and 50,000 metric tonnes, making
the country a net importer of the commodity.
Value chain actors & their interests
The actors in the palm
oil value chain include the small-scale independent farmers, outgrowers,
smallholders, estate plantations and their associated mills, artisanal millers,
refiners, FMCG manufacturers, traders, distributers, transporters, research
institutions, government and others.
These actors have one
main interest, which is to see the oil palm industry become more and more
viable, robust and sustainable. There are also some interests that are specific
to the different actors, which sometimes are even contra-different.
Consumption & uses
Crude palm oil (CPO) is
raw material in both foods like cooking oil, margarine, biscuits, ice cream, and
non-food products like soap and cosmetics. The palm kernel oil (PKO) is also
used in the blend for toilet soaps, cosmetics, and in oleo-chemicals.
Palm oil is an essential
part of most Ghanaian cuisine, especially in the forest and coastal zones. It
has been recommended by WHO as an ingredient in food fortification programmes
where vitamin A deficiency exists.
No comments:
Post a Comment