The Oil Palm Development Association (OPDAG) says the government must exempt palm oil from the reduction of the benchmark policy to save the industry from collapse.
“We the Oil Palm Development Association of Ghana (OPDAG), being the entire palm oil value chain actors in Ghana, are pleading with the government to review the 50 per cent reduction benchmark policy by exempting palm oil from the application of the policy – we are not advocating a complete abolition of the policy as being portrayed by Ghana Union of Traders Association (GUTA), a statement signed by the Executive Secretary of OPDAG, Selorm Quame and copied to the Ghanaian Times said.
OPDAG said the continuous implementation of the 50 per cent benchmark policy would kill the local palm oil industry and make the country to lose more than $3, 000,000 every month through under invoicing.
It said the Ghana Union Traders Association’s posture on the issue would “kill some local palm oil industries,” adding that “The leadership of GUTA is spreading falsehood to deter the government from reviewing the policy.”
It said since the introduction of the policy in 2019, the local Palm Oil industry had been adversely affected.
“The local refineries and manufacturing industries are no longer viable to operate and the concomitant effect is the downstream of the values chain which comprises the growers of oil palm – small and large are losing their livelihoods as they cannot sell their fruits sooner rather than later,” OPDAG, said.
The association said the refineries were unable to sell their products competitively against imported vegetable oil which had become cheaper as a result of the effect of the policy which was meant to subsidise imported oil.
“The sector is experiencing job and income losses especially in rural areas where local mills and smallholder farmers are actively engaged in the oil palm value chain. A mill that had 500 employees has down sized to 250 employees as at the beginning of 2021,” OPDAG, said.
According to the statement cost of a 25-litre jerrycan of vegetable oil produced locally was pegged at GH¢ 260 ex-factory price and sold on the market for GH¢265 inclusive of the duty, levies, VAT and logistics.
However, OPDAG said imported vegetable oil at the cost of GH¢ 230 and were sold to traders at GH¢ 255 for onward selling on the market at GH¢260.
“This means GUTA, is not actually fighting for traders but a handful of importers who are making huge profits while Ghanaians are at the risk of losing jobs and subsequently livelihoods at the downstream where hundreds of thousands of rural smallholder/out grower farmers operate,” OPDAG said.
ODAG said the objectives of the Planting for Export and Rural Development would not be achieved if the benchmark reduction policy was not reviewed, adding the programme would put the Tree Crops Development Authority Act, Act 1010, 2019 at risk.
It said prior to the passing of this policy 50 per cent Benchmark Policy the Association together with the Ministry of Food and Agriculture and the Customs Division of Ghana Revenue Authority were fighting the practice of undeclared vegetable oil imports.
“This policy has legitimised under-invoicing and hence the flooding of our markets with subsidised and substandard vegetable oils. Estimates of the undeclared importation (not conforming to regulatory standards) stands at approximate 6,000 to 7,000 metric tonnes per month and a loss in revenue through tax evasion stands at an estimated US$ 3,000,000) per month,” it said.
Meanwhile, the President of the Ghana Union of Traders Association, Dr Joseph Obeng, has reiterated that any intention by the government to scrap the 50 per cent Benchmark Value at the ports “will be suicidal”.
In a press statement, Dr Obeng said that the Benchmark Value brought relief to the trading community, sanity into the system, and eased tension and agitations amid the impact of the coronavirus on cross-border trade.
“Any attempt to remove this good policy of the government that brought relief will be suicidal for the state because it will not only collapse business but also cause an unbearable rise in prices of goods and services beyond the reach of consumers, especially, low income earners and the unemployed,” he warned.
BY KINGSLEY ASARE
