Comparative advantage and rice policy in Ghana
1987
Brempong, S.A.
The study has clearly shown that Ghana has no comparative advantage in rice production for all the production systems outlined in the study, namely: traditional (less-intensive), improved, partially mechanized (semi-intensive), and irrigated, fully mechanized (intensive) systems. However, relative comparative advantage lies with the traditional system (DRC/SER = 2.86), while both the improved (DRC/SER= -1.42) and irrigated (DRC/SER = -1.04) systems result in absolute loss of foreign exchange. This was further buttressed by the EPC values which were positive for the traditional system and negative for the improved and irrigated systems. Ironically, the NPR and IT estimates show that government policies greatly favor the rice industry. Domestic rice prices for the last decade have been 200 percent to 1700 percent higher than comparable world prices, indicating that rice consumers in Ghana have been greatly taxed to finance an inefficient rice industry. Furthermore, government has made huge investments in irrigation and land development, and subsidized inputs to promote the rice industry. The policy thrust has been area expansion which was not matched by adequate yield increases, therefore the overall performance of the rice industry has been poor and very costly to the domestic economy. Also, by being biased towards large-scale rice production as against the small-scale farmer, government policies failed to ensure equitable income distribution as the bulk of the benefits resulting from policies accrued to large-scale farmers.
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