Selorm Quame – OPDAG Executive Secretary
The Oil Palm Development Association of Ghana (OPDAG), has urged the government to exempt oil palm from the implementation of the 50 per cent reduction benchmark policy.
According to the Association, with members from the entire palm oil value chain actors in Ghana, it is not advocating for a complete abolition of the policy as being portrayed.
“Since the introduction of the policy in 2019, the impact is adversely affecting the local Palm oil industry.
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 Executive Secretary Selorm Quame said in a statement.
He explained that the refineries are unable to sell their products competitively against imported vegetable oil which has become cheaper as a result of the effect of above policy which in essence has subsidized the imports to the disadvantage of local producers.
“For example, the cost of a 25 – litre jerrycan of vegetable oil produced locally is costed at GHC 260 ex-factory price and sold on the market for GHC265 inclusive of the duty, levies, VAT and logistics.
But the imported vegetable oil leaves the port at GHC 230 and are sold to traders at GHC 255 for onward selling on the market at GHC 260,” he said.
Mr. Quame said prior to the passing of the 50 per cent reduction benchmark Policy, the Association together with the Ministry of Food & Agriculture and the Customs Division of the Ghana Revenue Authority was fighting the practice of undeclared vegetable oil imports.
“This policy has legitimized under-invoicing. Hence the flooding of our markets with subsidized 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 $ 3,000,000 per month,” he stated.
He indicated that the above issues have made the industry unattractive to current industry players and not to mention new investors.
“The policy of Planting for Export and Rural Development (PERD) will be in danger of not achieving its desired objectives and the achievement of the noble objectives of the Tree Crops Development Authority will be put at risk,” he said.
In April 2019, the government effected the application of a polity that reduced the benchmark or delivery values of imports by 50 per cent, with the aim of reducing smuggling and enhancing revenue generation at the ports. But this policy, well-intended as it is, has created a price war in the market and given importers an unfair advantage over local producers.
Jamila Akweley Okertchiri