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Countries in developing economies are awakening to the global food crisis by taking short-term measures in order to protect its citizens against rising food prices. Earlier this year Indonesia decided to suspend import duties on wheat, soybeans, fertilizer and other food-related items for the rest of the year, escalating its fight against soaring food prices that have driven up inflation in Southeast Asia's biggest economy and other countries in the region. "There was no import duty on wheat until last month but a 5% tariff was levied Dec. 22 as part of a program to harmonize tariffs under WTO guidelines, but now the government has reverted the tariff on around 57 products to zero," said Franciscus Welirang, chief executive of Bogasari, Indonesia's largest flour mill. After the government earlier scrapped the import duty on rice products, state-run logistics agency Bulog has already contracted 820,000 tons of rice for imports from Thailand. In a similar move the Government of Malaysia commitment itself to extend the expired National Food Security Policy (FSP) and also implement the fourth National Agricultural Policy (NAP 4) this year. The FSP (2008-2010) was introduced at the height of the global food crisis with prices of food-based crops like wheat soaring by 130%, rice 74% and soybean 87% as a result of supply shortage due to climate change on the back of strong demand from the growing world population. It will be remembered that the previous government in Ghana also took emergency measures in 2008 when it scrapped the 20 percent import duty on rice and other foodstuffs to shield Ghanaians from the shocks of the 2007-2008 crisis. In December 2009 the new NDC led government re-introduced the 20 percent import duty when the Minister of Finance made the following announcement: �The global conditions that necessitated the removal of those duties have abated and government finds it pertinent to restore the duties in order to encourage local production, create jobs and conserve foreign exchange. This development is not just welcome news and an incentive to our local farmers but also fits into the social democratic values of this government.� Statement from the Finance Ministry. Daily Graphic 23 December 2009 This step astounded analysts and an analysis of the above statement indicated that the move was indeed immature and not in the interest of Ghanaians. Have the global conditions really abated at that stage? We are not sure where the Honourable Minister got his information from? About one month prior to his announcement the World Bank issued a warning as follows: Food Crisis May Repeat, Warn Leaders in Global Hunger Fight In addition various reports were issued that despite the scrapping of duties in 2008 food prices were still escalating. Fuel prices might have come down and the availability of rice might have improved, but food prices did not come down. An analysis of certain imported rice stock showed that prices in fact increased since the scrapping of duties by between 10 and 33 percent! Why then did the NDC government lie about this issue? Has the duty reinstatement encouraged local production? There are many theories about the protection of local production by means of either import duties or subsidies. The developed countries use subsidies extensively and many economists believe that that is distorting the world market. In Ghana�s case one has to look at the state of local rice production. Demand and Supply Although a lot of question marks are placed on the reliability of agricultural statistics in Ghana, it is estimated that local production only caters for about 30 percent of the consumption of approximately 500,000 metric ton of rice. The same figures were quoted in 2000. This means that local rice production has not improved despite high import duties. As will be shown, high import duties have in fact been part of the problem. What does this tell us? Rice importation is an essential part of Ghana�s food security for now. If rice importation does not take place, Ghana will have serious imbalances in the availability of one of its staple foods. The problem is not legally imported rice, but rather smuggled rice due to high import duties (see separate analysis). Inherent Rice Production Problems The only real way to increase local rice production is for the government to address the factors that prohibits the growth of the industry. These include the following: �Low quality of locally produced rice. If consumers are given the choice between low quality locally produced rice and high quality imported rice, they will choose the latter. �Low yields. This is partly due to unprofessional farming practices and or the incorrect or insufficient application of fertilisers. �Irrigation. Visits to the Afife rice project shows that through governmental neglect the production of rice from the project was at its lowest level ever in 2010. �Mechanisation. The capacity of rice production will never increase if the ground preparation, planting and harvesting is left to manual labour. �Markets. Farmers are finding it difficult to get produce to markets and this has and still is causing food to rot on farms. If these fundamental issues are not addressed, local production as percentage of consumption will in fact decrease. It is very clear that high import duties will not promote or increase local production. The substantive issues need to be addressed. Have New Jobs Been Created? If the production of rice has not (and will not) be increased, logic says that new jobs will not be created. In fact, the Ministry of Food and Agriculture recently claimed that block farming initiatives have created 47,000 new jobs. Independent visits to block farms confirmed that these farms are being worked by existing farmers � not new farmers. The creation of new jobs will only take place if inherent agricultural problems can be resolved � higher import duties will not facilitate this. Have Foreign Reserves Been Conserved? It has indeed not been conserved. Indications are that more foreign reserves may be required due to the major problems farmers are experiencing. The block farmers are complaining bitterly that for two years the promised support in terms of fertilisers and mechanical support arrived too late and that it will in fact impact negatively on yields. This in turn indicates that a shortage may be experienced that will necessitate higher imports. In Line With the Social Democratic Values of the NDC This argument is probably the biggest flaw in the government�s argument. Higher import duties per se will not increase local production. Higher duties, however, have caused a further shock for millions of Ghanaians who are battling to make ends meet. They are not to be blamed for local production inefficiencies but are made to pay the price. As Alex Bossman Baafi said: �As a social democratic government, you need to have a second look at this particular intervention, for, it goes a long way to negate your promised social democratic governance agenda�� Recently the Minister of Food and Agriculture, Mr. Kwesi Ahwoi, said prices of food had been stabilised and that Ghana had food sufficiency which had stabilised prices of food on the local market. At the same time reports are circulating in the media where both consumers and traders complain bitterly about rising food prices and increasing hardship. Many claims are made by Ghana�s Ministry of Food and Agriculture (MOFA) about steps taken to create a �Green Revolution�. If this is true the steps must be applauded. However, we are experiencing a food crisis. Any crisis demand both longer- and shorter-term initiatives. While 70 percent of Ghanaian rice consumers are suffering due to a 37 percent import duty on foodstuff such as rice compared to only 12.5 percent in neighbouring Ivory Coast, the government stays in denial and refuses to consider short-term measures such as a reduction in those duties. Rising food prices and government insensitivity about that has played a major role in the recent popular uprisings in the Middle East and North Africa, and indications are that this may spread to Sub Saharan Africa sooner than later. It remains to be seen to what extent the insensitivity of the Ghana government will impact on its political position in the light of the 2012 general elections.