Price Cuts Are Not the Solution to the Grains Glut in Ghana – Dr Kojo Ahiakpa
I responded to several comments from social media when I posted about the ongoing grains glut. Most of the comments laid the blame squarely at the doorsteps of local grain farmers. Many insisted that local farmers deliberately overpriced their produce pushing consumers towards imported grains which are affordable. I decided to turn my response to these comments into this blog to expose the reality and hazard remedial actions.
Grain farmers in Ghana are being told to lower their prices to stimulate domestic patronage and consumption. This framing is incorrect. Farmgate prices are determined by input costs, financing conditions, labour, logistics (transport & haulage), post-harvest handling, and storage. Our local grain farmers and producers operate without any subsidy support. Imported rice and maize enter the market at prices shaped by foreign state subsidies, export incentives, and mechanisation rebates. Asking Ghanaian farmers to reduce prices is a demand for them to operate at a loss.
I tracked and visualised annual production data of maize and rice from 2020 – 2024. The data reveals two distinct but complementary narratives for maize and rice. Maize continues to serve as the stable staple of the agricultural sector, demonstrating steady, incremental growth year upon year. A significant acceleration in the growth curve between 2022 and 2023 suggests a possible successful intervention or a season of particularly favourable weather, the benefits of which were largely sustained into 2024. This consistent performance is underpinned by several key drivers. As a primary staple and a critical input for animal feed and various industries, demand for maize remains perpetually high, which in turn drives continuous domestic production. Furthermore, this trend is supported by the gradual adoption of improved hybrid seeds, which offer higher yields and better drought tolerance, and is reinforced by ongoing government programmes that provide subsidies for fertilisers and seeds specifically targeted at maize farmers.
In contrast, rice is a strategic food security commodity, showcasing a growth trajectory that is not merely steady but truly exponential in 2024. The 2024 production figure was significant and highly positive outlier, representing a dramatic departure from the established trend. This remarkable surge is most likely attributable to a concerted, large-scale policy initiative, such as the erstwhile “Planting for Food and Jobs” programme or a similar national effort focused squarely on achieving self-sufficiency in rice. Such an initiative typically involved the widespread distribution of improved seed varieties, significant development of irrigation infrastructure for dry-season farming, and substantial fertiliser support. Additional contributing factors included attractive government-guaranteed prices for paddy rice, which partly incentivised farmers to expand their acreage, alongside major private sector investments from large-scale commercial rice farms coming into full production.
The implications of these trends are profoundly positive for national food security and import substitution, particularly for rice, where increased domestic production saves valuable foreign exchange and stimulates the local economy. The data signals a deliberate and successful policy shift towards establishing rice as a strategic crop, complementing the traditional dominance of maize. However, a critical question of sustainability now presents itself: can this dramatic increase in rice production be maintained? The answer will depend on the continued funding of successful policies, the prudent management of water resources for irrigation, and a committed focus on maintaining soil health through integrated nutrient management. Ultimately, this data tells a story of significant agricultural progress, where the maize sector exhibits resilient growth and the rice sector indicates a remarkable, and potentially transformative, leap forward. The per capital consumption of maize and rice within the same periods tells a different story: it’s not a question of price but preference.
The annual production volumes show a consistent and dominant output of maize, which maintains a significant lead over rice throughout the period. While both crops demonstrate a steady upward trajectory in production, maize remains the quantitatively more substantial crop by a considerable margin. However, in terms of consumer preference, despite its lower production volume, rice has a significantly higher per capita consumption, estimated at 75.9 kg per person annually, compared to 45.0 kg for maize. This disparity highlights a critical dynamic within the agricultural sector: while maize production is significantly higher, rice is the preferred staple in the diet of the population. This situation suggests a potential dependency on rice imports to bridge the gap between domestic production and consumer demand, underscoring a strategic priority for agricultural policy to align production more closely with consumption patterns.
Thus, the current glut is not a result of overproduction. It is system failure in market coordination, procurement, and policy alignment. Unsold grain is the result of continued import liberalisation even when domestic output is available. Local maize and rice sit in warehouses while retailers stock imported alternatives. This erodes rural incomes, weakens domestic production capacity, and increases dependency on foreign supply.
Other countries have corrected similar dynamics through direct policy intervention.
1. India enforces Minimum Support Prices for rice and wheat through the Food Corporation of India. The state purchases at guaranteed prices, stabilising farm incomes and preventing price suppression. Grain imports are regulated through tariffs and quantity controls to ensure domestic harvests enter the supply chain first.
2. China uses tariff-rate quotas and state grain reserves to control market exposure. Domestic producers sell into guaranteed procurement channels. Imports are permitted only to fill deficits. This prevents price collapse at the farmgate level.
3. Nigeria restricted access to foreign exchange for rice imports and expanded domestic milling under the Anchor Borrowers’ Programme. The result was increased local paddy production and reduced reliance on foreign supply. Processors were forced to integrate with domestic growers. Market absorption increased. Farm incomes stabilised.
These cases demonstrate a consistent principle: domestic production stabilises when the state controls import volume, timing, and market access, and when price guarantees anchor farm-level viability. Where these controls are absent, subsidised foreign produce displaces local output, and farmers bear the entire cost of market failure.
Key takeaways for Ghana:
1. Input-cost rationalisation through targeted fertiliser, seed, and mechanisation support or pooled procurement. Price sustainability begins with production cost sustainability.
2. Controlled import regimes for rice and maize, including seasonal import suspension during peak domestic supply periods and foreign exchange access restriction for non-essential imports.
3. Mandatory domestic procurement across state institutions including schools, security agencies, hospitals, and feeding programmes to create stable baseline demand.
4. Minimum price guarantees linked to structured trading on the Ghana Commodity Exchange to prevent destructive price volatility and ensure predictable farm income.
5. Strengthened aggregation, grading, drying, and storage infrastructure at district level to support continuous market delivery rather than distressed selling.
The economics are straightforward. Farmers cannot reduce prices without erasing their operating margin. The problem is not farmer pricing. The problem is a policy environment that exposes domestic producers to subsidised foreign competition while offering no stabilisation mechanisms. Structural correction requires state intervention at the level of market design, not producer sacrifice.
