Francis Kumajor runs up and down a busy road in the center of the Ghanaian capital
Accra. The 17-year-old is trying to sell chickens to commuters in the sweltering
heat. The drivers, sealed in air-conditioning, cast sullen glances as they drift
by. Very few of them stop.
"For the whole day I have not managed to sell enough to pay my rent, less
than ten chickens…" Kumajor complains, stopping mid-sentence to catch
a rare stopped vehicle. He still has three cages full of birds standing by the
The cause of Kumajor's plight is not difficult to locate. In fact, he articulates
the problem well. "Walk into any of the supermarkets and you will find
that they are bulging with imported frozen chicken," he says. "People
don't want to buy local chicken because the imported ones are much cheaper,"
he adds, trying to force a smile.
For the last few years the Ghanaian market has been flooded with cheap
This phenomenon is known as "dumping." Developed countries -- such as
the EU and the US -- will often take excess product, whose production has been
heavily subsidized and sell it to the developing world at prices that are so low,
they ruin local markets.
imported chicken from the European Union and the United States. These are usually
fatty chicken parts that come in packages without labels. Nonetheless, demand
for local poultry has collapsed, threatening the livelihoods of over 400,000
poultry farmers in the small West African nation. In 2002 alone, more than 26,000
tonnes (one tonne is roughly the same measurement as a US ton) of chicken was
imported into the country, mostly from the European Union where farmers receive
generous subsidies for their products. In 2004, that figure was estimated to
be as high as 40,000 tonnes.
In 1992 domestic poultry farmers supplied 95 percent of the Ghanaian market,
but by 2001 their market share had shrunk to just 11 percent. The imported chicken
is available (wholesale) at a price that is only slightly more than half of
the wholesale price of local chicken.
The accompanying loss of jobs has also been remarkable. The industry has lost
150 jobs in the past few months alone, say the Farmers Associations. Commercial
poultry farms -- which do not include small rural producers -- employ up to
5,000 people. Any job loss has far reaching implications for Ghana's 20 million
people because each worker often provides support for numerous others in their
Foreign producers currently pay a 20 percent tariff or tax on the poultry they
send to Ghana. Two years ago, the Ghanaian Parliament passed a law allowing
an additional 20 percent tariff to be imposed on imported chicken, bringing
the overall tariffs to 40 per cent.
In a dramatic move, just two months after the law was passed, the Customs and
Excise Preventive Services (CEPS), the body responsible for implementing the
tariffs, issued an order reversing the decision. The new tariffs were said to
be in conflict with regional tariffs. In other words, the proposal have been
blocked by the International Monetary Fund (IMF), an institution in which the
Ghanaian government has less than 0.5 per cent of the vote.
The National Association of Poultry Farmers, a body representing small and
medium-sized local poultry farmers, has cried foul and has taken the CEPS to
court, in order to force application of the law.
But Kumajor and his fellow poultry farmers in Ghana did not know the power
of the IMF. Although it is an unelected body, it can overrule judicial processes
in their country.
The Ghanaian government let go of the new tariffs because it had already reached
an agreement with the Fund to suspend the higher tariffs on poultry during the
government's Article 4 consultations - an annual dialogue the IMF has with member
The IMF made it clear that it was opposed to the higher tariffs on the grounds
that it will hurt Ghana's poverty reduction program. Alphecca Muttardy, the
IMF's current representative in Gahna claimed that Ghana could only increase
the tariffs under a special dispensation provided to successful businesses only.
Speaking to Olivia McDonald from the non-governmental organization (NGO) Christian
Aid in Ghana, Muttardy said, "we pointed it out to government that this
[raising of tariffs] was not a good idea, they reflected on it and we agreed."
"The actions of the government show clearly the desperation with which
they seek to please the World Bank and the IMF," says Dominic Ayine, the
director of the Center for Public Interest Law (CEPIL) and a lawyer representing
the poultry farmers. "The opposition of the Bank and the IMF to increased
tariffs is based on pure ideological reasons and it has little or no connection
at all to the welfare of Ghanaian poultry farmers or the consuming public,"
Moreover, as Ayine argues, the action of the Ghanaian government, under pressure
from the IMF, has greatly undermined the tenets of good governance and the rule
of law, which are said to be promoted by world financial institutions all over
the world. "Overriding a judgment obtained through normal judicial processes
does nothing but undercut the confidence with which citizens perceive the judicial
process," he adds.
In its defense, the government argued that the decision to suspend the increased
tariffs stems from its obligation to adhere to international treaties, referring
to World Trade Organization (WTO) agreements on agriculture which, the government
says prevents it from proceeding with the measure.
But trade experts say the increased tariffs do not breach official WTO agreements.
Under the organization's Agreement on Agriculture(AoA) Ghana's tariffs on agriculture
products can be as high as 90 percent.
The WTO agreement on Subsidies and Countervailing Measures also permits member
countries to impose increased custom duties on products that have been subsidized
in their countries of origin, if such subsidies have caused or threatens injury
to a domestic industry in the importing country. The European Union, the source
of most of the imported chicken provides 43 billion euros to its farmers annually.
Ghana imports almost one third of the EU frozen chicken that goes to Africa.
Cameroon, Togo, Senegal and South Africa are among the other nations receiving
imported frozen chickens and chicken parts. As much as 87 percent of the poultry
in Cameroon, comes from Belgium and Spain. In the case of Senegal, the Netherlands
and Belgium combined account for 60 percent.
In Cameroon, French activists, have taken up their case to lobby the EU for
a better protection of African farmers. And in Senegal, according to reports
by the Agence France Presse (AFP), 40 percent of the nation's poultry farmers
have gone out of business because they are unable to compete with EU imports.
Level Playing Field
There is some question as to whether a 40 percent tariff on the chicken would
actually solve the problem. According "For Richer or Poorer" an April
2004 report released by Christian AID, it was estimated that "tariffs would
need to be 80 percent, four times their current level" to allow local producers
and processors to compete fairly with EU imports," because "European
producers gave enjoyed decades of subsidies, support and protection from their
The world playing field, Domonin Ayine believes, is not even close to level.
"Cut-throat competition is not countenanced anywhere in the world, not
even in the so-called industrialized market economies," he argues. "These
countries have spurned a spider's web of elaborate anti-competition laws to
counteract the effects of anti-competitive market behavior." Kenneth Quartey,
President of the Poultry Farmers Association and the owner of Sydal Farms, agrees.
"You don't build your local industries by opening the floodgates for cheap
imported goods to come and compete with locally produced goods that, through
no fault of the producers, are bound to be more expensive." Quartey says
has 15,000 broilers in his cold store which he is unable to sell.
"It is through no fault of ours that our production costs are high,"
he adds. "Just look at electricity and water tariffs, as well as the price
of petrol and diesel. So, in plain terms, our government is telling us to fold
In fact, most members of the once thriving 400,000 member National Association
of Poultry Farmers have folded up. And Ghana's rice and tomato industries are
All over the capital city, large billboards are advertising American long-grained
rice, which, thanks to huge subsidies from the US government, has displaced
local Ghanaian rice from the shelves. Most of the subsidies are paid to big
rice farmers in states such as Arkansas. According to Oxfam, the British NGO,
one company alone, Ricelands of Arkansas, was the recipient of US federal government
agricultural subsidies totaling $490m between 1995 and 2003.
Ghana was on the way to becoming self-sufficient in rice production in the
1970s and 1980s. But the IMF structural adjustment program halted farm subsidies
to rice farmers. Ghana now produces a mere 150,000 tonnes of rice, or 35 percent
of its domestic need.
No longer able to farm because of the high prices of agriculture inputs, many
young people are flocking to the urban centers searching for non-existent jobs.
More displaced people from the rice and poultry sectors are bound to increase
the numbers drifting to the urban centers, causing social problems. Mr Ernest
Debrah, Minister for Agriculture admits the gravity of the situation and yet
says he does not favor increasing tariffs.
Over-reliance on imported chicken also has its health hazards. The poorly-resourced
Ghanaian health service does not have the capacity to detect and prevent an
outbreak of salmonella which might accompany imported chicken.
In Cameroon, which has been importing frozen poultry for a number of years,
two local associations have studied the quality of product, itself. The Service
of Assistance to Local and Developing Initiatives (SAILD) and the Association
for the Defense of Common Interests (ACDIC) came together in 2004 in the city
of Yaounde with ten participating countries to study a grouping of 200 chicken
samples. 15 percent of it was infested with salmonellae
In a report called "Farming Dynamics," the Belgian NGO SOS Faim reported
on the impacts of the transit of the poultry, which tends to thaw out between
freezing several times from the EU to Africa. According to the report, "Deep
frozen chicken parts have no value with in the EU, as there is no demand and
no market for these products…If traders sell the product in Africa, it
is because the price…is higher than the price offered by pet food producers."
Between a rock and a hard place
On March 18th, the Ghanaian Parliament officially overturned the two-year-old
act to raise tariffs on poultry and rice. Although the act had never been put
in effect, a Ghanaian judge had ruled, just one week earlier, in favor of a
group of farmers trying to force the government to enforce the higher tariffs.
The farmers had brought a case against the government body in charge of enacting
the increase, and Judge Ivy N Ashing-Yakubu had ruled in their favor. When the
act on which it was based was overturned, however, Ashing-yakuba's ruling was
"Her ruling was a historic moment for Ghana," Dominic Ayine told
Christina AID, "because it was the first time that the government was censured
by the courts for not putting into practice what parliament had approved. Her
ruling means that the government has effectively defied the constitution."
Indeed, the Ghanaian government is in a challenging position. By obeying the
dictates of the IMF, it has also drawn the anger of many citizen groups around
the country who have rallied to the cause of the poultry farmers. A sign-on
statement campaign sponsored by the Economic Justice Coalition is trying to
force a parliamentary hearing on the issue and possibly oblige the government
to follow through on its decision to implement the tariff increase. According
to the statement the government should not abdicate its primary responsibility
toward the people of Ghana just to stay within the policy strictures and instructions
of foreign bodies like the World Bank and the IMF.
A number of activists in the EU and elsewhere are also rallying to change policy.
In April, 10 million people in 80 countries came together for the Global Week
of Action. Launched by trade activists world wide, the week sought to highlight
the plight of poor people in developing countries affected by skewed trade rules.
Meanwhile, the poultry farmers and their lawyers have vowed to send the matter
to the Supreme Court, because the they believe the action violates the nation's
Ships laden with frozen chicken sail regularly from the Dutch port of Eemshaven
to Ghana and Nigeria. Packed into the giant containers on board are blue boxes
with frozen chicken gizzards from Zevenhuizen in south Holland, orange boxes with
chicken legs from Nunspeet in
central Holland and yellow boxes full of chicken wings from Epe in northeastern
"We ship more poultry than any other company in Holland," says Jakob
van Bek of Socar, a Dutch company in Lelystad which owns the Eemshaven terminal.
"Every week we send ten to twenty containers of poultry, beef and pork,
each weighing 28 tons. But 80 percent of the meat is
Socar is just one of several traders that buy whole chickens and parts from
Dutch poultry producers to ship to West Africa. They started direct shipments
to Ghana a decade ago, simplifying the export chain for producers like Gecombineerde
Pluimvee Slachterijen (GPS), based in Nunspeet. Today the bulk of the 150,000
chickens that GPS slaughters every day, is exported to other European nations,
while the cheaper cuts are exported to Africa.
"European customers prefer the fillet to the chicken legs because of the
bones," says Patrick Lordet, a French salesman working at the Rotterdam-based
Kühne + Heitz, another large chicken exporter to Ghana. "I prefer
the chicken legs myself but the fillet has a higher sales price." Unlike
Socar, Kühne + Heitz raise their own chicken at five locations around the
Poultry is a huge business in Holland - for every person in the country, there
are roughly five chickens. Although Holland is one of the smallest countries
on the European continent, it is also one of the most densely populated nations
in the world with about 500 people per square kilometer. This adds up to a total
of 16 million people and 80 million chickens in the country.
Almost a third of European poultry exports come from the Holland, according
to statistics published by the Dutch Agricultural Economics Research Institute
(LEI) and Eurostat.
What may seem surprising is that, like Ghana, the number of farms and farmers
in the Netherlands are also declining rapidly. Over the last half century the
number of farms have declined from over 315,000 in 1950 to a quarter that number
today, employing just over three percent of the Dutch population.
The answer to the statistical puzzle is the fact that the chickens are almost
entirely raised by giant agri-businesses and then exported to the rest of Europe
and the world.
Nutreco, one of the world's largest agri-business companies, headquartered
in the tiny town of Boxmeer, with global sales of almost 3.85 billion Euro,
is the biggest producer of chickens in the country. Pingo, the company poultry
division, employs just over 1,000 people.
These companies squeeze thousands of chickens into tiny production facilities,
which is the cause of rapid spread of diseases. The avian flu outbreak in 2003
forced Nutreco alone to slaughter 30 million birds.
Chicken factories are on the way to Africa, however. Indeed, the only poultry
business in Ghana that is expanding is Darko farms, which has set up a joint
venture with Tyson Foods from the United States.
Today the company says it produces five million day-old-chicks, 30 million
table eggs, 780,000 chicken units, and 30,000 tons of animal feed, making it
Ghana's largest fresh poultry producer.
Reverend Kwabena Darko, the principal shareholder in the family enterprise,
says the company has achieved this by introducing new technology. "Previously
we had about 600 staff but for now due to automation, our staff strength has
been reduced. At the moment we are 260," he told World Investment News