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Wednesday, June 12, 2024

Editorial: Keeping Rice Prices Stable in Liberia: A Misguided Approach

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Liberian President Joseph Boakai’s latest efforts to stabilize the price of rice, the country’s staple food, seem to be missing the mark. His strategy of pleading with India to relax its export taxes and ban on rice shipments is unlikely to provide the long-term solution that Liberians desperately need.

The core issues besetting Liberia’s rice industry go far deeper than just the challenges posed by India’s trade policies. President Boakai would be better served by focusing his attention on addressing the deep-rooted problems within his own country’s rice sector.

For one, the rampant corruption and bureaucratic red tape that have long plagued Liberia’s rice industry must be tackled head-on. Certain public officials, former and current are reportedly receiving kickbacks from rice importers, distorting the market and keeping prices artificially high for consumers.

Eliminating these corrupt practices would be a crucial first step in creating a more transparent and competitive rice trade.

Furthermore, the high barriers to entry in Liberia’s rice industry have fostered an oligopolistic market, with a handful of importers wielding outsized influence.

These powerful foreign rice importers operating in Liberia with the aid of officials have earned huge fortune in decades via a scheme that beats away competitors mainly Liberians leaving them as the sole lords in a multimillion-dollar market.

Rice is Liberia staple food. About 300,000 metric tons or 12,000,000 (twelve million) bags are consumed yearly, according to the Ministry of Commerce and Industry. This means if a bag is sold at the minimum price of $20 United States dollars, the cartel (a group of four foreign importers) will be reaping a massive $240,000,000 (two hundred and forty million United States dollars in 12 months.

President Boakai should work to open up the market, introducing policies and subsidies that encourage new players to enter the fray. This would help drive down prices through increased competition.

Equally important is the need to address the country’s dietary preferences, which must change amidst global challenges including wars and climate change.

Liberians’ tastes should evolve and they must seek out more diverse food options. In this direction,  the government should invest in policies that promote food substitution and diversification.

This could include supporting the production and distribution of alternative staple crops, as well as educating the public on nutritious and affordable alternatives to rice.

President Boakai’s efforts to engage with India are understandable, yet a distraction from the real work that needs to be done at home.

Rice Production and pricing are underpinned by global phenomena.

Global rice shortage is anticipated amid rising geopolitical tensions and commodity prices. To safeguard domestic consumers from exorbitant price shocks, India has banned the export of non-basmati white rice since July 2023

Thai rice price has risen 14%, Viet Nam rice prices are up 22%, and India white rice prices are up 12%. In August 2023, in an effort to prevent exporters from undermining the ban, India put a surcharge of 20% on exports of parboiled rice and instituted a minimum sales price for basmati rice. Myanmar, the world’s fifth largest rice exporter, announced that it too would ban rice exports for 45 days. On September 1, the Philippines put price ceilings in place to cap retail rice prices

Tackling corruption, lowering barriers to entry, and encouraging dietary diversification, the Liberian government can take meaningful steps towards ensuring that rice remains accessible and affordable for all. Anything short of this comprehensive approach is unlikely to yield the desired results. This is the Opinion of the Oracle!

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