At the local market

“If I had my own way, I'd stop US rice coming into the country – and, I tell you, if it didn't come in, we would have prospered and we'd be out of poverty,”
says rice farmer Al-Hassan Abukari Gyebila.

Al-Hassan owns less than one hectare of land, in Zugu village, northern Ghana. He earns $215 from his annual harvest of 27 bags (100kg each) – 60 per cent of his family's income. "It's our most important crop", he explains.

"We sell it to pay for all the things we need for the household." Nine bags pay for his sons, Yakubu (18) and Adamu (10), to go to school. And a bag paid for transport, hospital fees, and medicine, when Adamu became sick recently.

In the mid-1970s, Ghana's rice industry supplied all the rice needed to meet national demand. It could still provide the bulk of it today. But harsh conditions imposed by the IMF and World Bank – in return for loans – allow an ever-increasing torrent of unnecessary imports. Ghana's parliament tried raise the tariff, but was forced to back down by the IMF. Now, at Ghana's markets, customers often ignore the huge bowlfuls of nutritious locally grown brown rice on display. Instead, they buy from nearby shops that are stacked to the ceiling with sacks of cheap white rice from the USA, heavily subsidised by the US government. US farmers receive around $232 per hectare in government subsidies – more than Al-Hassan's annual income. It's no wonder that farmers like him are unable to compete.

Making trade work for poor people

In the 1970s, the Indonesian government channelled some of its oil revenues into building the country's rice sector. It wanted to reduce dependence on food imports and to promote rural growth – and it succeeded. The state-run commodity agency provided floor and ceiling prices for rough rice, and carefully controlled imports. This kept supplies stable and affordable for consumers, and protected producers from low and uncertain international prices. The government also invested heavily in irrigation infrastructure, high-yielding and pest-resistant seeds, fertiliser, and affordable credit to small-scale farmers. By the mid 1980s, production had reached near self-sufficiency. The success of Indonesia's rice policies increased the country's food supply, and boosted incomes in millions of rural households. Nationwide, the number of people living in poverty halved between 1976 and 1993.

Despite problems, Indonesia's experience shows that effective state investment in agriculture, coupled with policies to regulate trade, can drive national growth and development.

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