By CHRISTIAN KPESESE –
The projected price offer by government for the purchase of sugar cane from farmers to feed the just inaugurated Komenda Sugar Manufacturing Factory poses a great risk to making the facility a viable entity if immediate measures are not put in place to ensure constant supply of raw material (sugar cane) to feed the factory.
President John Dramani Mahama, when inaugurating the facility, announced that a tonne of sugar cane would be purchased from the farmers at the cost of GHC 60 but some industry players say it was too low to keep the farmers in business over a long period.
According to them, farmers would have a greater chance of making better profits from selling their produce on the streets rather than selling them to government at GHC 60 per tonne of sugar cane.
Minority New Patriotic Party (NPP) spokesperson on Trade and Industry, Professor George Yaw Gyan-Baffour at Press conference in Accra last week called on government to learn from the example of a sugar producing country like Kenya and then institute measures to ensure regular supply of the raw material to feed the factory and also protect farmers when sugar cane production falls.
“Government failed to constitute the right fundamentals needed for the full take off of the sugar production factory before rushing to perform the inaugural ceremony,” he lamented.
Among the number of challenges cited by the minority NPP to back their claim include the re-siting of the facility near the sea, which according to them poses greater expensive maintenance cost due to corrosion from the salty sea water.
The party has also accused government of failure to put in place a functional national sugar policy to guarantee constant supply of raw material to feed the factory and the possibility of causing food insecurity due to diversion of large farmlands to only sugar cane production.
Another major concern expressed by the minority was the availability of regular water supply to aid in the production since sugar cane is water dependent. The party alleges the Pra River which is the main water source for the Komenda area is polluted due to activities of illegal miners, hence can negatively affect sugar produce from the factory.
The minority blamed government for its failure fix the collapsed water canal from the river in order to guarantee adequate irrigation of out-grower farms for higher yields.
“The lack of clarity on the presence of a functional management team of the facility and constant power supply to the factory in the wake of increasing tariff regime is also feared to negatively affect smooth operations,” it stated.
In a response to the concerns raised by the NPP Minority, the Ministry of Trade and Industry said it had together with the factory and CEDECOM developed modalities and a proposed competitive price for the purchase of sugar cane from the famers.
Among the measures put in place to ensure sanity in the entire value chain includes the purchase of a metric tonne (MT) of sugar cane at GHc 60 by the factory at the farm gate and an additional fulfillment bonus of GHc10 per MT to the farmers for achieving an agreed and registered quantity of cane supplied.
The farmers would bear the cost of harvesting and binding of their produce and receive one per cent deduction from the gross price on net weight toward binding materials. Transportation from the farm gate to the factory will be the responsibility of Komenda Sugar factory
“Payment on net weight supplied will be done after deduction of any amount advanced to sugarcane farmers. The sugarcane price will be subject to change depending on prevailing sugar and sugarcane market price,” the ministry stated in a statement.
The governments of Ghana and India, acting through the EXIM Bank of India, approved in 2013 $35million for the establishment of a new sugar factory, the Komenda sugar factory and is expected to produce 150,000 metric tonnes of sugar per year, and 1.0MW power.
Meanwhile resuscitated Komenda Sugar Factory will be shut down after six months in operation, Central Region Minister Kweku Ricketts-Hagan has confirmed.
The six-month shutdown is in line with the maintenance programme for the India-Ghana joint facility, he said.
The factory, situated in the Central Region, was commissioned on Monday, May 30 by President John Dramani Mahama.
President Mahama announced to the gathering during the commissioning that 7,300 jobs have been created with the establishment of the factory. He also revealed that two more of such project will be established in the country.
The $24.5 million facility will establish irrigation farms of about 2,000 acres of landspace to serve as the core source of raw materials for the factory.
