Liberia: Drop Import Permit Declarations (IPDs) and Open Rice Market to All

Bags of rice.

SHORTLY AFTER ASSUMING the Liberian presidency in 2006, Ellen Johnson-Sirleaf came under fire from critics, including many from the current ruling Coalition for Democratic Change, then the Congress for Democratic Change over a decision to give rice monopoly to Sinkor Trading Company, believed to be owned at the time by Mr. Allen Brown, who was believed to be one of Sirleaf's major campaign financiers.

THE DECISION put an abrupt halt to the lucrative rice empire of George Haddah, K &K, and other importers of rice from importing and otherwise dealing in rice in Liberia.

HADDAH AND OTHERS were accused of having alleged close ties with former President Charles Taylor.

ACAROUS MOSES GRAY, then a Senior Executive of the CDC, now representing District No. 8 Montserrado County went as far as to publicly denounce the inauguration of Sirleaf, who he described as "an unpopular President".

GRAY WENT on to remind President Sirleaf of her campaign promises of a free market, instead of flooding the rice market with what he termed as "political midfielders" such as: Mr. John Bestman, Abdallah Sherif, and Allen Brown, among others.

LIBERTY PARTY, another opposition political institution would later slam the Sirleaf government for allegedly accumulating millions by exploiting the poor Liberian people by phasing Sinkor Trading out of the rice business and arranging an oligopoly of John Bestman, her campaign manager and senior executive of Unity Party, and other members of Unity Party and her friends and supporters to dominate the rice market.

TODAY, MUCH of the criticisms of the past appear to be coming full circle or simply falling by the wayside and it was no coincidence that Mr. Bestman was amongst those in attendance when rice importers met with President Weah has week.

IN THE LAST 48 HOURS, the new government headed by George Manneh Weah has released photos of meetings with foreign rice importers with statements suggesting that efforts are underway to ensure the price of the nation's staple food is substantially reduced and made affordable for ordinary Liberians. "I am ready to work with you and resolve all the issues that underpin the galloping price of rice so that our people will afford to buy," President Weah told Association of Rice Importers today in the presence of Commerce and Industry Minister Designate Prof. Wilson Tarpeh.

AFTER TWO DAYS of meeting with rice importers, the Executive Mansion announced that President Weah had negotiated a reduction in the price of a 25kg bag by two United States Dollars while the price of a 50kg bag is reduced by US$4.

THE MANSION STATEMENT went on to say that President Weah had earlier proposed a reduction of US$3.00 but due to some constraints proffered by "rice moguls", it was agreed that the US$3 reduction from the cost of a 25kg bag of rice would not be possible immediately, but that it could still be possible in the future once a few challenges facing the rice market were addressed and the modalities worked out.

THE President DID not stop there and went as far as to pledge tax reduction for importers, something many other Liberian-owned businesses have not been lucky to benefit from. Today, scores of containers have been abandoned at the Freeport of Monrovia by struggling Liberians living and working in the Diaspora as well as those in Liberia, but simply could not benefit from tax breaks foreign business owners enjoy.

SAID THE President: "If government-imposed tax is an issue, you can rest assure that my government is more than ready to grant reasonable adjustments in the tax regime to make the reduction of rice price possible."

WHILE WE APPLAUD any effort to alleviate suffering on the Liberian people, we find it disturbing that the new government's most pressing concerns is to focus on rice importation and the foreign-dominated retailers' cartel, while offering very little in terms of addressing the plight of local farmers and efforts to increase local production of rice and other foods.

WE FIND IT TROUBLING ALSO that the new government has said and done nothing to address the plight of farmers or a plan to encourage mass production and export of locally-produced rice which is even much healthier than the many substandard rice the so-called cartel, have been importing to Liberia.

WE FIND IT MUCH more troubling that the new government has said nothing about what it intends to do with the controversial Import Permit Declarations or IPDs which has been one of the major bottlenecks deterring local business people from even attempting to enter the rice importation business.

INSTEAD OF FOCUSSING on a cartel of rice importers, and limiting the entire country at their mercies, the Weah-led government must immediately begin working toward improving the regular import of rice by encouraging competition and widening the number of traders able to access Import Permit Declarations (IPDs).

WHAT THE NEW government which ran on the mantra of "Change for Hope", should be doing is to begin pursuing long-term supply agreements with friendly neighboring governments in a bid to guarantee at least a minimum quantity of butter rice at a price not to exceed a maximum price as defined in the agreement.

WHAT WOULD BE EVEN BETTER is for the Weah-led government to remove the IPD and allow both Liberians and foreign businesses people to compete fairly to bring in rice and let the market forces determine the price.

THIS WAS ONE OF THE MAJOR impediment of the previous government which stifled calls to drop the IPD's allowing an entire nation to lean on a cartel of foreign rice importers who dictate the market price for the country's staple food.

IT WAS WRONG WHEN the Sirleaf government gave importation monopoly to Allen Brown and others, and it is wrong now.

President WEAH must work to ensure that the pro poor governance he stressed in his inaugural address is implemented to the core and forcefully ensure that his pledge to stamp out corruption, transform the economy and 'construct the greatest machinery of pro-poor governance in the history of this country' is enforced.

THE IPD SETUP is a recipe for failure and corruption. By putting a simple but critical step in the process for rice importation in the hands of one or two ministers, Mr. Weah is following a pattern that drew massive criticisms toward his predecessor and goes against everything preached in his party's Change for Hope argument.

THE WEAH-LED GOVERNMENT must simply leave the market open so everyone and anyone can bring in rice. Those who can make profit under that regime will continue to import because it is a political commodity. But focussing too much on a cartel, protects a few and goes against the argument that Liberians will not be spectators in the new political arrangement.

WEAH SAID it best in his inaugural address, as he indicated that Liberian owned businesses will not be marginalized but given equal opportunities with foreign businesses or investors during his administration. "As we open our doors to all foreign direct investments, we will not permit Liberian-owned businesses to be marginalized. We cannot remain spectators in our own economy," President Weah said in January.

FOR TOO LONG, Liberians have relied on rice imports. Butter rice, according to the Food and Agriculture Organization (FAO) is consumed by 85 percent of households and is more important compared to local rice among urban consumers and among less poor households.

WEAH AND HIS government must understand that measures to reduce prices in imported rice will for a short while, have important distributional impacts that may not necessarily favor the poorest among Liberia's population.

THE QUESTION WE SHOULD be asking now is, how will these reduced prices affect those in rural Liberia where transportation costs affect the overall prices of not just rice but a lot of other goods. Will those in rural Liberia benefit from this supposed price reduction? Who will monitor and ensure that they do? The same Commerce Ministry that has been unable in the last decade to enforce prices in just the capital city alone?

A COUNTRY consistently reliant on foreign aid must begin to think outside the box and revisit interests in the agriculture sector especially in the wake of declining prices in once-profitable mineral and natural resources. We must begin to empower our own people and make them believe in the value of hard work and not men and those at the helm of power.

WE HAVE THE SOIL and a lot of unemployed people who should be put to work.

THE TRUTH OF THE MATTER IS, if the market forces freely decide the price of rice by allowing a lot of local and foreign businesses to compete and bring in rice, President Weah and the CDC-led government will have a pro-poor government on a silver platter and be on their way to addressing a major political hurdle that has dogged Liberia for nearly a century and sparked a 1979 rice riots that offers a chilling reminder of how a simple bread and butter issue can turn the tide of a nation forever stained in corruption, greed and ignorance.

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