GREL accused of attempts to collapse rubber industry

The Rubber Outgrowers and Agents Association (ROAA) has accused the Ghana Rubber Estate Limited (GREL) of deliberate attempts to collapse the rubber industry. The Association claims management of GREL has in recent times taken several decisions, without their involvement, and fears the effect of the decision will be inimical to the survival of the “white gold” industry. At a press conference at Agona Nkwanta in the Ahanta West District of the Western Region, National President of the ROAA Isaac Catro Bosomtwi explained that even though the association is an essential stakeholder in the rubber industry, GREL as the sole buyer and technical operator takes unilateral decisions without considering the effects on them. “On 29th August 2019, GREL issued a letter implementing a quality discount rate for cuplumps, which is the raw rubber farmers supply to their processing factory. Inasmuch as the association supports supply of quality raw material, GREL unilaterally implemented the discount rate without any discussion with the association. Again, on 1st August 2019, GREL went ahead to implement the reduction of the Dry Rubber Content (DRC) from 58% to 57.5% at the blind side of the association after a stalemate. And I must say, this DRC is one of the components in the price mechanism agreed between GREL and ROAA through an MOU signed on 14th June 2014 in which there is a procedure if one wants to change in the price mechanism must comply with. This unilateral decision by GREL resulted in a reduction in the purchase price paid to farmers by GREL.” Mr. Bosomtwi stated that what worsened the already bad treatment to the farmers was the decision by GREL to pay the farmers in 60 days after purchase instead of the long-standing payment arrangement of 24 hours. “On 10th February 2020 GREL issued a letter stating they cannot pay suppliers of cuplumps within 24 hours. They will rather pay within 60 days with immediate effect. And without any meeting with us they have implemented this.” According to him, the reason GREL gave for the change in the payment time is because the Corona Virus has affected the tyre manufacturers in China and Malaysia. “The question all of us are asking is that is GREL supplying only to Asia. We know that Michelin is a major shareholder of GREL buying a lot of rubber from them. Is GREL saying that Michelin is only manufacturing tyres in China,” he questioned.

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Consequences of ‘unilateral’ decision Isaac Castro Bosomtwi explained that farmers were in production when the recent management decisions were taken therefore the consequences on them will be dire. “Now, tappers are chasing the farm owners for their payment for work done. But the owners do not have money because the payment has moved from 24 hours to 60 days. In view of the pressure from the tappers, most of the farm owners are resorting to side sellers at lower price of from GH¢ 2.70 to GH¢2.20 per kilogramme. The weighing scales of the side buyers have not been certified by Ghana Standard Authority. Hence our members are losing from the reduced price and reduced weight.” He blamed GREL for the farmers’ decision to sell the rubber to side buyers because they want to solve the undue pressure from the tappers and also enable them – farm owners – stay in business. “Unfortunately, the side buyers do not have the financial muscles to buy the cuplumps from the farmers hence farmers are forced to send the product to GREL for the 60-day payment. How many of our farmers can survive this period of pain. Again, by the decision of GREL the repayment of the loan to the banks is stalled. What’s more, the farmer is going to suffer from the banks by paying penal interest on delayed payment.” He mentioned that on 13th February, 2020, the association wrote to GREL asking for a stakeholders meeting to discuss the implications of their decision on other stakeholders but up till now GREL has not responded to the call for a meeting. “Is it because GREL has a French company called Societie Internationale de Plantations d’Hevea (SIPH) that is listed on the Paris Stock Exchange and has its majority shareholding in GREL that is why AfD has kept mute. We are at our wits end why the two banks have also not responded. Maybe because of the penal interest they charge the farmer on delayed payment, they seem to be ok. If that is their thinking then it is a sad day for Ghana,” Mr Bosomtwi said He also wondered why the relevant government agencies have not reacted to their calls on them to turn their attention to the rubber industry. “This is a deliberate attempt to collapse the rubber industry in Ghana and bring the government into disrepute… Again, we know very well that this government is steadfastly making all efforts to uplift the rubber production under the Planting for Export and Rural Development (PERD) programme and this unilateral decision by GREL can jeopardize the rubber component under PERD.” The Rubber Outgrowers and Agents Association represents the majority of farmers in Western, Central and parts of Ashanti region with a membership strength of over 8,000.
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By Eric Yaw Adjei||Ghana]]>