GREL accused of exploitation; Outgrowers anxious of its collapse

The Ghana Rubber Estate Limited has been accused of excessive exploitation of farmers, whose produce feed their factory. The farmers’ recognised body; Rubber Outgrowers and Agents Association (ROAA), fear the exploitation meted out at farmer’s, if unchecked could result to the collapse of the industry and GREL.
Concerns expressed by the group, indicate that management of the company have been imposing and unilateral in decisions that required the attention and input of the collective.

ROAA recounting a series of biased decisions taken by management of GREL in recent times, and the negative repercussions on farmers took to the press to seek some audience with government. National Chair of ROAA, Isaac Castro Bosomtwe at the press conference held in Agona Nkwanta in the Ahanta West District, said the conduct of management had mar the relationship with stakeholders.

“GREL Management over the years have been very supportive to rubber farmers. Unfortunately, for the past few years under a new Managing Director, that cordial relationship has been destroyed by the present Management by virtue of its  dictatorship style. We are stakeholders in the rubber industry but GREL being the buyer and Technical Operator takes unilateral decisions without considering its effect on the other stakeholders” he said.

Mr. Bosomtwe claimed that GREL in months past implemented a Quality Discount state for raw rubber, reduced the Dry Rubber Content by 0.5% of the existing rate without any engagement whatsoever, with ROAA.

“On 29th August 2019, GREL issued a letter implementing a quality discount rate for cuplumps (raw rubber) farmers supply to their processing factory . In as much as ROAA supports supply of quality raw material, GREL unilaterally implemented the discount rate without any discussions with ROAA.

“In 1st August 2019, GREL again 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. This is one of the components in the price mechanism agreed between GREL and ROAA through a Memorandum of Understanding signed on 14th June 2014 in which there is a procedure if one party wants a change in the price mechanism. This unilateral decision by GREL resulted in a reduction in the purchase price paid to farmers by GREL” he stated.

Mr Bosomtwe continued that, on February 10 this year, GREL unilaterally altered an agreed payment plan which readily assured of a 24 hour payment for supplies [cuplumps] from farmers or suppliers, to a 60 day schedule.

“Their reason for this inhuman decision is that the Corona Virus has affected the tyre manufacturers in China & Malaysia .

“There was no meeting to discuss the implication of that decision on other stakeholders. The other stakeholders are the Ministry of Food and Agriculture, Ministry of Trade and Industries, Ministry of Finance, Agence Fracais de Development – French Development Agency (AfD) German Development Cooperation (KfW) ,ADB and NIB” he narrated.

Despite these unsolicited changes, the group [ROAA] wrote to the company seeking audience on the implication of such decisions. ROAA’s letter dated 13 February, 2020, and issued to GREL, according to National Chair, has received no response from management.

“This is typical of the Management style” Mr. Bosomtwe cried.

But this doesn’t end here. The poor farmers are made to bear extra fees and penalties for loans contracted from banks, due to GREL’s reluctance to transfer monies deducted from the income of these farmers to the banks.

“Per the Tripartite Agreement GREL is to deduct 25% of the income from farmers’ products sent to GREL for loan repayment GREL has religiously performed this task but it does not immediately, transfer the monies deducted for loan repayments to the banks . Therefore, the banks charge the farmers penal interest for an offence they have not committed. GREL delays payment to the banks and the farmers are penalised” Mr Bosomtwe emphasized.

The undesired consequences

Mr Bosomtwe disclosed that farmers are now overwhelmed by the demands from tappers, for payment of work done in their plantations. This, according to the National Chair, has compelled farmers to discount their produce by 50 pesewas per kilogramme, to ‘side-sellers’. GREL upon learning of these dealings filed a suit against farmers who engaged in such trade, a situation ROAA finds morally unright.

The vast majority who run out of options in terms of finding value for their produce, run to GREL under the very terms they protested.

“Poor rubber farmers are financing GREL because we know that in the rubber industry when you sell processed rubber it takes between 45 days to 60 days before one is paid . That is why GREL quoted 60 days, so what is happening is that not until GREL is paid, the supplier (i.e farmer) is also not paid. This is a pure multinational bent on cheating farmers in a cunning manner” Mr Bosomtwe lamented.

ROAA prayed that government intervenes in the matter, lest risk having its rubber component under the Planting for Export and Rural Development, suffer a major setback.

“Again we know very well that this Government is steadfastly making all efforts to uplift Rubber Production under the Planting for Export and Rural Development (PERO) programme and this unilateral decision by GREL can jeopardize the rubber component under PERO” the Chair stated.

Mr. Bosomtwe threatened that government might find itself to blame in the coming election, should they fail to address the matter.

The Rubber Outgrowers and Agents Association with a member of over eight thousand farmers,represents a vast majority of farmers in Western, Central and parts of Ashanti Region.