RICE PRODUCTION IN GHANA: PAST, PRESENT AND FUTURE.DRIVING FORCES AND REQUIRED ACTIONS

BOANSI DAVID

BACKGROUND

• RICE, FOOD FOR THE PEOPLE

• RICE, SOURCE OF LIVELIHOOD THROUGH PRODUCTION & MARKETING

• RICE AS A POLITICAL CROP IN GHANA AND MOST WEST AFRICAN COUNTRIES

MOTIVATION/PROBLEM STATEMENT

CHANGING CONSUMER PREFERENCES: INCREASING CONSUMPTION

PRODUCTION LESS THAN 40% OF DEMAND AND NATIONAL SUPPLY (Olaf and Emmanuel, 2009; Lançon and Hélène, 2007)

INFLUX OF IMPORTED RICE, HIGH PRICES OF IMPORTED AGRICULTURAL INPUTS ⇒ NEGATIVE RETURNS ⇒ 66% OF RICE PRODUCERS (FAO, 2006)

DRIFT FROM RICE PRODUCTION; LIMITED REPLACEMENT FOR AGING FARMERS ⇒ EXPOSURE OF GHANA TO SHOCKS ON WORLD MARKET

IRREGULAR SUPPLY OF LOCAL RICE LOW QUALITY

OBJECTIVE

TO IDENTIFY AND MEASURE THE MAGNITUDE OF EFFECT OF THE KEY ECONOMIC DETERMINANTS OF LOCAL RICE PRODUCTION IN GHANA

PERFORMANCE IN MEETING SUPPLY AND DEMAND

ASSESS DEVELOPMENTS IN PADDY PRODUCTION, HARVESTED AREA AND YIELD

ESTIMATION OF LONG-RUN RELATIONSHIPS (COINTEGRATING REGRESSION –FMOLS)

ESTIMATION OF SHORT-RUN EFFECTS (ERROR CORRECTION MODEL)

RICE PRODUCTION AND SUPPLY IN GHANA, 1961-2012

RICE SELF-SUFFICIENCY FOR GHANA, 1961-2009

DEVELOPMENTS IN RICE PRODUCTION : TRENDS RICE PLANNING

TRENDS

0

0,5

1

1,5

2

2,5

3

0

100

200

300

400

500

60019

6119

6319

6519

6719

6919

7119

7319

7519

7719

7919

8119

8319

8519

8719

8919

9119

9319

9519

9719

9920

0120

0320

0520

0720

0920

11

Yie

ld,

t/ha

Pad

dy P

rodu

ctio

n an

d A

rea,

000

t

Year

Production (000 t)

Harvested area (000 Ha)

Yield (t/Ha)

RICE PLANNING

Output =AREA * YIELD

RICE MARKET STRUCTURE

DATA AND METHODS ⇒METHODOLOGY

VARIABLES:

DEPENDENT VARIABLE INDEPENDENT VARIABLES

*TOTAL PADDY OUTPUT *HARVESTED RICE AREA

*YIELD

*REAL PRODUCER PRICE OF RICE

*REAL PRODUCER PRICE OF MAIZE

* WORLD PRICE OF UREA FERTILIZER (P)

*IRRIGATED AGRICULTURAL AREA (P)

*AGRICULTURAL LABOUR FORCE (P)

HYPOTHESIS

Log TPOt =β0 + β1 Log HAt-1 + β2 LogYt-1 + β3 Log RPPRt-1+ β4 Log RPPMt-1 + β5 Log

PUFt + β6 LogIRAt + β7 Log ALt + µt

Hypothesis: β1, β2, β3, β6, β7 > 0; β4, β5 <0;

ESTIMATOR : FULLY MODIFIED ORDINARY LEAST SQUARES

* COINTEGRATING REGRESSION: LONG-RUN EFFECTS

* ERROR CORRECTION MODEL: SHORT-RUN EFFECTS AND S.O.A.O.S

MODELS

DATA PREPARATION

GROUP TEST FOR NORMALITY

  LTPO LHA LY LRPPR LRPPM LPUF LIRA LAL

Mean 4.9205 4.5426 0.3784 5.8121 5.4421 5.0466 3.2487 8.2681

Median 5.0401 4.6001 0.5098 5.8898 5.3820 5.0203 3.4012 8.2234

Max. 6.1985 5.1930 1.0043 6.4088 6.3557 6.2000 3.5264 8.7119

Min. 3.5835 3.6889 -0.5276 4.9972 4.7920 4.1897 2.7081 7.9128

Std.Dev. 0.6678 0.3199 0.4323 0.3527 0.3471 0.4127 0.2261 0.2506

Skewness -0.1271 -0.4594 -0.3763 -0.4175 0.7533 0.4758 -0.6961 0.2684

Kurtosis 1.9710 3.0817 1.7068 2.3663 3.7127 3.3345 2.0538 1.6741

Jarque-B. 1.7788 1.3474 3.5447 1.7396 4.3978 1.6109 4.4866 3.2400

Prob. 0.4109 0.5098 0.1699 0.4190 0.1109 0.4469 0.1061 0.1979

Sum 186.9790 172.6157 14.3799 220.8587 206.8011 191.7690 123.4488 314.1878

Sum.Sq.D 16.5028 3.7856 6.9154 4.6034 4.4580 6.3029 1.8912 2.3238

Obs 38 38 38 38 38 38 38 38

UNIT ROOT TEST AT LEVEL

UNIT ROOT TEST AT FIRST DIFFERENCE

MODELS AND RESULTS

MODEL 1 COINTEGRATING REGRESSION

Log TPOt =β0 + β1 Log HAt-1 + β2 LogYt-1 + β3 Log PUFt+ β4 LogIRAt + β5 Log ALt + µt

 

Hypothesis: β1, β2, β4, β5 > 0 : β3 < 0

RESULTS

Variable Coefficient Std. Error t-Statistic Prob.

LHA (-1) 0.101992 0.144533 0.705668 0.4858

LY (-1) 0.451116 0.168657 2.674758 0.0120

LPUF -0.021379 0.089340 -0.239301 0.8125

LIRA 0.249820 0.352111 0.709492 0.4835

LAL 1.461326 0.371715 3.931308 0.0005

C -8.472846 2.232593 -3.795069 0.0007

R-squared 0.839266 Durbin-Watson stat 1.925412Adjusted R-squared 0.812477 Long-run variance 0.036138S.E. of regression 0.290031

TEST FOR COINTEGRATION AND NORMALITY OF RESIDUAL

Cointegrated Test- Phillips-Ouliaris ; H0: Series are not cointegrated

Phillips-Ouliaris tau-statistic -5.690282 Prob* 0.0190Phillips-Ouliaris z-statistic -31.30937 0.0445

Cointegration Test- Park Added Variables (L. trend) ; H0: Series are cointegrated

Chi-square value 1.320867 df(1) Prob. 0.2504

ADF Unit Root Test on Residual ; Residual has a unit root

ADF test statistic -5.081128 Prob. 0.0002

Jarque-Bera 0.923407 Prob. 0.630209

MODEL 2 ERROR CORRECTION MODEL

REFERENCES

Olaf, K. and Emmanuel, D. (2009). Global Food Security Response: Ghana Rice Study. Attachment I to the Global Food Security Response West African Rice Value Chain Analysis. microREPORT#156, USAID

LanÇon, F. and Hélène, D.B. (2007). Rice imports in West Africa: trade regimes and food policy formulation. Poster prepared for presentation at the 106th Seminar of the EAAE. Pro-poor development in low income countries. Food, agriculture, trade and environment. 25-27 October 2007-Montpellier France

FAO (2006). Briefs on Import Surges –Countries. No. 5, Ghana: rice, poultry and tomato paste. November 2006. Commodities and Trade Division, Food and Agriculture Organization of the United Nations, Rome, Italy. ftp://ftp.fao.org/docrep/fao/009/ah628e/ah628e00.pdf