will growing sub-saharan african rice production reduce

F.Lançon - CIRAD - World Rice Conference 2009 1

Will Growing Sub-Saharan African Rice Production Reduce

Imports?

Frédéric LançonARENA research unitCIRAD

World Rice Conference 2009Oct. 27-29 Cebu, PhilippinesShangri-La's Mactan Resort

[email protected] de coopérationinternationale en rechercheagronomique pour le développement


Plan of the presentation

1. The Recurring Sub-Saharan (SSA) rice challenge

2. Determining factors for promoting rice production development


1. The Recurring Sub-Saharan rice challenge


A renewed agenda for rice in SSA

Rice price surge put several SSA governments in a difficult political position:

Not able to ensure a steady supply of rice at affordable price.Limited capacity to address the issue at short term:

• Tariff and tax revision• Budgetary constraints

Renewed interest for expanding rice production since rice world market evolutions are unpredictable


Beyond the short term perspective…

Social unrests were not necessarily triggered by rice price increase on the world market.

Delay in transmission of priceSeveral countries had already considered revising their rice trade policy before the price surge:

Common Exterior Tariff negotiation within Economic Community of West African Sate


Rice price was not necessarily the triggering factor for political tensions

0

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06-20

0708

-2007

10-20

0712

-2007

02-20

0804

-2008

06-20

0808

-2008

10-20

0812

-2008

02-20

0904

-2009

CFA

per

kg

of ri

ce

Retail price DakarThai A1 CIF price Dakar

PoliticalTurmoil in

Dakar


The end of the cheap rice era?

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1000

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0

100

200

300

400

500

600

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800

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Rice 25% (USD/ton)Rice Import (‘000 Tons)


Supply and demand trends (1990-2007)

Total SSA production increased at 4.8% per year:

Mostly because of area expansion: 3.8%Limited contribution of yield increase: 1%

Total SSA consumption increased at 5.4% per year due to:

Population growth: 2.5%And per capita consumption growth: 2.9%


Emerging markets and import dependency

Angola

BeninBurkina Faso

Cameroon

ChadCongo,

Côte d'Ivoire

Gambia

Ghana

GuineaGuinea-Bissau

KenyaLiberia

MadagascarMalawi Mali

MozambiqueNiger

Nigeria

Senegal

Sierra Leone

South Africa

Sudan

Tanzania

Togo

Zambia

0%

20%

40%

60%

80%

100%

120%

0 20 40 60 80 100 120 140

Per capita consumption (kg)

Import share in total supply

%


An accelerated rice growth in East Africa, but…

0%1%2%3%4%5%6%7%8%9%

Growth rate

1990 - 19992000 - 2007-9%

-7%-5%-3%-1%1%3%5%7%9%

Western Eastern Middle Southern

Total Consumption

Production


….West Africa is still dominant

Total production: 14 200 000 tons

Average values 2000 -2009FAOSTAT

Western63%

Eastern25%

Middle6%

Southern6%

Western66%

Eastern15%

Middle8%

Southern11%

Total imports: 7 200 000 tons


A widening gap between supply and demand

0

5

10

15

20

25

1990 1992 1994 1996 1998 2000 2002 2004 2006

Year

Kg per capita

Imports

Production

Consumption

Projecting the current trend SSA would have to import 16MT of rice by 2019!


Is per capita rice consumption growth reversible?

Example of CFA devaluation:Reduction of other staple and side dishes.

Substitution with other staples is limited due:to the higher convenience of rice compared to other

staples,unstable supply in urban markets of locally produced

staples.

Focus should be put on rice domestic supply and diet diversification.


1. The Recurring Sub-Saharan rice challenge

2. Determining factors for promoting rice production development.


Determining factors for a Sub-Saharan Rice Strategy

1. Technology development2. Cost-effectiveness of proposed

technical solutions: the macro-economic setting.

3. Institutional changes and enabling environment for building a competitive market for local rice.


Managing a wide range of rice cropping systems

Water table

-Dry Land-Rainfed

-HydromorphIc - Low Land - Swamp-Flooded

-Simple low land

-Improved low-land

- Irrigated

source: WARDA – 1999


Non-irrigated systems are dominant

Agro- ecologicalzones Swamp Flooded Irrigated

Inlandvalley Rainfed Total

Savana and Sahel 0.1% 4.5% 7.5% 1.8% 0.2% 14.1%Humid 3.1% 3.7% 3.1% 28.3% 47.8% 85.9%Total 3.2% 8.1% 10.6% 30.1% 48.0% 100.0%

Savana and Sahel 0.2% 2.7% 20.4% 2.2% 0.1% 25.5%Humid 3.7% 2.2% 5.6% 34.1% 28.9% 74.5%Total 3.9% 4.9% 25.9% 36.3% 29.0% 100.0%

Areas

Production

West Africa

Source, WARDA, 1998


Technology development

It is a challenging task (long term)Promising opportunities provided by the dissemination of the NERICA (New Rice for Africa)Other technologies have been developed for improving , pest and crop management.

Yet, other determining factors may hindered the SSA countries capacities to benefit from the NERICA


CASAMANCE

RIVER SENEGAL

0,9

SIERRA LEONE NORTH

SIERRA LEONE SOUTH

CdI NORTH

CdI N- WEST

CdI WEST

CdI S-WEST

OFFICE DU NIGERMOPTI

SIKASSO

NIGER

Rice variable comparative advantages across West Africa


Cost effective technical solution

Largely determined by:Yield achievedPrevailing price on the world market

Better prospects for cost-effective technologies

Several ecologies are achieving better economic performance.Comparative advantage threshold is about USD 300 to USD 350 per ton of rice, FOB Bangkok.


Northern

A segmented market: high transportation and transaction costs

World market

Ghana rice market spatial configuration based on estimated local and imported rice flows

Sources: IRAM, 2007


West African Consumers justifications for purchasing imported rice

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

COTE D’IVOIRE NIGERIA

Other organolepticproperties

Nutritious properties

Taste

Cooking easiness

Swelling capacity

Cleanliness and appearance

Availability

Price

Percentage of responses

Increasing consumers’ awareness for quality

Sources: WARDA- Africa Rice Centre, 2001 and 2003

Import price < local price Import price > local price


Unstable political and institutional environment

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Prod

uctio

n '0

00 to

ns

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Impo

rt '0

00 to

ns

PRODUCTION

IMPORTATION

BADEGI RESEARCH STATION

NAFPP

NSSOFN

RIVER BASIN DEVELOPMENT AUTHORITIES

ADP |Special rice program

NIGERIAN GRAIN BOARD

66% taxes 10-20% taxes Import licences IMPORT BAN 100%

50 %

SAP

Fixed Exchange rate Floating Exchange rate

Fertilizer Subsidy

BANPRE- BAN CRISIS POST- BAN


Concluding remarks

Rice development in SSA remains a major challenge:Although: (+ + +)

Proven and promising technologies have been developed.The macro-economic setting is more favorable than in the past decadesPolicy makers and donors are more sensitive to the issue

Yet: ( - - - -)Weak market linkages and institutions do not provide a competitive hedge to local rice production.Quick technical integrated solution such as large scale agro-industrial rice scheme might not feasible or sustainableIt requires a long term commitment from decision makers.

If consumption expand at the same pace, stabilizing rice import volume would be an significant achievement.


Thank you


Mature and emerging markets

Angola

Benin

Burkina FasoCameroon

Chad

Congo,

Côte d'Ivoire

Gambia

GhanaGuinea

Guinea-BissauKenya

LiberiaMadagascar

Malawi

MaliMozambique

Niger

Nigeria

Senegal

Sierra LeoneSouth AfricaSudan

Tanzania

Togo

Zambia

-10%

-5%

0%

5%

10%

15%

20%

25%

0 20 40 60 80 100 120 140Per capita consumption (kg)

Per capita cons. growth rate

% per year


A contrasted situation across the sub-continent

Index value0.30 - 0.60 (9)0.15 - 0.30 (10)0.10 - 0.15 (15)0.00 - 0.10 (9)

Index value0.30 - 0.60 (9)0.15 - 0.30 (10)0.10 - 0.15 (15)0.00 - 0.10 (9)

source: WARDA – 2001


Diversity at a regional scale

Production share‘000 tons

250125

25

IrriagtedSwampFloodedLow-landDryland source: FAO and WARDA – 1997

will growing sub-saharan african rice production reduce

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