THE CONFIGURATION OF COMPARATIVE ADVANTATE IN RICE PRODUCTION IN WEST AFRICA

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THE CONFIGURATION OF COMPARATIVE ADVANTATE IN
RICE PRODUCTION IN WEST AFRICA

• Patrick Kormawa (WARDA, Cotonou) and Tunji Akande
  (NISER, Ibadan)

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INTRODUCTION

• Agriculture is the heart of West African economy
  70 of population live on it
• Instrumental value of agriculture at independence
  
• Employment
• Income
• Import substitution

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New functions of agriculture

• Food
• Fibre
• Income
• Employment
• Export earnings through value added activities
• Poverty alleviation

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Food is a problem in West Africa

• Supply and demand gaps in food exist
• Food prices are high
• Imports are inevitable
• Food-related infant ailments are rive
• Poor nutrition leads to poor productivity
• Food security is illusory

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Rice has now become prominent in West African
economy and society

• Demand for rice is growing at about 5 per annum
  faster than for any other grain
• Rice imports is growing at 8 per annum
• Rice is now food for both rich and poor
• Increasing demand due to
• Urbanisation
• Changing life style
• Changing work patterns
• Rice availability and prices impact on the
  welfare of the poor.

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Objective of the paper

• This paper reviews studies which assessed
  comparative advantage in the production of rice
  in West Africa. The ultimate intention is to
  provide a guide to how rice expansion programme
  can be effectively coordinated in the region to
  achieve the desired self-sufficiency status, as
  well as promote intra-regional trade.

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THEORETICAL FRAMEWORK

• The major theoretical and analytical models
  contained in the literature and studies conducted
  on comparative advantage are as follows
• Linear Programming model
• Non-linear Activity (Programming) model
• Leontief Input-Output model
• Regression model
• Simulation-based model
• Domestic Resource Cost model

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DOMESTIC RESOURCE COST

• Domestic Resource Cost (DRC) has been extensively
  used in the past 25 years in West Africa.
• Typically, the DRC establishes empirically the
  existence or non-existence of comparative
  advantage in the production of tradable
  commodities like rice among producing regions
  from the perspective of trade in the world
  commodity system.
• The model also measures the pattern of efficiency
  imposed upon the production system by the
  prevailing trade policy regime.

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Incentives and Protection

• Government policies can serve as incentives or
  disincentives to local rice producers. The
  structure of incentives to producers in each
  country is measured using the concepts of net
  private profitability (NPP), and the effective
  protection coefficient (EPC). The net private
  profitability makes use of gross margin analysis

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III. REVIEW OF SELECTED STUDIES

• THE STUDIES CONDUCTED IN THE 1980s
• PEARSON et al (1981)
• ONYENWEAKU (1980)
• AKINYOSOYE (1988)
• WORLD BANK (1986)

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II. STUDIES CONDUCTED IN THE1990s

• A. AKANDE
• B. RANDOLPH et al
• These studies and others not currently available
  for review were based on DRC methodology which
  measures social profitability.

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SUMMARY OF FINDINGS FINDING 1

• Not all countries producing rice in West Africa
  are doing so at socially profitable levels. That
  is, not all the countries demonstrate the
  capacity to produce rice at an economically
  competitive level.

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• The countries that have demonstrated the
  possibility of translating their natural
  resources to a comparative advantage production
  status are
• Sierra Leone
• Mali
• Niger
• Nigeria
• Burkina Faso

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Finding 2

• Not all techniques of production can lead to
  comparative advantage. However there is
  overwhelming evidence from the studies reviewed
  indicating that small scale farms which generally
  use simple tools and equipment in addition to
  manual labour are economically competitive,
  whereas large-scale fully-mechanised production
  practices are not.

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Finding 3

• Yield levels and production costs strongly
  influence comparative advantage, irrespective of
  the techniques of production or regions where the
  farmer is located.

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CHALLENGES

• The present patterns of comparative advantage
  have thrown up certain planning and policy
  issues
• First, economic integration envisioned for West
  Africa must be made practical through taking an
  advantage of agricultural production in selected
  areas in the region, which have demonstrated
  comparative advantage.

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• The challenge for planning is obvious. No one is
  sure of how much land any of the prospective
  countries can further devote to rice cultivation.
  
• The capability of supplying other required inputs
  including capital is also yet to be explored.

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• Policy must focus on
• Breeding programmes to produce high-yielding
  varieties,
• Effective adoption strategies,
• Improved farm management practices by rice
  producers,
• Efficient milling and improved market
  infrastructure

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FURTHER WORKS NEEDED

• There are still gaps in information on
  comparative advantage in the region
• Resources will be sought to pursue this issue
• Target is to have comparative advantage maps of
  West Africa for planning purposes

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THANK YOU

• MERCI !