Transcript THE CONFIGURATION OF COMPARATIVE ADVANTAGE IN RICE

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
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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
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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 fullymechanised 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 highyielding 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 !
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