Rice chain analysis in India

Transcription

1 Working document EX-ACT VC case study Rice chain analysis in India Louis Bockel, Orane Debrune, Anass Toudert Agriculture Agri-business and Rural Transformation group (A-ART) Agricultural Development Economics Division EX-ACT team FAO

2 1 EX-ACT VC application: Rice case study in India Table of content 1. Introduction Objectives Data collection: Background: Methodologies and tool used: Developing System of Rice Intensification on paddy value chain in India: Agricultural practices modules: Module Agricultural input: Processing Transportation Socio-economic analysis: Climate resilience: Results: Climate mitigation dimension: Value chain resilience : Socio-economic performances of the value chain... 7 Table of figure Figure 1: Sub basin concerns and objectives of the project... 3 Figure 2: Agricultural SRI practices... 4 Figure 3: Production inputs... 5 Figure 4: Type of transportation:... 6 EX-ACT VC : Ex Ante Carbon Balance Tool for Value Chain Ha : Hectare IAMWARM : Irrigated Agriculture Modernization and Water-bodies Restoration and Management tco2-e : Ton of CO2 equivalent TANU : Tamil Nadu Agricultural University US$ : US dollars Yr : year WRO : Water Resources Organization 1 P a g e

3 2 EX-ACT VC application: Rice case study in India 1. Introduction This working document present a case study of a multi-impact appraisal of the rice value chain in India. It allows users to concretely appreciate the functioning of EX-ACT VC, which is a tool derived from EX-ACT but providing a multi-impact appraisal of food value chain in terms of climate mitigation, climate adaptation and resilience dimension and also providing the socioeconomic performances of the food chain analysed. It gives background on rice value chain in India and a guidance for the users to use the tool Objectives The main objectives of this case study is to test the tool, to verify whether the results are acceptable and to illustrate how it is possible to analyse a value chain by using EX-ACT VC. Moreover, it can help users to understand the multi-impact appraisal issued from a specific analysis (although simplified) with crop rotation Data collection: For this application on EX-ACT VC, data have been used and derived from data collected by the World Bank on a project implemented in the region of Nadil Tamu in India concerning the modernization of irrigated agriculture and restoration and management of water-bodies. World Bank has directed this data collection in order to implement a second phase of this project that finished in 2013, in order to keep going on this way: the project IAMWARM II. Those data mainly concern socio-economic performances in the present situation and the future situation with and without project scenario. For every other data concerning consumable at production, processing and transportation module, EX-ACT team used specific data found in other sources. 2. Background: In India, the potential improvement of agriculture performance has been identified in the region of Tamil Nadu, where a majority of the population lives in rural areas depending on numerous crop production as a source of income. The IAMWARM program is a unique World Bank funded project implemented with the prime motive of maximizing the productivity of water leading to improve farm incomes and products. Under this project, 63 sub basins were selected in a period of six years ( ) with Water Resources Organization (WRO), Government of Tamil Nadu as the Nodal Agency, and the Tamil Nadu Agricultural University (TANU). In total, only 55 sub-basins was covered at the year 2013 in the region of Tamil Nadu. The project objective was to achieve sustainable economic growth as well as poverty alleviation through maximising productivity of water. One component of the project was to work toward supporting a large scale adoption of specific technologies on the major crops of each sub-basin. Activities were formulated in convergence with line departments as project mode and mission mode. System of Rice Intensification (SRI) and Precision Farming (PF) were the major components demonstrated in all the sub basins in the context of water saving and increased productivity. Introduction of pulses in irrigated condition and rice fallow situation was also in demonstrated largely in the sub basin. Improved Production Technologies (IPT) were also introduced in less water consuming crops like maize, sunflower, cotton and groundnut. 2 P a g e

4 3 EX-ACT VC application: Rice case study in India Figure 1: Sub basin concerns and objectives of the project Since the period of the project is now completely achieved, a second phase will be implemented soon, to cover more basins in the region. Based on the diversification of agricultural systems, seven crop are considered (paddy, maize, ragi, minor millets, pulses, nut and sugar cane) on three period of rotation (each represent 4 months). Since EX-ACT VC only allows to analyse one type of value chain, EX-ACT team decided to only focus on the paddy value chain for the first time period of rotation. To support this second phase an ex-ante appraisal is essential to know whether implementing such a project is relevant in terms of environmental performance as well as reduction of poverty in the region. 3. Methodologies and tool used: EX-ACT VC is a tool derived from EX-ACT (Ex-Ante Carbon Balance Tool), developed by FAO in EX-ACT VC is an agricultural-forestry, land use, processing and transportation framework of 8 Excel modules that provides co-benefits appraisal of crop-based value chain in developing countries on GHGs emissions, climate resilience and income. The EX-ACT VC aims at helping designing performant and sustainable value chain. The methodology provide here both a quantified socio-economic appraisal of value chain both at micro and meso level (by agent, by group and for the whole chain) and an environmental carbon-balance appraisal of the value chain impact, in terms of climate mitigation, adaptation and value chain resilience. Thus: The impact on climate mitigation is reflected through quantitative indicators, derived directly from the EX-ACT tool. These indicators are used to obtain and analyse the mitigation impacts in terms of tco2-e of the project. The carbon footprint of the product is calculated for the whole value chain and at different needed stage, aiming at analysing the environmental performance of the chain. The equivalent economic return is also determined and could be an important aspect to 3 P a g e

5 4 EX-ACT VC application: Rice case study in India be considered when attempting, for example, to access to payments for environmental services. Value chain resilience is assessed using simple quantitative but also qualitative indicators. Adaptation indicators measure the reduction of vulnerability of people, livelihoods and ecosystems to CC. Socio-economic impact of the value chain is assessed in terms of value added, income and job generated using a socio-economic appraisal of the value chain. 4. Developing System of Rice Intensification on paddy value chain in India: Assuming that the project will start in 2017 within a period of 10 years, it will affect 74,500 farmers or households in the region. For this analysis we only focus on the paddy production in this region of India which is under Tropical Moist climate where HAC soils are the dominant soil in the region. Seven different crops are anaylsed in the project and the main activities are to increase the diversification of crop production by applying inovative practices. More specifically concerning the paddy value chain, innovative practices are the implementation of SRI in several specific basin. The project currently concerns 149,100 ha of traditional rice, wich will be reduced in the upgrading scneario to 142,440 ha of SRI rice for the first rotation to increase the current diversification rate. By decreasing the average area of paddy, farmers can cultivate other culture, securing the source of income in case of dramatic climate event in the region for instance. Concerning the production stage of the value chain, only two modules have to be filled up by the users: module Agricultural practices and module Production inputs Agricultural practices modules: Implementing SRI means a modification of water regime as well as organic amendment type in order to increase the yield (from 3.4 t/ha/yr to 4.3 t/ha/yr). SRI is a system of flooded rice, using irrigation which is intermittently flooded and with a nonflooded preseason >180 days (cf. guideline for more explanation on the type of water regime before and during the cropping season). Therefore, only the third sub-section of the crop production section in this module has to be filled as following: Figure 2: Agricultural SRI practices Flooded rice systems remaining flooded rice systems (total area remain constant) Fill with your description Cultivation period (days) Water regime In cropping season Before cropping Organic amend type Yield (t/ha/yr) Area concerned Current situation Upgrading VC Description #1 150 Irrigated - Continuously flooded Non flooded preseason <180 days Straw burnt Description #2 150 Irrigated - Intermittently flooded Non flooded preseason >180 days Green manure Description #3 150 Please select water regime Please select preseason water regime Please select type of Organic Amendment P a g e

6 5 EX-ACT VC application: Rice case study in India 4.2. Module Agricultural input: Concerning the different input used during the production of paddy, a change in the type and quantity of fertilizer and pesticides used occurs within the implementation of SRI. The use of green manure is supported by the project as well as the decrease of chemical inputs (pesticides and KCL) following the amount below. However no change occurs for the energy consumption within the upgrading scenario. Figure 3: Production inputs Energy consumption at production level : Energy consumed (l/ha) Current situation Upgrading project EF (tco2-e) Gasoil/Diesel Gasoline Gas (LPG/ natural) Pls fill if other Electricity (Kwh / year) Fertilizer consumption at production level : Country of origin for elect 0 0 Other Africa List of specific fertilizers (kg/ha/an) Specify NPK parts ( N P K Current situation (Kg/ha) Upgrading project (Kg/ha) Please enter your specific NPK fertilizer Urea 47% Lime 0 0 Sewage 5% N 0 0 Compost 4% 1.5% 1.2% SSP 18% 46% 0% KCL 0% 0% 0% 83 0 Green manue 0% 0% 0% Pesticides Herbicides (kg of active ingredient per year) Insecticides (kg of active ingredient per year) 2 2 Fungicides (kg of active ingredient per year) Processing Milling is a crucial step in post-production of rice. The basic objective of a rice milling system is to remove the husk and the bran layers, and produce an edible, white rice kernel that is sufficiently milled and free of impurities. We assume that 21% of the production is self-processed and consumed locally, not involving local processing facilities. Therefore only 79% of the production is processed. In average and for the whole processing sector we also assume that rice production represents 67% in average for every operator in their processing activity. The energy consumption used by husker represents 5 L/ton of production in average of gasoline. Only jut bags are used for packing the production before transportation to wholesaler. The only action possible at processing level is a better management of the production to reduce the loss. None modification in inputs/ton of production occurs for the upgrading project scenario. At processing level we assume a reduction from 2 to 1% of production loss and an increase in the processing rate from 66 to 67%. 5 P a g e

7 6 EX-ACT VC application: Rice case study in India 4.4. Transportation. For this analysis we only focus on the transportation within the country of production, from producers to local market. No exportation is taking into account. Truck are the main type of transportation used and the average distance travelled between the different stage of the value chain are setting out in the adjacent figure. No conditioning is used for transporting rice. Figure 4: Type of transportation: Place of departure Type of transport Nb of km Farm Between 1 and 2 rm Truck in country 35 Processing/storage Between 2 and 3 ocessing/storage Truck in country 70 Wholesaler holesaler Truck in country 70 Retailers Within the upgrading scenario we assume a decrease of the production lost at transportation level from 3% to 1.5%, increasing the availability of food on the local market Socio-economic analysis: The cost have been collected per hectare and per 4 months. Therefore, to computate the cost of the first period of the rice chain analysed on one year, a ratio has been used (total areas concerned by the paddy production on rice areas for the first time period of analysis), then multiplying by the cost computated for the four months of cultivation. This allow users to have a global cost of the paddy production. Concerning the employment on SRI systems, World Bank has assumed a decrease of man-day needed per ha for the production along with a change in the salary which is supposed to increase. Selling prices remain the same at the different stage of the production for both situation. Every prices are entered in local currency and every other data entered in the previous modules are setting out in the socio-economic analysis Climate resilience: Users have to specify an assessment between 0 and 4 for every questions asked in this module. It is a qualitative appraisal of what extent does upgrading this rice value chain improve the buffer capacity of the rice value chain to natural shocks, of the banana production, of the households in relation to food security, the resilience and the self-organization of households and the market resilience and the adaptation capacity to the value chain. An assumption for every sub-index was done in this case, but can be discussed. 6 P a g e

8 7 EX-ACT VC application: Rice case study in India 5. Results: After entering every data on production, processing and transportation consumable, users can have access to the value chain results in terms of socio-economic and environmental performances. Every indicators have to be analysed simultenaously considering the context of the value chain Climate mitigation dimension: In terms of mitigation dimension, the upgrading project scenario of the value chain is at the origin of 10.4 tco2-e per year/ha but it is reduced as compared to the current situation due to a diminution of the area covered by rice production and by implementing improved agricultural practices. Because processing doesn t use a lot of input, and because transportation is mainly done in the country, the detailed carbon footprint, even though it is lower for the upgrading scenario, shows that the main sector with mitigation potential is the production stage of the value chain. This reduction of GHG emission can be assessed in terms of economic returns. Those indicators are only present for the value chain upgrading scenario. Implementing SRI systems allows to earn 8US$/ha/yr, that can be used, for instance, to seek access to payments for environmental services Value chain resilience : In terms of quantitative appraisal of value chain resilience induced by upgrading the rice value chain, it is highlight that the number of hectares with increased soil carbon is decreasing (-6660 ha) which can be explained by the fact that there is a reduction of the rice production for developing others crops. However, we do not know in this analysis the becoming of those land exactly. Therefore we cannot assume whether those results are relevant or not. To have a better idea on the real effect of this project on the resilience generated by upgrading a value chain, other accurate analysis should be done on the six others crops and for the three time period Socio-economic performances of the value chain. The shift from traditional rice to SRI increases the value added generated at every level of the value chain, gross production value and gross income available for farmers and operartor among the rice chain. For instance, the value added goes up from 7 to 18 US$ per ton of product at the processing level between the two situations. However we can observe that the volume of employment generated decreases within the upgrading scenario due to the diversification and the new system applied. The detailed results show that it is only present at production level due to less man-day per hectare needed for SRI than for traditional rice. Because the productivity of rice increases with SRI and because there is less work force needed, the amount of income available for every farmer increases considerably from 28US$ to 1751 US$. Finally, a more complex analysis should be achieve for every type of production, and then aggregated to be able to have an accurate idea of the performance of such a project in India. 7 P a g e