World Rice Conference 2009 Oct. 27-29 Cebu, Philippines Shangri-La's Mactan Resort Will Growing Sub-Saharan African Rice Production Reduce Imports? Frédéric Lançon ARENA research unit CIRAD Centre de coopération internationale en recherche agronomique pour le développement F.Lançon - CIRAD - World Rice Conference 2009 frederic.lancon@cirad.fr 1
Plan of the presentation 1. The Recurring Sub-Saharan (SSA) rice challenge 2. Determining factors for promoting rice production development F.Lançon - CIRAD - World Rice Conference 2009 2
1. The Recurring Sub-Saharan rice challenge F.Lançon - CIRAD - World Rice Conference 2009 3
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 F.Lançon - CIRAD - World Rice Conference 2009 4
Beyond the short term perspective Social unrests were not necessarily triggered by rice price increase on the world market. Delay in transmission of price Several countries had already considered revising their rice trade policy before the price surge: Common Exterior Tariff negotiation within Economic Community of West African Sate F.Lançon - CIRAD - World Rice Conference 2009 5
600 500 400 300 200 100 0 Rice price was not necessarily the triggering factor for political tensions Political Turmoil in Dakar 08-2007 10-2007 12-2007 02-2008 04-2008 06-2008 08-2008 10-2008 12-2008 02-2009 04-2009 Thai A1 CIF price Dakar Retail price Dakar F.Lançon - CIRAD - World Rice Conference 2009 6 06-2007 CFA per kg of rice
The end of the cheap rice era? 9000 900 8000 800 7000 700 6000 600 5000 500 4000 400 3000 300 2000 200 1000 100 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 0 Rice Import ( 000 Tons) Rice 25% (USD/ton) F.Lançon - CIRAD - World Rice Conference 2009 7
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% F.Lançon - CIRAD - World Rice Conference 2009 8
Emerging markets and import dependency 120% Import share in total supply % 100% 80% 60% 40% 20% 0% Angola South Africa Cameroon Sudan Benin Burkina Faso Niger Mozambique Togo Kenya Ghana Zambia Malawi Congo, Chad Nigeria Tanzania Mali Gambia Senegal Liberia Côte d'ivoire Guinea-Bissau Guinea Sierra Leone 0 20 40 60 80 100 120 140 Per capita consumption (kg) Madagascar F.Lançon - CIRAD - World Rice Conference 2009 9
An accelerated rice growth in East Africa, but Growth rate 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 9% 7% 5% 3% 1% -1% -3% -5% -7% -9% Western Eastern Middle Southern Total Consumption Production 1990-1999 2000-2007 F.Lançon - CIRAD - World Rice Conference 2009 10
.West Africa is still dominant Total production: 14 200 000 tons Total imports: 7 200 000 tons Middle 6% Southern 6% Middle 8% Southern 11% Eastern 25% Western 63% Eastern 15% Western 66% Average values 2000-2009 FAOSTAT F.Lançon - CIRAD - World Rice Conference 2009 11
A widening gap between supply and demand Kg per capita 25 20 Consumption 15 10 5 0 Production 1990 1992 1994 1996 1998 2000 2002 2004 2006 Year Imports Projecting the current trend SSA would have to import 16MT of rice by 2019! F.Lançon - CIRAD - World Rice Conference 2009 12
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. F.Lançon - CIRAD - World Rice Conference 2009 13
1. The Recurring Sub-Saharan rice challenge 2. Determining factors for promoting rice production development. F.Lançon - CIRAD - World Rice Conference 2009 14
Determining factors for a Sub-Saharan Rice Strategy 1. Technology development 2. Cost-effectiveness of proposed technical solutions: the macroeconomic setting. 3. Institutional changes and enabling environment for building a competitive market for local rice. F.Lançon - CIRAD - World Rice Conference 2009 15
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 F.Lançon - CIRAD - World Rice Conference 2009 16
Non-irrigated systems are dominant West Africa Agro- ecological zones Swamp Flooded Irrigated Inland valley Rainfed Total Areas 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% Production 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% Source, WARDA, 1998 F.Lançon - CIRAD - World Rice Conference 2009 17
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 F.Lançon - CIRAD - World Rice Conference 2009 18
Rice variable comparative advantages across West Africa RIVER SENEGAL OFFICE DU NIGER MOPTI NIGER CASAMANCE SIKASSO SIERRA LEONE NORTH 0,9 CdI N- WEST CdI NORTH CdI WEST SIERRA LEONE SOUTH CdI S-WEST F.Lançon - CIRAD - World Rice Conference 2009 19
Cost effective technical solution Largely determined by: Yield achieved Prevailing 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. F.Lançon - CIRAD - World Rice Conference 2009 20
A segmented market: high transportation and transaction costs Northern Ghana rice market spatial configuration based on estimated local and imported rice flows World market Sources: IRAM, 2007 F.Lançon - CIRAD - World Rice Conference 2009 21
Increasing consumers awareness for quality Percentage of responses 100% 90% 80% 70% West African Consumers justifications for purchasing imported rice Other organoleptic properties Nutritious properties Taste 60% Cooking easiness 50% 40% 30% Swelling capacity Cleanliness and appearance 20% Availability 10% 0% COTE D IVOIRE NIGERIA Price Import price < local price Import price > local price Sources: WARDA- Africa Rice Centre, 2001 and 2003 F.Lançon - CIRAD - World Rice Conference 2009 22
Unstable political and institutional environment 6 000 800 PRE- BAN CRISIS BAN POST- BAN 5 000 700 IMPORTATION 600 4 000 SAP Production '000 tons 3 000 2 000 1 000 0 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Fixed Exchange rate Floating Exchange rate 66% taxes 10-20% taxes Import licences IMPORT BAN 100 Fertilizer Subsidy % 50 % 500 400 300 Import '000 tons PRODUCTION NIGERIAN GRAIN BOARD OFN NSS ADP Special rice program NAFPP RIVER BASIN DEVELOPMENT AUTHORITIES BADEGI RESEARCH STATION 200 100 0 F.Lançon - CIRAD - World Rice Conference 2009 23
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 decades Policy 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 agroindustrial rice scheme might not feasible or sustainable It requires a long term commitment from decision makers. If consumption expand at the same pace, stabilizing rice import volume would be an significant achievement. F.Lançon - CIRAD - World Rice Conference 2009 24
Thank you F.Lançon - CIRAD - World Rice Conference 2009 25
Mature and emerging markets 25% Per capita cons. growth rate 20% 15% Niger Angola % per year 10% 5% 0% -5% Sudan South Africa Kenya Mozambique Benin Zambia Chad NigeriaMali Tanzania Malawi Ghana Congo, Burkina Faso Cameroon Togo Sierra Leone Liberia Guinea-Bissau Côte d'ivoire Senegal Guinea Gambia Madagascar -10% 0 20 40 60 80 100 120 140 Per capita consumption (kg) F.Lançon - CIRAD - World Rice Conference 2009 26
A contrasted situation across the subcontinent Index value 0.30-0.60 (9) 0.15-0.30 (10) 0.10-0.15 (15) 0.00-0.10 (9) source: WARDA 2001 F.Lançon - CIRAD - World Rice Conference 2009 27
Diversity at a regional scale Production share 000 tons 250 125 25 Irriagted Swamp Flooded Low-land Dryland source: FAO and WARDA 1997 F.Lançon - CIRAD - World Rice Conference 2009 28