Patrick Kormawa (WARDA, Cotonou) and Tunji Akande (NISER, Ibadan) THE CONFIGURATION OF COMPARATIVE ADVANTATE IN RICE PRODUCTION IN WEST AFRICA Patrick Kormawa (WARDA, Cotonou) and Tunji Akande (NISER, Ibadan) 4/28/2019

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 4/28/2019

New functions of agriculture Food Fibre Income Employment Export earnings through value added activities Poverty alleviation 4/28/2019

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 4/28/2019

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. 4/28/2019

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. 4/28/2019

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 4/28/2019

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. 4/28/2019

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 4/28/2019

III. REVIEW OF SELECTED STUDIES THE STUDIES CONDUCTED IN THE 1980s PEARSON et al (1981) ONYENWEAKU (1980) AKINYOSOYE (1988) WORLD BANK (1986) 4/28/2019

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. 4/28/2019

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. 4/28/2019

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 4/28/2019

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. 4/28/2019

Finding 3 Yield levels and production costs strongly influence comparative advantage, irrespective of the techniques of production or regions where the farmer is located. 4/28/2019

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. 4/28/2019

The challenge for planning is obvious 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. 4/28/2019

Breeding programmes to produce high-yielding varieties, 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 4/28/2019

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 4/28/2019

THANK YOU MERCI ! 4/28/2019