RICE PRODUCTION IN GHANA: PAST, PRESENT AND FUTURE. DRIVING FORCES AND REQUIRED ACTIONS BOANSI DAVID

BACKGROUND RICE, FOOD FOR THE PEOPLE RICE, SOURCE OF LIVELIHOOD THROUGH PRODUCTION & MARKETING RICE AS A POLITICAL CROP IN GHANA AND MOST WEST AFRICAN COUNTRIES

MOTIVATION/PROBLEM STATEMENT  CHANGING CONSUMER PREFERENCES: INCREASING CONSUMPTION  PRODUCTION LESS THAN 40% OF DEMAND AND NATIONAL SUPPLY (Olaf and Emmanuel, 2009; Lançon and Hélène, 2007)  INFLUX OF IMPORTED RICE, HIGH PRICES OF IMPORTED AGRICULTURAL INPUTS ⇒ NEGATIVE RETURNS ⇒ 66% OF RICE PRODUCERS (FAO, 2006)  DRIFT FROM RICE PRODUCTION; LIMITED REPLACEMENT FOR AGING FARMERS ⇒ EXPOSURE OF GHANA TO SHOCKS ON WORLD MARKET IRREGULAR SUPPLY OF LOCAL RICE LOW QUALITY

OBJECTIVE TO IDENTIFY AND MEASURE THE MAGNITUDE OF EFFECT OF THE KEY ECONOMIC DETERMINANTS OF LOCAL RICE PRODUCTION IN GHANA  PERFORMANCE IN MEETING SUPPLY AND DEMAND  ASSESS DEVELOPMENTS IN PADDY PRODUCTION, HARVESTED AREA AND YIELD  ESTIMATION OF LONG-RUN RELATIONSHIPS (COINTEGRATING REGRESSION –FMOLS)  ESTIMATION OF SHORT-RUN EFFECTS (ERROR CORRECTION MODEL)

RICE PRODUCTION AND SUPPLY IN GHANA,

RICE SELF-SUFFICIENCY FOR GHANA,

DEVELOPMENTS IN RICE PRODUCTION : TRENDS RICE PLANNING TRENDS

RICE PLANNING

Output =AREA * YIELD

RICE MARKET STRUCTURE

DATA AND METHODS ⇒ METHODOLOGY VARIABLES: DEPENDENT VARIABLE INDEPENDENT VARIABLES *TOTAL PADDY OUTPUT *HARVESTED RICE AREA *YIELD *REAL PRODUCER PRICE OF RICE *REAL PRODUCER PRICE OF MAIZE * WORLD PRICE OF UREA FERTILIZER (P) *IRRIGATED AGRICULTURAL AREA (P) *AGRICULTURAL LABOUR FORCE (P)

HYPOTHESIS Log TPO t =β 0 + β 1 Log HA t-1 + β 2 LogY t-1 + β 3 Log RPPR t- 1 + β 4 Log RPPM t- 1 + β 5 Log PUF t + β 6 LogIRA t + β 7 Log AL t + µ t Hypothesis: β 1, β 2, β 3, β 6, β 7 > 0; β4, β 5 <0; ESTIMATOR : FULLY MODIFIED ORDINARY LEAST SQUARES * COINTEGRATING REGRESSION: LONG-RUN EFFECTS * ERROR CORRECTION MODEL: SHORT-RUN EFFECTS AND S.O.A.O.S MODELS

DATA PREPARATION GROUP TEST FOR NORMALITY LTPOLHALYLRPPRLRPPMLPUFLIRALAL Mean Median Max Min Std.Dev Skewness Kurtosis Jarque-B Prob Sum Sum.Sq.D Obs38

UNIT ROOT TEST AT LEVEL Series ADF test stat. Mackinnon Critical Values 1% 5% 10% Lag-Length (based on SIC, maxlag=9) Prob.Conclusion LTPO Non-stationary LHA Non-stationary LY Non-stationary LRPPR Stationary LRPPM Stationary LPUF Non-stationary LIRA Non-stationary LAL Non-stationary

UNIT ROOT TEST AT FIRST DIFFERENCE Series ADF test stat. Mackinnon Critical Values 1% 5% 10% Lag-Length (based on SIC, maxlag=9) Prob.Conclusion LTPO I(1) LHA I(1) LY I(1) LPUF I(1) LIRA I(1) LAL I(1)

MODELS AND RESULTS MODEL 1 COINTEGRATING REGRESSION Log TPO t =β 0 + β 1 Log HA t-1 + β 2 LogY t-1 + β 3 Log PUF t + β 4 LogIRA t + β 5 Log AL t + µ t Hypothesis: β1, β2, β4, β5 > 0 : β3 < 0 RESULTS VariableCoefficientStd. Errort-StatisticProb. LHA (-1) LY (-1) LPUF LIRA LAL C R-squared Durbin-Watson stat Adjusted R-squared Long-run variance S.E. of regression

TEST FOR COINTEGRATION AND NORMALITY OF RESIDUAL Cointegrated Test- Phillips-Ouliaris ; H 0 : Series are not cointegrated Phillips-Ouliaris tau-statistic Prob* Phillips-Ouliaris z-statistic Cointegration Test- Park Added Variables (L. trend) ; H 0 : Series are cointegrated Chi-square value df(1) Prob ADF Unit Root Test on Residual ; Residual has a unit root ADF test statistic Prob Jarque-Bera Prob

MODEL 2 ERROR CORRECTION MODEL

REFERENCES Olaf, K. and Emmanuel, D. (2009). Global Food Security Response: Ghana Rice Study. Attachment I to the Global Food Security Response West African Rice Value Chain Analysis. microREPORT#156, USAID Lan Ç on, F. and Hélène, D.B. (2007). Rice imports in West Africa: trade regimes and food policy formulation. Poster prepared for presentation at the 106 th Seminar of the EAAE. Pro- poor development in low income countries. Food, agriculture, trade and environment October 2007-Montpellier France FAO (2006). Briefs on Import Surges –Countries. No. 5, Ghana: rice, poultry and tomato paste. November Commodities and Trade Division, Food and Agriculture Organization of the United Nations, Rome, Italy. ftp://ftp.fao.org/docrep/fao/009/ah628e/ah628e00.pdfftp://ftp.fao.org/docrep/fao/009/ah628e/ah628e00.pdf