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  • The challenge to transform cassava into a more competitive crop is not an easy one. One of the aspects in which CLAYUCA is working is on the adaptation of mechanized practices that have been developed by the very efficient cassava production systems prevailing in South Brazil. Prototypes for planting and harvesting cassava are now available. CLAYUCA imported and validated them now under Colombian conditions. Very important economies are obtained when these mechanized systems are implemented. In planting operations

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  • 1. Impact of Trade on Domestic Rice Production and the challenge of Self- sufficiency in Nigeria Chuma Ezedinma Integrated Cassava Project International Institute of TropicalInternational Institute of Tropical AgricultureAgriculture
  • 2. Rice Paddy Production (Mt)' by Proportion 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Nigeria 51.5 52.2 50.8 44.7 48.0 44.5 44.1 43.9 43.3 44.0 38.0 43.6 Benin 0.2 0.2 0.2 0.3 0.3 0.3 0.4 0.5 0.4 0.7 0.8 0.9 Burkina Faso 0.6 0.7 0.9 1.1 1.4 1.6 1.2 1.2 1.2 1.4 1.5 1.2 Cameroon 0.6 0.8 0.5 0.7 0.6 0.5 0.5 0.7 0.9 0.8 0.9 0.8 Chad 1.9 1.7 0.4 1.7 1.3 1.4 1.5 1.6 1.8 1.2 1.5 1.6 Cote d' Ivoire 10.5 10.6 11.2 12.9 12.6 16.2 17.4 16.0 16.0 16.4 16.7 11.2 The Gambia 0.3 0.3 0.2 0.4 0.3 0.3 0.2 0.3 0.4 0.5 0.4 0.3 Ghana 2.4 2.1 2.6 3.0 3.3 3.1 2.7 2.6 2.8 3.3 3.8 3.8 Guinea 8.0 8.2 8.8 10.0 10.4 9.6 9.7 10.2 10.8 9.9 10.9 11.5 Guinea-Bissua 2.0 2.0 2.1 2.4 2.2 1.7 1.4 1.2 1.1 1.4 1.2 1.1 Liberia 1.6 1.8 1.1 0.9 0.9 1.3 2.3 2.8 2.6 2.4 2.0 2.6 Mali 7.3 6.6 7.1 8.6 7.8 8.9 7.8 9.6 9.6 9.9 12.9 12.7 Mauritania 0.7 0.8 1.1 0.8 0.9 1.0 1.1 1.4 0.7 1.0 0.9 0.9 Niger 1.2 1.1 1.2 1.1 0.8 0.7 0.8 0.8 0.8 0.8 1.1 1.0 Senegal 2.7 2.8 3.2 3.0 2.6 2.1 2.3 1.7 3.2 2.7 3.4 2.4 Sierra Leone 8.0 7.7 8.1 7.5 5.8 5.6 5.6 4.4 3.3 2.7 3.2 3.4 Togo 0.6 0.4 0.6 0.9 0.8 1.1 1.2 1.2 1.1 0.8 0.9 0.9 Total 100 100 100 100 100 100 100 100 100 100 100 100 • Nigeria is the largest rice producing country in the West African region. • By 2002, the country accounted for 57 % of the total rice producing area in West Africa. • Potential land area for rice production in Nigeria is between 4.6 million and 4.9 million ha. • Out of this, only about 35 percent of available land area is cropped to rice. • Rice yields are however low even by West African Standards Introduction
  • 3. The Paradox  Nigeria is the largest importer of rice in the world  The annual demand for rice in the country is estimated at 5 million tons  Domestic production accounts for 3 million tons  Imports account for about 2 million tons  Between 1990 and 2002, Nigeria imported 5,132,616 tons of rice  In 2002 alone, the country imported 1.882 million tons of rice. Value of rice imports ('000US$) - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 1 9 6 1 1 9 6 3 1 9 6 5 1 9 6 7 1 9 6 9 1 9 7 1 1 9 7 3 1 9 7 5 1 9 7 7 1 9 7 9 1 9 8 1 1 9 8 3 1 9 8 5 1 9 8 7 1 9 8 9 1 9 9 1 1 9 9 3 1 9 9 5 1 9 9 7 1 9 9 9 2 0 0 1 Year US$
  • 4. Objectives  Describe the effect of rice trade (imports) on domestic rice production and marketing  Assess the competitiveness of domestic rice relative to imported rice in Nigeria  Assess the effect of policy inconsistency on rice production  Determine the optimal efficiency of local rice mills
  • 5. Primary sources: Field level survey involving small scale mills, rural and urban markets in north and south of Nigeria Secondary sources: IITA and other Libraries, internet Methodology
  • 6. Rice Production Systems In Nigeria, cultivable land to rice is spread over five ecologies, namely:  rain fed upland  rain fed lowland or shallow swamp  irrigated rice  deepwater or floating rice and  tidal mangrove swamp Rice production features and systems in Nigeria 17% 52% 27% 3% 1% Rained Upland Rained Lowland Irrigated Deep Water Floating Mangrove Swamp
  • 7. Major Rice producing States: Kaduna - 22 %, Niger - 16% Benue - 10% Taraba - 7% In geopolitical terms rice is produced mainly in the central region of Nigeria Rice Output in Nigeria by Zones (2000) 23% 15% 47% 10% 5% Northwest Northeast Northcentral Southeast Southwest
  • 8. Effect of rice trade (imports) on domestic rice production and marketing The proportion of local rice available in Nigerian markets is far less than that of imported rice Table: Market share of foreign rice to local rice in selected urban markets. Urban market Local rice volume (tons) Foreign rice volume (tons) Total volume (tons) Percent of foreign rice Enugu 2270.00 5935.80 8205.80 72.33 Umuahia 417.00 14202.90 14619.90 97.14 Owerri 1786.90 15493.40 17280.30 89.60 Uyo 290.70 887.00 1177.70 75.53 Port Harcourt 442.90 26306.50 26749.40 98.34 Onitsha 4284.90 157600.00 161884.90 97.35 Calabar 321.00 790.10 1111.10 71.11 Aba 847.97 23177.10 24025.07 96.47 Source: Field survey, 2001.
  • 9. Effect of rice trade (imports) on domestic rice production and marketing Capacity utilisation in selected rice processing mills Location Capacityutilisation (%) Abakiliki 7.06 Afikpo 40.27 Adani 20.46 Omor 60.36 Ogoja 8.89 Bende 5.41 • The small rice processing mills are the most dominant in Nigeria • Low effective capacity utilisation in small rice mills Three types of rice processing mills Traditional/hand Small rice mills Large rice mills
  • 10. Effect of rice trade (imports) on domestic rice production and marketing Nassarawa Afikpo Abakaliki Adani Benue Gombe Taraba 20%30% 15% 30% 15% 30% 20% 15% Figure External sources of paddy rice to Abakaliki, Adani and Afikpo rice mills. Loss of rural farm labour to urban migration Rise in intra regional trade
  • 11. Effect of rice imports on domestic production Growth rate of Rice Production in Nigeria -500000 -400000 -300000 -200000 -100000 0 100000 200000 300000 400000 1 9 6 2 1 9 6 8 1 9 7 4 1 9 8 0 1 9 8 6 1 9 9 2 1 9 9 8 • The growth in domestic rice output declined with growth being negative in 1995 • The growth rate in domestic rice production is still negative to date
  • 12. How competitive is local rice ? Table: Comparing price competitiveness for domestic and imported rice from selected rice mills Mills Millers price N/25kg Additional processing cost (25%) N/25kg Marketing margin N/25kg Estimated Urban market price N/25kg Price of imported rice N/25kg Percentage Difference Abakaliki 900.00 225.00 613.00 1738.00 1575.00 10.30 Adani 1018.75 254.68 431.00 1704.55 1575.00 8.23 Omor 1068.75 267.18 531.00 1866.93 1575.00 18.53 Bende 1137.5 284.37 461.00 1882.87 1575.00 19.50 Source: Field survey, 2001. On the average an extra cost of 25 percent is needed to process domestic rice to the quality and standards of imported rice Improving the standards of local rice is feasible and desirable, but it may not be competitive for local rice mills Compounded by the issue of grading and uniform rice varieties from local farmers
  • 13. Table International rice prices relative to domestic rice prices in Nigeria 1993 to 2001 Year Exchange rate (N) International rice price ($/ton)* Domestic rice (Paddy) $/ton Domestic rice (Milled) $/ton Prices (milled rice) at 2002 exchange rate (N120.96 = US$1.00) 1993 24.67 160.29** 429.27 739.76 150.88 1994 22.00 186.12 544.09 994.55 180.88 1995 75.92 268.50 188.09 393.44 246.94 1996 80.00 234.06 323.0 566.00 374.34 1997 81.25 214.02 311.14 596.43 400.63 1998 82.75 215.16 386.1 593.35 405.91 1999 92.08 191.46 293.55 479.47 365.00 2000 100.6 142.96 265.00 436.28 362.85 2001**** 112.03 135.38 334.55 532.36 493.05 *Based on international prices for White broken rice, Thai A1 super f.o.b Bangkok **Source http://apps2.fao.org/servlet/org.fao.waicent.ciwp.CIWPQueryServlet ***Source: PCU data Average annual market prices, 1993 t0 2000 ****Source RUSEP website: www.rusep.org How competitive is local rice ? The table compares the domestic prices of paddy and milled rice in Nigeria with the international prices of the worst grade rice (white broken rice, Thai A1 super, f.o.b Bangkok). If we assume that exchange rates in Nigeria reflect market forces (which is unlikely especially in 1993), then Nigerian domestic rice is expensive to produce (compare paddy prices) and expensive to process (milled rice) and so cannot compete in the international market.
  • 14. Optimal distribution in domestic rice trade  Domestic rice markets are shrinking due to rice imports  The closer the demand market to the supply zone, the less optimal it becomes with increase in transport cost  The marginal cost of non- optimal supply of rice from small processing mills increases with increase in transport cost ABAKALI KI UYO OWERRI UMUAHI A ENUGU ABA OBOLL O NSUKK A BENIN ONITSH A IKOM OKIGWE PORTHARCO UT OGOJ A AFIKP O OMO R ADAN I BEND E 80% 16.9 % 36.9 % 45% 7.9 % 90% 69.9 % 20% EKWULOBI A 0.7% 0.3 % 11.1 % 29.1 % 7.9 % 8.5% 1.6% 18.5 % 5.7 % 5.8 %
  • 15. Effect of policy Inconsistency on domestic rice production Self sufficiency trend 0 20 40 60 80 100 120 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 Year Percentage PRE-BAN CRISIS BAN TARRIFF • Pre ban period: 1960 – 1976 • Period of crisis (import license, etc) 1976 – 1985 • Period of outright ban 1986 – 1994 • Period of tariff 1995 – 2005 Domestic self sufficiency in Nigerian rice production was adversely affected during the crisis years of 1977 – 1985 Self sufficiency in rice production is still a major challenge for Nigeria to date
  • 16. Conclusions  The demand for local rice in Nigeria is far less than the demand for imported rice  Local rice production costs are high and uncompetitive  Improving the post harvest quality of domestic rice is critical but can only be achieved if production costs are low  Local transport costs for rice output are sticky downwards at least in nominal terms
  • 17. Policy Interventions  Intensify rice production and increase on-farm yield to reduce production costs  Improve quality and standard of rice and reduce post harvest losses  Facilitate rural enterprises and businesses especially in small mills to sustain productivity, incomes and employment  Strengthen human and institutional capacities to produce, process and market rice competitively in Nigeria
  • 18. Thank you