policies and price incentives for the rice sector in eight mafap pilot countries

With the financial support of

Policies and price incentives for the rice sector in eight MAFAP pilot

countries

Scope of the analysis• 8 countries: Burkina Faso, Ghana, Kenya,

Mali, Mozambique, Nigeria, Tanzania, Uganda

• Rice price incentives measured at two levels of the value chain: farmers and wholesalers/traders

• Period of analysis 2005-2010

Outline• Commodity context• Policy decisions and measures affecting the

rice sector in the eight pilot countries• Results of the price incentives analysis• Key findings• Recommendations

Average paddy rice production and production per capita in MAFAP countries (2005-10, million MT)

Source: FAOSTAT, Food Balance Sheets

Average human consumption of rice in MAFAP countries, 2005-2009

Source: FAOSTAT, Food Balance Sheets

Trends in production, area and yields (2005-2010)

Source: FAOSTAT, MAFAP calculations

Imports as a share of domestic supply (2005-2010)

Policy context in the 8 countriesType of strategy/policy Countries

CARD Strategy All countries

Input subsidies (not direct impact on prices)

All except Uganda and Tanzania

Price stabilization mechanisms (buffer stocks)

All except Uganda and Mozambique

Government charges (fees and levies)

All countries

Direct price interventions Mali and Burkina Faso

Trade policies (PTAs; other non-tariff charges)

All countries (WAEMU and ECOWAS; COMESA, EAC; SADC)

Estimates of tariffs and other ad valorem charges (%)

  2005 2006 2007 2008 2009 2010

Kenya 27.8 27.5 27.5 27.5 37.3 37.3

Uganda 75 75 75 75 75 75

Tanzania 76.4 76.4 76.4 76.4 76.4 NA

Mozambique 7.5 7.5 7.5 7.5 7.5 7.5

Burkina Faso 13.5 13.5 13.5 13.5, 3.5 3.5, 13.5 13.5

Mali 2.5 12.5 12.5 12.5, 2.5 12.5 12.5

Ghana 36.9 36.9 36.9 36.9, 16.9 16.9, 36.9 36.9

Nigeria 101.5 101.5 110.5 110.5, 31.5 31.5 31.5

Results2005 2006 2007 2008 2009 2010

Kenya 85% 66% 85% 90% 95% 115%

Tanzania 20% 38% 27% 18% 46% 3%

Uganda 101% 140% 91% 52% 59% -3%

Mozambique 9% 16% 18% 67% 2% 7%

Ghana 37% 68% 58% 48% 22% 46%

Nigeria 68% 23% 47% 44%

Burkina Faso 73% 34% 26% 18% 55% 25%

Mali 0% -3% -14% -28% -21% -26%

Wholesale NRP

Results2005 2006 2007 2008 2009 2010

Kenya 111% 84% 117% 106% 105% 115%

Tanzania 46% 85% 54% 26% 85% 2%

Uganda 150% 214% 89% 36% 42% -3%

Mozambique 22% 18% 37% 63% -9% 5%

Ghana 72% 90% 82% 76% -2% -17%

Nigeria -46% -74% -72% -68%

Burkina Faso 105% 29% 22% 16% 41% 14%

Mali -1% -8% -20% -32% -28% -44%

Farm Gate NRP

Observed against expected NRPs

0% 50% 100% 150% 200% 250%0%

50%

100%

150%

200%

250%

E(NRP)

NRP

WHOLESALE FARM GATE

KEY FINDINGS

• strong price incentives at the wholesale level in all countries due to high tariffs and high market access costs between the border and wholesale markets

• consumers commonly pay higher prices (despite policy objectives in favor of consumers)

• farmers receive lower prices than those expected in free, competitive markets with no policy interference

Key findings• Market access costs affecting farm prices are

similar for a wide range of policy frameworks (fees and compliance costs at road check points, ports and markets, disadvantage of small scale farmers in price negotiation);

• Even when import tariffs are in place, these are less effective for farmers than they should be due to imperfect price transmission

Way forward• Expand agricultural sector analysis in Africa

from traditional policy focus towards the functioning of commodity value chains

• Design interventions aimed at minimizing access costs to increase price transmission to farmers, while reducing prices for consumers

• How to bridge the gap?

THANK YOU!

Farm gate and wholesale prices for local rice in

Ghana (GhÇ/100Kg)