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International Workshop on Trade-liberalisation in the Rice Sector

SENEGAL 20 September 2005- Geneva

Institute of Environmental Sciences (UCAD) and Senegalese Agricultural Research Institute (ISRA)

Par

Prof Abdoulaye SENE

Dr Amadou Abdoulaye FALL

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1. Brief description of the project

Integrated assessment to – determine direct and indirect effects of trade

liberalization and – assess economic, environmental and social impacts

Institutions directly involved – Ministries of trade, environment and agriculture– Research institutions : ISRA, ADRAO– University UCAD: ISE project leader – National steering committee composed of different

agencies Key stakeholders involved and their roles

- Producers organizations- Consumers organizations- Traders (local and importer) and - NGOs,….

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2. Other relevant background information

Rice represents 34 % national cereals consumed ; 54 % of cereals consumed in urban areas and 24 % of rural areas ;

Rice accounts 25 % rural households food budget and 18 % of urban household

However: local paddy production is 200 000 tones maximum – rice imports per year: 600 000 tones for about 100

milliards CFA francs (second world larger broken rice importer)

Phase of trade liberalization : several reforms leading to more transparency and openness in the framework of WAEMU

Poverty issues: 54% of the population live below poverty line

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3. METHODS

Methods used for stakeholder participation- screening and preliminary assessment

- participatory rural appraisal- four-day stakeholder workshop- stakeholder individual interviews

Methods used to analyze economic, social and environmental impacts and their inter-linkages- combination of EIA and Policy Analysis Matrix- mix of qualitative and quantitative approaches

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4. Main impacts identified by IA

4.1. Social and cultural impacts Positive impact on structuring farmer organizations Professional improvement and more responsibilities

in decision making and mostly on market issues Positive impacts on rice importers and local traders Competition rules the market reformBut disorganization of local rice market lack of visibility (labeling and other marketing

promotion) for consumers, service suppliers and others actors

social differentiation between winners and losers

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4. Main impacts identified by IA 4.2.Economic impacts

Negative impacts of reforms on production - Increase vulnerability of paddy rice- Distortion on collection and payment process of VAT- Unfair commercial practices

Positive impacts of reforms on production

- Transfer of responsibilities- Introduction of new and soft technologies - Diversification of supply sources and high quality rice- Better use of by-products- Renewed interest in diversification to other crops

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MARKET IMPACTS

•Increase in producer paddy price variation (60-70 ; 80-90 ; 100-125 CFA franc/kg);

•High Capacity Building for CIRIZ members on price negotiation

•Increase producer nominal price, but stagnant (or even in decrease) real price;

•Efficient Input distribution by private sector (increase in volumes and financial assets);

•Intensive research and quality rice promotion : rice separator, improved marketing process (bag, label..) and introduction of perfumed basmati rice, etc.);

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SERVICES IMPACT

•Service Providers : Increase in nominal prices (58% for labour ; 24 % offset ; 66 % scheme repair) ; but equipment renewal problems

•Producer : Improved labor productivity with motorized mechanization (increased yield 3 t to 5.5 t/ha); but increase in production costs

•Community: local employment generation

•Sector : Improved paddy milling yield from 55 % to 66 %

–Over milling capacity (150 000 t/an) ;

–Decrease in paddy milling cost (18,9 to 14,5 F/kg) ;

– Rice separator in milling industries (quality orientation)

–High research technologies introduced (ASI and ISA in process) ;

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IMPACT ON RICE COMPETITIVENESS

Zone Production

Part prod. Nat

%

Bénéfice économique

CFA/tonne

CRI Transfert net en CFA

Casamance 26 % 183 871 0,47 -41 593

Anambe 19 % -357 180 2,94 248 248

Vallée 55 % 53 703 0,67 14 580

National 100 % -13 173 1,07 46 484

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COMPETITIVENESS IMPACT ON LOCAL RICE

•Local rice fairly competitive;

•High difference with respect to production zones ; local rice competitive except in Anambe zone

•Improved CIR after liberalization (CIR 1,93 in 1993 to 1,07 in 2000)

•High progress in rice sector (Average yield 5,5t/ha but with a potential yield of 10t/ha

•Quality promotion and orientation

•Lot of efforts required in the basin of Anambé in terms of productivity improvement

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4.Main impacts identified by IA 4.3. Environmental and health impacts

Changes in use and property rights on water and land management

Limited risk of bioaccumulation of pesticides in food chain with regards to rice growing system

Reforestation in irrigated areas for intensive rice production system

Increased health risks (malaria, bilharzias, etc)ButLess use of pesticides and inorganic fertilizers

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5. Linkages and synergies identified

High linkages identified between producers and service providers (milling industries, offset and post harvest services, etc.)

Producers and policy makers in WTO negotiations process (high farmers union implication)

Market Regulation Agency (ARM) facilitates rice information flows between stakeholders, and contributes to local rice distribution

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6. Integrated impact of trade-liberalization on the rice sector

Development of rice production aims to target food security, alleviate poverty and achieve rural development objectives

Local rice production is facing difficulties due to institutional problems and disorganized distribution channels

Positive competitiveness for local production in regional integration

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7. Main lessons learned from project

Managing interdisciplinary team & learning process

Involving various stakeholders on participatory basis– capacity building

Putting information together and exchanges Innovative process claimed by all the different

stakeholders

But– Long lasting process

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8. Main recommendations

resulting from project

Institutional arrangements and measures are implemented but still need harmonization for different initiatives or set dynamic dialogue structure for critical stakeholders

Leadership and involvement of the Inter Professional Union of Rice Producers should be reinforced

Linkage between institutions and policy national dialogue should be improved

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9. Main activities taken to implement recommendations

Communication in different fora : ex. the celebration of « Journées du riz »

Analytical framework at the Sub Committee Trade-Environment of National Committee for International Trade Negotiations being implemented by Joint Integrated Technical Assistance Program

National workshop on project results

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10. Main achievements of project

Large stakeholder participation and linkage;

Better analysis and information flow;

Better communication (inter-ministries, inter-institutions, between stakeholder groups, ..)

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11. Main achievements of project

Relevant rice issues known and accepted by main stakeholders

High implication of policy decision makers in the IA process (Agriculture, Finance, Environment and Trade Ministries)

Frequent exchange and information flow within teamwork, participative data generation and analysis

Capacity building through exchanged experience and high linkage between directly involved actors

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12. Challenges faced in follow-up

Conflicting interest between some stakeholders (ex. importers and farmers)

Lack of communication and linkage

Policy distortion and financial shortage

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13. What is needed to move ahead?

Clear Policy vision and fully state support (light is coming up– Presidential workshop on rice issues)

Strong communication channels among stakeholders and reinforcement of linkages

Creation of Steering committee to take leading role, stimulate stakeholders participation and monitoring activities

UNEP, government or other organizations support to financing, capacity building and information flow

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THANK YOU