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

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Presentation on theme: "RICE PRODUCTION IN GHANA: PAST, PRESENT AND FUTURE. DRIVING FORCES AND REQUIRED ACTIONS BOANSI DAVID."— Presentation transcript:

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

2 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

3 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

4 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)

5 RICE PRODUCTION AND SUPPLY IN GHANA,

6 RICE SELF-SUFFICIENCY FOR GHANA,

7 DEVELOPMENTS IN RICE PRODUCTION : TRENDS RICE PLANNING TRENDS

8 RICE PLANNING

9 Output =AREA * YIELD

10 RICE MARKET STRUCTURE

11

12 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)

13 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

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

15 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

16 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)

17 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

18 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

19 MODEL 2 ERROR CORRECTION MODEL

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21 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


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