key: cord-0731666-lbxj55tf
authors: Arumugam, Kathiresan; Nagai, Tomokazu; Haneishi, Yusuke
title: Policy options for galvanizing Africa’s rice sector against impacts of COVID-19
date: 2020-08-03
journal: World Dev
DOI: 10.1016/j.worlddev.2020.105126
sha: e2b339cd1c5883204c97c3057407d7185f6bdd02
doc_id: 731666
cord_uid: lbxj55tf

Demand for rice consumption in Africa has outstripped the current local production capacities. As a result, African markets have become heavily dependent on importation, especially from Asia. During the COVID-19 pandemic, rice production in both Asia and Africa is likely to be reduced. It is also likely that the major Asian rice exporting countries will resort to stockpiling of their local production, and restrict volumes of (or ban) rice exportation. Such measures could affect demand-supply dynamics and trigger a price crisis in African rice markets. Based on the lessons learnt from the Ebola and Severe Acute Respiratory Syndrome (SARS) epidemics and the 2007-08 food price crisis, African nations need to moderate the impact of such a crisis through appropriate policy actions.

Since the Uruguay round of General Agreement on Tariffs and Trade (GATT; 1994) Although local rice production in Africa increased by 2.3-fold during the same period, the spurt in Africa's imports is largely driven by a fastgrowing appetite for consumption.

Being a non-traditional food commodity, rice represents one of several constituents of a common African household's food basket. Yet it was a sharp rise in the price of rice (along with wheat and maize) that set the pretext for food price crisis in 2007-08, during which time the spike in prices of other traditional staple food crops such as potato, cassava and beans in Africa was relatively less persistent (Dawe and Morales-Opazo, 2009 ). Of the 34.234 million tons of global rice exports in 2018, about 10.772 million tons (31.46%) were destined for Africa (ITC,2020) . Thailand, India, Pakistan, China and Vietnam are the major sources for African markets (Table 1) due to availability and lower transportation time and transaction costs. The recent outbreak of the coronavirus disease 2019 (COVID-19) has sparked fears over the stability of global rice production and supply chains. Although still unfolding, COVID-19 has already begun to negatively affect Africa's rice consumption stocks, intra-regional trade (AGRA, 2020), importation logistics, and domestic and international prices (FAO, 2020b and 2020c). Some of the Asian rice-producing countries such as Vietnam,

Myanmar, India and Philippines have recently placed restrictions on rice exports (USDA-FAS, 2020) that could potentially upset the price equilibrium in African markets. When coupled with volatility in exchange rates (World Bank, 2020), such cracks in rice supply chains could lead to substantial hikes in domestic market prices and compromise food security, poverty reduction and socio-economic development in several African nations.

Nevertheless, the emerging crisis also creates opportunities for the African rice sector to sharpen its competitiveness and improve its domestic market share and self-reliance.

In Africa, rice is harvested one or two times from the same land in a year. Depending on seasonality of the crop and status of the COVID-19 infection curve, the impacts on rice production may vary in different countries and in different parts of a single country. Although official data on area and production are not yet available, COVID-19 mediated disruptions could affect labor availability, on-farm seed inspection and production activities, delivery of farm inputs, machinery services, training and other extension services, leading to decreases in area under rice production, productivity and profitability. The Ebola epidemic in West Africa in 2014 reduced the area planted in rice by 3.7% in Guinea, 8% in Sierra Leone and 11.6%

in Liberia (FAO, 2016) , and gross rice production in these 3 countries dropped by 10% (UNDP, 2014). Data on rice cultivation and production in China (FAOSTAT, 2020a) reveal a significant drop (8.1% and 9.5% respectively) during the severe acute respiratory syndrome (SARS) pandemic in 2002-2003 (Fig. 2) . African nations hence need to patronize and support local rice planting to stem any reduction during the COVID-19 pandemic. They can do so by adopting the following policy options. deciding on subsidies and financial support, it is important to note that providing subsidies alone may not be enough. This is because rice farmers may find it difficult to mobilize labor for operations such as transplanting, weeding and harvesting, and this may lead to reductions in on-farm productivity. This means that temporary input subsidies may become more effective when combined with fiscal and monetary policies that encourage labor mobilization and/or machinery use.

It is imperative that locally-produced rice grain moves to domestic markets more efficiently, with no or minimal losses in quantity and quality, during the pandemic. A majority of smallholder rice farmers in Africa typically sell their surplus to rural traders after performing minimal value-addition activities such as drying and packing. Due to the lack of regulatory structures and inadequate private investment, downstream integration of producers with trading networks is less organized than it could be in most parts of Africa. During the pandemic, farmgate prices for paddy grains might become highly volatile and vary across geographical regions due to lack of transparency and poor synchronization with consumer market prices for milled rice (Ceballos et al. 2016 ).

Inadequate and intermittent availability of finance might affect the cash flow between rice producers, traders, and millers. Such systemic issues might further stoke hoarding, and thus aggravate the impact of COVID-19 on rice supplies in national markets. Furthermore, COVID-19 related restrictions on the movement of goods and personnel might profoundly affect logistics into and out of rice mills.

6 

Monthly average prices for the global benchmark Thai (5% broken) rice (FAO, 2020a and 2020c) (Table 1 ) enforce further export restrictions or bans, and/or stockpile their local production to feed weaker sections of their population through social safety nets and tide over longterm socio-economic impacts of the pandemic, then rice-based food security in Africa might be severely threatened.

The extent of vulnerability of African nations to such a crisis could therefore directly correlate with their rice import-dependence ratio (share of imports in total consumption) and actual import volumes. Available data article reveal (Fig. 4) that Tanzania, Nigeria, Malawi, Chad and the DRC are less dependent on imports (≤ 10% of country's demand) and import less than 100,000 tons of rice, and hence could be less vulnerable, even if the supply from Asia is crippled.

Markets in these countries might be able to manage the gaps from alternative source-countries and/or other local supplementary staple commodities. It should be noted, however, that the analysis displayed in Fig.4 is based solely on official FAO trade data, and hence does not include informal trade (between, for example 9

Benin and Nigeria), if there is any (Golub et al., 2019) . Although countries such as Rwanda, Burundi, Zambia, CAR, Sudan, Gabon and Congo import less than 100,000 tons, their import-dependence is higher (> 40%); this makes their markets moderately vulnerable to market crisis. Countries with even greater import dependence ratio and/or larger import volumes (>100,000 tons) are more vulnerable to shortage in rice trade flux. Recently, countries such as Mali and Chad have reduced import duties, while Kenya and Somali have reduced the VAT on rice to combat the impact of the pandemic on the rice supply chain.

Since the rice trading policies of African nations are now becoming increasingly integrated with those of the corresponding regional economic communities (de Melo and Tsikata, 2015) which are collectively governed by councils of ministers from member countries, alignment of each member country's policy actions with the existing regional policy framework(s) will improve the effectiveness of policy. It should also be noted that while export restrictions and relaxation of import barriers can help increase the rice supplies, when such changes are adopted by several countries simultaneously, such measures might lead to greater global demand, and thus effectively put upward pressure on market prices. Hence, constant monitoring and evaluation of rice supply

Revolution in Africa (2020) Food Security Monitor. Edition #4

Transmission of Food Price Volatility from International to Domestic Markets: Evidence from Africa, Latin America, and South Asia

How much did developing country domestic staple food prices increase during the world food crisis? How much have they declined?

Regional integration in Africa: Challenges and Prospects

Impact of the Ebola virus disease outbreak on market chains and trade of agricultural products in West Africa

FAOSTAT (2020a) FAO Statistics, Food and Agriculture Organization of the United Nations

FAO (2020b) Food Price Monitoring and Analysis

FAO (2020c) FAO Rice price update

Economic Development & Institutions, Benin Institutional Diagnostic WP19BID09

Assessing the socio-economic impacts of Ebola virus disease in Guinea, Liberia and Sierra Leone United States Department of Agriculture

The end of cheap rice. A cause for celebration? UKAID-ODI Briefing

World Bank (2020) Africa's Pulse. No. 21, Spring 2020: An analysis of issues shaping Africa's future

The contents in this publication were enriched through a multi-year funding for the Coalition for African Rice Development (CARD) from especially Japan International Cooperation Agency (JICA) and other development

partners in the coalition (https://riceforafrica.net), towards developing and implementing National Rice Development Strategies (NRDS) in 32 African nations.

The authors of the manuscript entitled "Policy options for galvanizing Africa's rice sector against impacts of COVID-19" whose names are listed immediately below certify that they have NO affiliations with or involvement in any organization or entity with any financial interest (such as honoraria; educational grants; participation in speakers' bureaus; membership, employment, consultancies, stock ownership, or other equity interest; and expert testimony or patent-licensing arrangements), or non-financial interest (such as personal or professional relationships, affiliations, knowledge or beliefs) in the subject matter or materials discussed in the manuscript.

Tomokazu Nagai Yusuke Haneishi