Citation
Agricultural diversification and rice import substitution policies in the Ivory Coast, 1950-1972

Material Information

Title:
Agricultural diversification and rice import substitution policies in the Ivory Coast, 1950-1972
Series Title:
CTA report
Creator:
Adama, Bakayoko, 1949-
Davis, C. G ( Carlton George ), 1936-
Andrew, Chris O
University of Florida -- Center for Tropical Agriculture
University of Florida -- Food and Resource Economics Dept
University of Florida -- Center for African Studies
Place of Publication:
Gainesville Fla
Publisher:
Center for Tropical Agriculture, International Programs, Institute of Food and Agricultural Sciences, University of Florida :
in cooperation with Food and Resource Economics Dept. and Center for African Studies, University of Florida
Publication Date:
Language:
English
Physical Description:
v, 80 p. : ill. ; 28 cm.

Subjects

Subjects / Keywords:
Agriculture -- Economic aspects -- Côte d'Ivoire ( lcsh )
Rice -- Côte d'Ivoire ( lcsh )
Rice trade -- Côte d'Ivoire ( lcsh )
Genre:
bibliography ( marcgt )
non-fiction ( marcgt )

Notes

Bibliography:
Includes bibliographical references (p. 77-80)
Funding:
Electronic resources created as part of a prototype UF Institutional Repository and Faculty Papers project by the University of Florida.
Statement of Responsibility:
by B. Adama, C.G. Davis, C.O. Andrew.

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Copyright 2005, Board of Trustees, University of Florida




Center for Tropical Agriculture
International Programs
Institute of Food and Agricultural Sciences
University Of Florida
Gainesville, Florida 32611
in cooperation with




AGRICULTURAL DIVERSIFICATION AND RICE IMPORT
SUBSTITUTION POLICIES IN THE IVORY COAST,
1950 1972
by
B. Adama, C. G. Davis, C. 0. Andrew CTA Report 3 November 1979
Center for Tropical Agriculture
International Programs
Institute of Food and Agricultural Sciences
University of Florida
Gainesville, Florida 32611
in cooperation with
Food and Resource Economics Department and
Center for African Studies
University of Florida




ABSTRACT
This study focuses on the agricultural sector of the Ivory Coast in general and the rice subsector in particular. Rice is a high demand commodity and a major wage good. Although rice production is technically feasible in the Ivory Coast, government rice selfsufficiency and import substitution policies have consistently failed to meet targeted objectives. The objectives are: (a) to estimate the impact of producer prices of rice and other relevant variables on domestic rice production, (b) to determine key factors associated with increases in domestic demand for rice, (c) to assess differences between aggregate domestic rice supply and demand growth rates, and
(d) to determine whether the 1950-1972 fluctuations in domestic rice production and imports are associated with commodity substitution patterns.
Findings reveal that the own-lag price of rice to producer, the return to export crops, and the area under export crop cultivation were having adverse effects on domestic rice production. The hectareage devoted to rice cultivation and other variables such as fertilizer, time trend and rainfall were exhibiting positive effects on domestic rice production. Annual growth rates of demand for rice were found to be highly and positively correlated to the per capita income component of the demand shifter and there was a general failure of domestic rice production to meet the growing effective demand for rice. Yam was the only commodity substitute for rice.
The key implications identified were: (a) a-poor pricing system to rice producer, (b) a competitive relationship between export crops acreage and rice acreage, (c) a relatively low level of investment in the rice subsector, and (d) the shift of consumption patterns from a high nutrient content food commodity to a poor protein valued commodity.
Key words: Ivory Coast, agricultural sector, rice subsector,
rice self-sufficiency, import substitution, pricing policy, agricultural development, development policy.




ACKNOWLEDGMENTS
The authors wish to thank the Ivorian Center for Economic and Social Research (CIRES) of National University of the Ivory Coast and the Ford Foundation for Mr. Adama's support while pursuing the M. S. degree at the University of Florida. This report is based in part on Mr. Adama's thesis. The assistance of Drs. W. W. McPherson and J. S. Dinning is gratefully acknowledged for their constructive comments during the research phase of the report. Appreciation is also extended to Drs. E. H. Gilbert and J. R. Simpson for their comments on an earlier version of the manuscript. Special acknowledgments are extended to Jean Chataigner and Jacques Pegatienan for their support of this project. The authors, however, are solely responsible for any errors or deficiencies in the report.




TABLE OF CONTENTS
Page
LIST OF TABLES .
LIST OF FIGURES v
COUNTRY SETTING 1
Physical and Demographic Characteristics . . . . 1 Agriculture and the National Economy . . . . . 4
Problem Statement 21
Objectives of the Study 25
Data Base 26
RICE CONSUMPTION AND SUPPLY CHARACTERISTICS:
A REVIEW 26
Structural Setting .. 26
Structural Changes in Food Producing Areas . . . . 27
Structural Changes in Urban and Plantation
Labor Force 27
Consumption and Supply Characteristics:
Literature Review 29
CONCEPTUAL FRAMEWORK AIM ANALYTICAL MODELS . . . . . 35
Conceptual Framework 35
Some Relevant Hypotheses and Theory Relating
to Rice Production and Consumption . . . 35
Factor-Factor Substitution . . . . . . 37
Commodity-Commodity Substitution . . ... . . 38
Cardinal utility theory . . . . . . 40
Ordinal utility theory . . . . . . 41
Analytical Models 43
Objective 1 .. 43
Objective 2 .. 44
Objective 3 44
Objective 4 45
ANALYTICAL PROCEDURES AND EMPIRICAL RESULTS . . . . . 46
Procedure Adjustments 46
Empirical Results ... 50
i




TABLE OF CONTENTS (Continued) Page
Relative Prices, Production, and Resource
Allocation 50
Growth in Rice Demand 56
Rice Supply and Demand Equilibrium . . . . . 59 Rice Substitutes and Complements . . . . . 61
POLICY IMPLICATIONS, RECOMMENDATIONS AIM CONCLUSIONS . . . 63
Policy Implications 63
Dependable and Remunerative Price Relationships . 64 Structural Bottlenecks in the Farming System . . 64 Resource Allocation *66
Product Substitutability . . . . . . . 67
Recommendations 68
Dependable and Profitable Pricing System . . . 68 An Intensified Farming System . . . . . . 70
Subsectoral Investment Levels . . . . . . 71
Research and development . . . . . . 71
Transportation and storage facilities . . . 72 Efficient marketing system . . . . . 73
Commodity Substitution and Nutritional Goals . . 74
Conclusions 75
REFERENCES 77




LIST OF TABLES
Table Page
1 Trends and allocation of Gross Domestic Product of the Ivory Coast, by sector, 1960-1972 .............. 6
2 Share of export commodities as percentage of total agricultural export earnings, Ivory Coast, selected years,
1952-1972 ......... ................. ......... 7
3 Value at price:to .producer of main domestic and export cash crops, selected years, 1960-1972 ....... .......9
4 Trend and allocation of the revenue to producer to main export crops, selected years, 1960-1972 .......... .
5 Production and import trends for rice, Ivory Coast, 1950-1972 ......... ............. ......... .15
6 Domestic rice production, hectareage under cultivation and yields, Ivory Coast, 1950-1972 ..... ............. ...17
7 Area under selected non-food cash crops, Ivory Coast, 1960-1972 .......... ........................ .20
8 Evolution of the Ivory Coast balance of trade, 19511972 .................... ................... .24
9 Estimates of urban, rural and total population, Ivory Coast, selected years, 1972-1990 .... ............. .28
10 Nutrient composition per 100 grams of selected agricultural commodities, calories, protein, and fat ........ ..31 11 Import quantity and value of major grain cereals, Ivory
Coast, 1960-1972 ..... ........................ .34
12 Average consumer price indices for European family,
Ivory Coast, 1962-1972 .......................... .48
13 Average consumer price indices for African family,
Ivory Coast, 1960-1972 .... ..................... 49
iii




Table Page
14 Five month average rainfalls, selected rice growing areas, Ivory Coast, 1960-1972 ................... 51
15 Average prices to producers for selected export cash crops and rice, Ivory Coast, 1960-1972 ............. ... 53
16 Differences between aggregate domestic supply and demand growth rates for rice, Ivory Coast, 1960-61 to 1972-73. 58
17 Estimates of average population, average per capita.
income, aggregate demand growth rates, income elasticity,
Ivory Coast, 1960-1972 ........ ............. ....60
iv




LIST OF FIGURES
Figure Page
1 Location of the Ivory Coast...... ......... 2
2 Agro-ecological zones and major rivers of the Ivory
Coast .......... ............................3
3 Trends in rice production, imports and total quantity
available, Ivory Coast, 1960-1972 ... ........... ...18
4 Trend in food production and population in Africa
(South Africa excluded), 1960-1969 ... ........... ...32
5 Trend of the rice annual growth demand rate, Ivory
Coast, 1960-61 to 1972-73 ..... ............... ..57
v




AGRICULTURAL DIVERSIFICATION AND RICE IMPORT SUBSTITUTION
POLICIES IN THE IVORY COAST, 1950-1972
B. Adama, C. G. Davis and C. 0. Andrew
COUNTRY SETTING
Physical and Demographic Characteristics
The Ivory Coast lies within the frontiers delineated by the former french colonial administration in 1904. These frontiers were the result of aggressive implementation of general policy for organizing and institutionalizing the French Territories in West Africa. With an area of 325,770 square kilometers (125,750 square miles), roughly the size of the state of New Mexico, the Ivory Coast is bordered by Ghana on the east, Upper Volta and Mali on the north, and Liberia and Guinea on the west (Fig. 1).
Within the country itself the land is differentiated by agroecological zones of natural vegetation. The deep southern region is densely forested, particularly in the southwest. The mideastern and midwestern regions are covered with tropical forest. The central and northern regions of the country exhibits decreasing levels of vegetation as one moves to the north (Fig. 2). The average annual rainfall is 127 centimeters (about 50 inches). The relative humidity averages about 80 percent in the south and ranges from 20 to 60 percent in the north.
B. ADAMA is an Ivorian CIRES-Ford Foundation Fellow in food and resource economics at the University of Florida. C. G. DAVIS and C. 0. ANDREW are associate professor and professor, respectively, of food and resource economics at the University of Florida.
1




2
A 1,,,s T
r r, A.
V.
ALGERIA,' LIMA.
C(;YPT Rw
J,
...........
WORITANA
NIGER
VocrA
THF MALI
G A M FB3 o.
SLIDAM C IN IVORY COAS T KG&TkA
IrIkRA. AL Ar?,%CAA'-.
Towt. CAMEROM: .
..........
FZ*JA'rb!RAL .*:.: .., :
C4UI)4r.A 0 -;lie I CONGO
L;t, 'RWANDA
ABqt .; zA ykS vilt";
fts a TANZANIA ;rAN7-lRA' ',
ANCtol.-A ZAMBIA C.OtAORO
..........
r r
AS
tq\
S\,JAztLArAP AFRrA LSSO'T "C'
Figure 1. Location of the Ivory Coast.




3
N+
- + -J -4--4-+ 4- i \\
I 4 I 4+4++ + + + + 44 -~+ + + + +
t +4 +4+ ++++++-4 ++
"4+ 44- + 44+4- + t+ + +++ ++ + --+ + +4-+4-44 + + 4- 4 + 44 +-14- 4- + 4 + + + 44-++
?. :
++ 1SUbAN IAN ZONE
ESAVA NNA
SFORESFED Z-ONE
Figure 2. Agro-ecological zones and major rivers of th e.Ivory Coast.




'4
Four major rivers cross the Ivory Coast: The Comoe, the twin Bandamas (on which the Kossou dam is erected), the Sassandra and the Cavally. The latter delineates, to some extent, the frontier between the Ivory Coast and Liberia. The river Bia, although not a major river, is very important economically, since two hydroelectric dams (Ayam6 I and Ayam6 II) have been built on it (Fig. 2).
According to the 1975 national census, the population of the Ivory Coast was 6 million [37]. In 1970 the United Nations estimated its natural population growth rate to be 3 percent per annum [47]. The overall population density was 18.42 per square kilometer (47.70 per square mile) in 1975. Over seventy ethnic groups live in the Ivory Coast.l/
A large proportion of the more than 50,000 non-African residents in the Ivory Coast are French nationals, among which are businessmen, advisors to government and industries, medical doctors, and instructors in high schools, colleges and the National University.
The more than five-years old government policy of Ivorianization is aimed at the gradual replacement of all top and middle level management positions held by aliens. However, the efficiency and ethnical aspects of this policy has recently been questioned. Therefore, in July 1977 an office was created to monitor the implementation of the policy of the Ivorianization program in all sectors of the economy.
Aggressive national programs of trade and business investment diversification have been accompanied by an increase in the number of other non-African alien (other than French) residents.
Agriculture and the National Economy
Like most African nations, the performance of the Ivory Coast economy has, historically, been closely associated with the performance of the primary sector (Table 1). However, unlike many
!/An ethnic group is defined here in terms of differentiation, however small, between various languages, modes of subsistence, social and political structure, etc.




5
other African countries (Zaire, Zambia), the mining subsector has play a relatively minor role in the overall economic performance of the country. The largest contribution to growth has come from agriculture and forestry. The growth of the agricultural sector and its relative contribution to both Gross Domestic Product (GDP) and national income, can be largely attributed to coffee, cocoa, and timber as primary export commodities. In 1952 these three commodities represented 90 percent of agricultural export earnings for the Ivory Coast, and by 1972 they were still accounting for two thirds of the total (Table 2). There is, however, a growing concern regarding the long term performance of the primary sector and its constituent subsectors. This concern stems from certain observed trends in post-1972 period. In 1975 the primary sector accounted for 30 percent of the country's GDP. This contribution translated into a 3 percent increase over the 1972 level (Table 1). However, this relative share is projected to return to the 1972 level by 1980 and to decline to 25 percent by 1985 [38].
The dominant role of coffee and cocoa in the growth of the
agricultural sector can be largely attributed to the policy orientation of the former French colonial administration towards its African possessions. During this period no significant action was taken to develop the food crop production system or that of export crops, other than coffee and cocoa. In the neighboring Ghana, the British colonial administration was actively promoting and implementing the concept of indigenously owned plantations at a period of time that the French were rejecting such a policy as being irrelevant for the Ivory Coast. For the French colonial administration, the development of the plantation economy was predicated on the entrepreneurial ability of Europeans, under a system of compulsory indigenous labor, designed to provide a cheap source of labor. This labor system involved a process in which African teenagers and certain adults were drafted for work on the European owned plantations. The system was rigidly enforced by the colonial administration who also used this unskilled labor supply to build roads, railways and other public works facilities. As remuneration, those workers were given food and common shelters.




Table i.--Trends and allocation of Gross Domestic Product of the Ivory Coast, by sector, 1960-1972
Fin. inter, Gross domestic
Primary Secondary Tertiary govt. agency & product (GDP)
Year sector sector sector households a7
--------------------------------------Billion CFA Francs------------------------------1960 61.0 (43.0)11/ 19.9 (14.0) 49.6 (35.0) 12.1 ( 8.0) 142.6
1961 62.3 (39.0) 24.7 (15.0) 60.1 (37.0). 14.2 ( 9.0) 161.3
1962 60.2 (36.0) 27.4 (16.0) 63.4 (38.0) 17.3 (10.0) 168.3
1963 74.4 (38.0) 30.2 (15.0) 74.4 (38.0) 18.8 (9.0) 197.8
1964 87.2 (36.0.) 36.0 (15.0) 93.6 (39.0) 22.9 (10.0) 239.7
1965 84.4 (35.0) 40.6 (17.0) 89.0 (37.0) 25.6 (11.0) 239.6
1966 88.1 (34.0) 49.1 (19.0) 95.5 (37.0) 25.3 (10.0) 258.0
1967 86.8 (32.0) 53.2 (19.0) 107.3 (39.0) 28.4 (10.0) 275.7
1968 100.7 (31.0) 62.3 (19.0) 133.1 (41.0) 30.4 ( 9.0) 326.5
1969 108.1 (30.0) 68.8 (19.0) 153.8 (42.0) 34.8 ( 9.0) 365.5
1970 112.6 (27.0) 89.0 (22.0) 172.0 (41.0) 41.7 (10.0) 415.3
1971 119.6 (27.0) 104.9 (24.0) 176.1 (39.0) 45.3 (10.0) 445.9
1972 127.1 (27.0) 116.5 (24.0) 189.5 (39.0) 47.4 (10.0) 480.5
a!
a/Value added by the financial intermediates, government agencies and households based on salary payments is not considered part of production by the national accounting system.
-/Numbers in parentheses are percent of total GDP.
Source: [331.




Table 2.--Share of export commodities as percentage of total agricultural export earnings, Ivory
Coast, selected years, 1952-1972
Commodities 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972
----------------------------------------Percent ....
Coffee 56.4 60.4 57.5 59.6 45.0 37.4 42.0 36.1 35.0 35.0 28.6
Cocoa 32.8 32.3 32.0 20.4 19.7 20.5 17.7 14.7 18.0 18.0 15.6
Timber 3.3 3.7 4.8 10.5 13.6 16.3 20.0 19.0 19.4 17.0 21.2
Sub Total 92.5 96.4 94.3 90.5 78.3 74.2 79.7 69.8 72.4 70.0 65.4
Banana 1.7 1.2 1.3 4.0 5.1 5.8 5.1 6.0 4.0 4.0 4.2
Palm oils &
kernel 0.9 0.8 1.2 1.2 ............
Colanuts .... .... 4.0 3.0 1.9 2.1 2.2 1.7 0.6
Pineapple .... .. -- 0.2 0.2 0.2 0.4 0.5 1.0 1.5
Miscellaneous 4.9 1.6 3.2 4.3 12.4 16.8 13.1 21.7 20.9 23.3 28.3
TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: [34, 391.




8
Beginning in 1945, there was an awakening of political consciousness among the Ivorian educated classes. This consciousness was demonstrated by increased questioning of the colonial system and ultimately its demise. A union of African cash crop farmers 2/
was organized under the leadership of Felix Houphouet Boigny.-This alliance soon culminated in the formal organization of a large scale political party, "Le Rassemblement Democratique Africain" (RDA) at the French West African level, with Houphouet Boigny as chairman. The strongest demand of the political party, particularly in the Ivory Coast, was the abolition of the compulsory labor system for Africans. However, the abolition of such a system was not easy, since the effort led to violent and bloody confrontations in some areas.
With the ultimate breakdown of the compulsory labor system, came the liberation of a large number of workers that had been trained coercively in the coffee and cocoa production systems. Some of these workers stayed on their former plantations as a new class of agricultural wage earners. Other workers sought employment in indigenous plantations and some created their own plantations. These changes later generated a number of interesting structural shifts in the economy. On one hand, there was an accelerated rate of growth in the value contribution of coffee and cocoa to total agricultural earnings to producers (Table 3). On the other hand, relative shares of the two crops in total agricultural export earnings declined significantly (Table 2).
In 1960, the development plan [34] of the Ministry of Planning of the new independent Ivory Coast spelled out the dangers of having the nation's economy based on the three primary commodities, coffee, cocoa, and timber. It suggested that such a dependence would make the economy an easy target for price fluctuations in international markets. Therefore, the need to diversify cash crops became more than a requirement for the immediate future. The goal of the new
-/President of the Ivory Coast. He has held this office since the country was granted its independence in 1960.




Table 3.--Value at price to producer of main domestic and export cash crops, Ivory Coast, 1960-1972
Commodities 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972
---------------------------------Million CFA Francs -----------------------------------------Coffee 13,508 15,541 9,113 16,666 22,167 18,757 19,406 13,64 24,083*20,820 26,408 25,259 29,320
Cocoa 7,797 5,613 6,043 7,083 8,184 7,086 10,664 9,039 9,948 12,219 15,268 18,434 16,114
Banana. .1,743 1,790 2,052 3,022' 3,168 2,923 3,293 3,813 2,929 2,641 3,716 4,103 4,514
Palm oil &
kernel 941 820 949 964 1,067 1,031 1,'079 1,200 1,189 1,314 1,792 2,025 2,571
Colanuts 686 740 '740 740 740 740 800 800 1,200 1,200 1,200 1,200 816
Pineapple &
pineapple
products 268 269 308 384 466 523 717 959 1,177- 1,165 1,566 1,869 2,876
Cotton 192 176 278 370 303 428 506 994 1,172 1,473 1,155 1,188 1,926
Rubber -- 10 18 62 200 372 517 514 528 671 802 923 873
tobacco 165 140 205 235 226 216 230 161 161 161 201 212 191
Copra 66 85 71 83 103 99 127 168 233 261 335 442 381
Essential oils 11 14 34 26 18 54 45 97 104 139 230 345 350
Source: [33].




10
agricultural policy was to allocate the relative weights of export earnings to a greater number of commodities. In short, structural diversification of the agricultural export sector was given high priority. The plans also called for creation of local agricultural processing facilities. Among commodities programmed to play new and significant roles were palm oil and kernels, bananas, pineapple, cotton, tobacco and rubber (Table 3). It would appear that the policy had some positive effect. Table 3 indicates that there has been a significant increase in the value contribution of these commodities over the 1960-1972 period. Also, to the extent that some of these commodities are included in the miscellaneous export category of Table 2, there are indications that the increased production of these commodities was a major factor associated with the relative decline in the share of coffee and cocoa in agricultural export earnings over the period.
The relative revenue share of commodities such as pineapple and pineapple products, cotton and rubber, exhibited a general positive trend from 1960 to 1972 (Table 4). The rather constant share of palm oil and kernel prior to 1970, probably can be explained by the fact that the first villagers' plantations, established under the sponsorship of S0DEPAM,a/- and S0DEPAUI-owmed industrial plantations, only reached the full production stage in the 1970s.
As far as food crops were concerned, specific plans were
designed to encourage the production of cereals (rice, corn, sorghum), but with major emphasis placed on rice. Unlike rice, the production of root crops such as yam, cocoyam, sweet potatoes, and the other starchy food commodities such as plantain, were not a matter of concern. Irrigated rice production was introduced in the north with cotton, sugar cane and tobacco, to serve as cash crops and stimulate development of a more monetized economy in that area. These agricultural policicies and programs in the north
-!/SODEPALM is a state agency created by decree- -law in November 1963 to carry out the program of development of African palm in the Ivory Coast.




Table 4.--Trend and allocation of the revenue to producer to main export crops, selected years,
1960-1972
Commodities 1960 1962 1964 1966 1968 1970 1972
-----------------------------------------------Million CFA Francs --------------------------------------Coffee 13,508 (53.2)-/ 9,113 (46.5) 22,167 (60.5) 19,406 (52.0) 24,083 (56;4) 26,408 (50.2) 29,320 (48.9)
Cocoa 7,797 (30.7) 6,043 (30.8) 8,184 (22.3) 10,664 (28.5) 9,948 (23.3) 15,268 (29.0) 16,1L4 (26.9)
Banana 1,743 (6.9) 2,052 (10.5) 3,168 (8.6) 3,293 (8.8) 2,929 (7.0) 3,716 (7.0) 4.514 ( 7.5)
Palm oil &
kernel 941 ( 3.7) 749 ( 3.8) 1,067 (2.9) 1,079 (2.9) 1,189 (2.8) 1,792 (3.4) 2,571 (4.3)
Coconuts 636 ( 2.7) 740 ( 3.8) 740 (2.0) 800 (2.1) 1,200 ( 2.8) 1,200 (2.3) 816 (1.4)
Pinc apple &
pineapple
products 268 ( 1.0) 308 ( 1.6) 466 (1.3) 717 (2.0) 1,177 ( 2.7) 1,366 (3.0) 2,876 (4.8)
Cotcon 192 ( .8) 278 ( 1.4) 303 (1.0) 506 (1.3) 1,172 ( 2.7) 1,155 (2.2) 1,926 (3.2)
Rubber -- ( -- ) 18 ( -- ) 200 (.5) 517 (1.4) 528 (1.2) 802 (1.5) 873 (1.5)
Tobacco 165 ( .7) 205 (1.0) 226 ( .6) 230 ( .6) 161 ( .4) 201 ( .4) 191 ( .3)
Copra 66 ( .3) 71 ( .4) 103 ( .3) 127 ( .3) 233 ( .5) 335 ( .6) 381 ( .6)
Essential oils IL ( -- ) 34 ( .2) 18 ( .05) 45 ( .1) 104 ( .2) 230 ( .4) 350 ( .6)
TOTAL 25,377(000.0) 19,611 (100.0) 36,642(100.0) 37,384(100.0) 52,673(100.0) 52,673 (100.0) 59,932 (100.0)
::umbers in parcntlheses are percent of total.
source: [33]




12
were expected to reduce the gap between the level of income per farm worker in that region and that of plantation owners in the central and southern regions.-/ In addition, the long run target for rice production over the 1960-1970 period was to improve human nutrition, and above all, eliminate costly rice imports [35, P. 162].
An agricultural modernization agency (SATIMACI) was created in 1958 to provide farmers with technical assistance and, above all, to administer the development efforts relating to export crops. In 1966 the agency was given the additional task of developing and implementing the domestic rice program. The agency developed a scheme called "Operation-Rice," which was designed to deal with problems concerning technical and manpower aspects of rice production. At the end of 1967 the agency had 1,073 specialists and technicians working on rice production alone.
At the same time, SATMACI was also to serve as a research institute concerned with the development of high yielding rice varieties, adaptable to a wide range of ecological conditions. This function brought about the creation of a limited number of regional experimental irrigated rice stations in the northern region. These stations were instrumental in the development of rice varieties capable of producing three crops per year in that region, with a total annual yield of 10 tons per hectare. Similar results were being achieved in Yamoussokro in the central part of the country. In addition to its other functions, SATMACI was given the responsibility for installing rice mills, silos and providing market outlets for the rice [41].
The 1967-70 planning budget provided 4,422 millions CFA francs-V for the development of rice cultivation [40]. Special attention was given to irrigated rice in the north, with the financial and technical assistance of the French and West German governments.
- In the north, the owner is also a farm worker, while in central and southern regions the plantation owner relies on hired labor force. He and his family contribute very little labor to the system.
2/$.00U. S. =250 CFA francs.




13
French technical assistance provided valuable input, when in 1962 it completed a drainage and terracing project in the Korhogo area. At the same time, a loan from West Germany made possible the completion of a new irrigation scheme near Korhogo.
Hydro-agricultural projects accounted for 9,000 hectares of
irrigated rice, producing 37,000 tons of paddy rice in the northern region in 1967. Regional plans called for an expansion to 24,000 hectares and 120,000 tons of paddy rice by 1970. This projected expansion represented a 2214 percent increase over the 1967 level of production [41]. One of the primary goals established in the 1966 policy was to completely eliminate rice imports by the year 1970. At that time it was estimated that more than 460,000 tons of paddy rice would have to be produced in 1970 if the 1967 level of rice consumption were to be maintained. This target output translated into approximately 60 kilograms of husked rice per capita per year. To encourage farmers to contribute to the success of "Operation-Rice," the government, in November 1966, guaranteed growers cash payment for their crops at a minimum support price of 18 CFA francs per kilogram of paddy rice [41].
In a rice mill inaugural address in 1969, the Minister of
Agriculture indicated that in order to satisfy projected increases in consumer demand in the year 1975 more than 500,000,tons of paddy rice would have to be produced annually, up to that period. He based his estimates on the increasing trend in per capita rice consumption [3]1. The government had budgeted the total sum for state contribution to agricultural development over the 1969-1971 period at 30,000 millions CFA francs, including foreign aid. The main targets [3, P. 1402] at this budgeted expenditure level were to:
- increase the area under palm oil plantation from 45,000
hectares to 83,000 hectares.
- develop new rubber plantation areas in the southwest.
- produce 80,000 tons of cotton fiber.
- increase cocoa production to 200,000 tons, by renewal
and extension of existing plantations, particularly in
the southwest.




14
- limit coffee production to 300,000 tons and develop a
program for the diffusion of new varieties.
- produce 140,000 tons of pineapple of which 125,000
tons were to be canned.
- export 175,000 tons of bananas.
- develop a program for rice production which would make
rice import unnecessary by 1970-1975.
Rice import substitution was to be accomplished by a targeted figure of 500,000 tons of paddy rice production annually over the period, which would balance the estimated domestic demand at the end of the period.
In 1970, a new state agency for the development of rice cultivation (SODERIZ) was created in order to take over some of the functions of the former SATMACI. SODERIZ was to deal with all matters related to the production and distribution of rice. However, SODERIZ's main task was to improve rice cultivation methods among small farmers and to facilitate a shift from upland to irrigated rice.
At the end of 1973, three years after SODERIZ was created,
the Ivory Coast imported 147,000 tons of rice [20]. This was the largest quantity of rice imports in the history of the country. The 1973 imports were almost twice the level of imports in the previous year (Table 5). Decisions were then made to increase the price of paddy rice to producer by 3 CFA francs per kilogram. The price increase was designed as an incentive to encourage rice growing and thereby reach the production targets for 1975. SODERIZ provided farmers with fertilizers, improved seeds for upland, flooded and irrigated rice, and pesticide. Moreover, SODERIZ developed rainfed,




15
Table 5.--Production and import trends for rice, Ivory Coast, 1950-1962
Domestic Domestic Imports Imports
production production as pro(Hulled as pro- portion
quantity portion of Quantity Value of total Total
harvested) total avail- available quantity
able quantity available
Year quantity
Thousand Thousand Million Thousand
metric metric CFA metric
tons Percent tons francs Percent tons
1950 71.0 99.0 1.1= 321.9-/ 2.0 72.1
1951 63.1 90.0 7.1 220.2 10.0 70.2
1952 88.0 91.0 9.1 350.1 9.0 97.1
1953 55.7 96.0 2.1 85.4 4.0 57.8
1954 58.9 47.0 8.8 276.0 7.0 125.5
1955 68.5 80.0 16.7 491.3 20.0 85.2
1956 56.5 82.0 12.5 294.4 18.0 69.0
1957 79.8 75.0 25.9 686.9 25.0 105.7
1958 42.5 75.0 14.1 390.5 25.0 56.6
1959 n.a. n.a. n.a. n.a. n.a. n.a.
1960 96.0 73.0 35.5 867.0 27.0 131.5
1961 93.6 65.0 50.5 1,201.0 35.0 144.1
1962 138.0 74.0 47-.8 1,577.0 26.0 185.8
1963 132.0 80.0 33.7 1,045.0 20.0 165.7
1964 148.8 70.0 62.7 2,060.0 30.0 211.5
1965 150.0 69.0 68.8 2,486.0 31.0 218.8
1966 165.0 66.0 83.2 3,113.0 34.0 248.2
1967 208.2 90.0 24.1 875.0 10.0 232.3
1968 219.0 82.0 47.2 1,873.0 18.0 266.2
1969 181.8 77.0 55.6 1,876.0 23.0 237.4
1970 189.6 71.0 78.8 2,033.0 29.0 268.4
1971 231.0 70.0 97.3 2,204.0 30.0 328.3
1972 192.0 71.0 77.1 2,417.0 29.0 269.1
-/Including imports for Upper Volta.
Source: [10, 33, 34, 39]




16
flooded and irrigated rice schemes not only in the northern region, but in the central, western and south-western regions as well. Farmers were assured that their output would be purchased by SODERIZ. Producers were required to repay the agency in "kind" for the cost of the various inputs provided.
SODERIZ's basic marketing policy involved collecting rice all over the country at three different levels, (a) the producer level (b) the SODERIZ paddy rice storage facilities, and (c) the SODERIZ milling facilities. The price at each of these levels was set by the government. Once the paddy rice was milled it was SODERIZ's responsibility to store it until the appropriate time came to turn it over to the Ministry of Commerce, which was responsible for channeling the final product to wholesalers and retailers. However, only 450,000 tons of paddy rice were produced in 1975 and imports were still necessary [36]. In 1977 the Ivory Coast experienced a severe rice shortage, to the extent that rice had to be rationed among consumers in Abidjan, the capital city. The situation was blamed on inefficiencies in the rice marketing system. Following a reshuffle of government ministers in July 1977, the new Minister of Agriculture announced that the SODERIZ program would be discontinued.
According to the 1976-1980 Five Year Plan [36, p. 129], paddy
rice production is expected to reach 800,000 tons in 1980, and 1,030,000 tons in 1985. At the 1980 and 1985 projected levels of production there will still be deficits of 265,000 and 495,000 tons of paddy rice, respectively, based on per capita consumption of 34 kilograms of husked rice in rural areas, and 74 kilograms in urban areas. The estimates translated into 1980 estimated average per capita consumption of 51 kilograms of husked rice. For 1985, that average was expected to reach




17
Table 6.--Domestic rice production, hectareage under cultivation and
yields, Ivory Coast, 1950-1972
Production Average
yield per
Quantity Quantity hectare
Year (Paddy) (Hulled) Hectareage
------ Thousand metric---- Thousand Metric tons
tons hectares
1950 118.3 71.0 220.2 .538
1951 105.2 63.1 211L2 .498
1952 146.6 88.0 209.2 .701
1953 92.8 55.7 146.4 .636
1954 98.1 58.9 163.2 .601
1955 114.1 68.5 188.0 .607
1956 94.1 56.5 -205.2 .458
1957 133.0 79.8 223.7 .594
1958 70.8 42.5 206.1 .343
1959 n.a. n.a.. n.a. n.a.
1960 160.0 96.0 218.0 ..734
1961 156.0 93.6 206.0 .757
1962 230.0 138.0 260.0 .885
1963 220.0 132.0 245.0 .898
1964 248.0 148.8 271.0 .915
1965 250.0 150.0 261.0 .958
1966 275.0 165.0 258.0 1.066
1967 347.0 208.2 302.0 1.149
1968 365.0 219.0 300.0 1.217
1969 303.0 181.8 288.0 1.052
1970 316.0 189.6 289.0 1.093
1971 385.0 231.0 282.0 1.365
1972 320.0 192.0 282.0 1.135
Source: [10, 33, 34, 391.




Hulled rice in 1000 tons
400
350
300
Total O
250- Available
200
Domestic Production 150
100
Import 5G
i i I I I I i i I I I I i
1960 1961 .1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972
Figure 3., Trends in rice production, imports and total quantity available, Ivory Coast, 1960-1972.




19
55 kilograms, with the urban per capita rice consumption still holding the lead [36].
According to the West African Rice Development Association (ADRAO) [2], the estimates for average annual growth rates of rice consumption for the Ivory Coast will decrease from 5.6 percent for the 1975-1980 period, to 4.9 percent over the 1980-1990 period. This projected decline is imputed to projected decline in the urban annual growth rate of rice consumption. Indeed, the urban average annual growth rate of rice consumption, according to the ADRAO study, is expected to move from 8.9 percent over the 1975-1980 period to 6.5 percent over the 1980-1990 period. On the other hand, the rural average is expected to move from 2.7 to 3.0 percent over comparable periods. These projections were based on estimated income elasticities for rice of .20 for urban areas and .40 for rural areas. Results from the ADRAO study on demand, supply and trade position of the Ivory Coast for rice, were not significantly different from those of the Ministry of Planning [36]. Both studies agreed that the Ivory Coast would still be a net importer of rice in the years 1980 and 1990. Rice selfsufficiency ratios/ computed for the Ivory Coast by ADRAO [2], for the 1965-1976 period, indicated a generally positive trend. However, the trend was subjected to fluctuations. For example, over the 1965-1972 period the selfsufficiency ratio reached a peak of 86 percent in 1967 and low of 62 percent in 1966. The value of the ratio was 74 percent in 1972.
6/
The selfsufficiency ratio is defined by ADRAO as production minus seed and losses, divided by the net availability, which is defined as production minus seed and losses, minus changes in stocks, plus net imports.




20
Table 7.--Area under selected non-food cash crops, Ivory Coast,
1960-1972
Palm oil & Rubber
coconut trees
Year Coffee Cocoa Cotton trees Tobacco
-----------------Thousand hectares----------------------1960 n.a. n.a. n.a. n.a. n.a. n.a.
1961 506.0 268.0 53.0 6.4a/ 6.0 9.0
1962 520.2 787.7 61.0 14.1 7.0 10.0
1963 513.0 321.0 78.5 17.3 8.0 11.0
1964 559.5 361.0 4.7.4 22.0 8.0 11.0
1965 558.0 366.0 38.5 29.2 8.0 11.0
1966 473.2 340.0 51.0 39.0 7.5 11.6
1967 649.0 332.0 59.2 46.5 8.0 12.0
1968 665.0 347.0 68.0 59.2 7.0 12.6
1969 652.0 353.0 53.2 69.0 7.0 12.6
1970 652.0 369.0. 56.0 79.1 7.0 12.9
1971 674.0 404.0 71.4 81.9 7.4 13.1
1972 695.0 423.0 76.0 105.6 7.0 13.1
/ Area under coconut trees excluded.
Source: [391.




21
Problem Statement
Despite the heavy emphasis placed on domestic rice production in the Ivory Coast?'s economic development plans since 1960, the country has failed in its attempt to eliminate rice imports or to maintain these imports at the minimum level recorded in 1967 (Table 5). Although the country produced an average of 339,000 tons of paddy rice for the last 6 years (1967-1972) of the period covered in the study, it nevertheless relied heavily on imports, particularly towards the end of that period (Table 5).
Governmental failure to meet rice import substitution goals prompted a series of programs designed to improve the overall performance of the domestic rice economy. The programs ranged from raising the guaranteed price level paid to rice producers to creation of a facilitating state agency, SODERIZ.- Domestic rice production and hectareage data show that, although the general trend was positive from 1960 to 1972, it was vulnerable to varying degrees of fluctuation (Table 6 and Fig. 3). The data indicate that rice imports, after following a trend inverse to that of domestic production from 1960 to 1962, moved in the same direction as domestic production up to 1967. In 1967 rice imports fell to the lowest level during the1960-1972 period. Following 1967, both domestic production and imports registered a vigorous upward trend, with both trends peaking in 1971 (Fig. 3).
7/
As indicated earlier, SODERIZ was subsequently dismantled in July 1977.




22
The 1972 levels were characterized by a simultaneous decline, with nearly 17 percent and 21 percent decreases for domestic rice production and rice imports, respectively, relative to their levels of the previous years. The observed trends in the post-1971 period could suggest, among other things, (a) movement by consumers away from rice to rice substitute commodities, (b) rice producers were moving from rice cultivation to other crops, and (c) a combination of (a) and (b). Production data indicate that hectareage under rice cultivation has been registering a negative trend since its maximum of 302,000 hectares in 1967. The data also indicate that average yield per hectare has remained fairly constant over the period (Table 6). This trend could be indicative of a number of dynamic structural changes. For one thing, it could suggest that, under a vigorous policy of agriculture diversification, other crops are competing effectively with rice for scarce arable land. Since average yield remained fairly constant over the period, there is little evidence to suggest that declining hectareage was a concomitant part of increased productivity. The evidence, therefore, strongly support suggestion (b) above, that rice producers probably were shifting to other crops.
With a few notable exceptions, such as tobacco and rubber,
the area under non-food cash crops, for which data were available, registered a steady rate of increase over the 1960-1972 period (Table 7). From 1964, when SODEPALM established its first palm plantations, to 1972, the hectareage under palm and coconut increased 380 percent. From 1967, when the area allocated to rice production reached its peak (Table 6), to 1972, the hectareage under coffee, cocoa, cotton, palm and coconut increased by 7.1, 27.4, 28.4 and 127.1 percent, respectively (Table 7).
According to the United Nations Economic Commission for Africa (E.C.A.) [47], the estimated population of the Ivory Coast was 5,090,000 inhabitants in 1970. The report also estimated a population of 50 persons per square kilometer of arable land for the country as a whole. From these estimates one could extrapolate that the available arable land in the Ivory Coast might amount to about 87,759 square kilometers. This would represent approximately




23
27 percent of the surface area of the country. Furthermore, with an annual population growth rate of 3 percent [47], the problem of allocating arable land among competing agricultural enterprises could arise in the not too distant future.
Williams argued, in a 1967 report [48], that there were no
non-rectifiable reasons why the Ivory Coast should be a persistent net importer of rice. In spite of this observation, over a decade ago, the failure of domestic rice production to keep pace with domestic demand still remains a reality up to the present time. This persistent disequilibrium between domestic demand and domestic supply has resulted in a drain of scarce foreign exchange earnings through high rice import bills. For example, Table 5 shows that in 1971 the Ivory Coast spent 2,204 millions CFA francs for 97,300 tons of rice. In 1972 it spent 2,417 millions CFA francs for only 77,100 tons, which meant a 10 percent increase in the import bill, with a 21 percent decrease in the quantity imported. Such an inflationary impact on the imported food commodity bill exerts a strong pressure on foreign exchange earnings available for development purposes. Such earnings are vital for effective implementations of development efforts. Concern over such inflationary pressures is a legitimate concern in light of the development objectives of the country. It could be dangerous to ignore the trends on the basis of the fact that the Ivory Coast is currently experiencing a positive balance of trade (Table 8).
Dealing with that matter Johnston and Mellor [26, p. 573] write:
Owing to the severe economic and political repercussions of
a substantial rise in food prices, domestic shortages are
likely to be offset by expanded food imports, provided
that foreign exchange or credits are available. For some countries that are in favorable positions with respect to
foreign exchange earnings this may be a satisfactory
solution. But foreign exchange is usually in short
supply and urgently required for imports of machinery and
other requisites for industrial development that cannot
be produced domestically.
Cheery described the desire for food import substitution as "the most important and most difficult aspect of development programming." He further argued [12, p. 67], that:




24
Table 8.--Evolution of the Ivory Coast balance of trade, 1951-1972
Exports Imports Balance
of
Year Quantity Value Quantity Value trade
Thousand Million Thousand Million Million
metric CFA metric CFA CFA
tons francs tons francs francs
1951 283.467 17,481 332.800 15,372 + 2,109
1952 239.552 18,833 351.700 15,573 + 3,260
1953 294.717 19,085 322.200 12,453 + 6,632
1954 310.592 27,311 426.400 19,338 + 7,973
1955 388.917 25,685 448.900 19,005 + 6,680
1956 476.380 26,340 458.500 18,417 + 7,923
1957 506.165 24,426 478.800 19,512 + 4,914
1958 650.344 31,492 476.200 22,827 + 8,665
1959 n.a. n.a. n.a. n.a. n.a.
1960 1032.005 44,418 617.210 34,123 +10,295
1961 1345.351 51,331 725.995 47,361 + 3,970
1962 1463.593 51,718 715.914 44,427 + 7,291
1963 1753.576 61,598 725.857 47,856 +13,742
1964 2213.048 79,666 1047.370 62,908 +16,758
1965 2312.228 70,932 1206.131 63,732 + 7,200
1966 2343.099 78,259 1499.775 67,803 +10,456
1967 2743.064 82,479 1467.057 72,209 +10,270
1968 3273.842 110,316 1906.782 83,585 +26,731
1969 3640.888 124,080 1850.370 94,917 +29,163
1970 3001.048 137,941 2085.077 115,986 +21,955
1971 3102.570 137,361 1906.906 122,777 +14,584
1972 n.a. 153,162 n.a. 128,686 +24,476
Source: [33, 34].




25
In view of the potential that exists for increasing agricultural productivity, it is likely to be advantageous to obtain the additional food supplies by
increased domestic output rather than relying on
expansion of exports to finance enlarged food imports.
Chenery' s recommendations appear to have been taken into
consideration by the Ivory Coast. However, given the poor performance of the rice economy in meeting national self-sufficient goals, close analysis of the sector deserves high priority.
Objectives of the Study
This study is an attempt to evaluate the poor performance of the domestic rice production system in the Ivory Coast for meeting domestic demand.
General Objective
The general objective of the study is to suggest alternative developmental strategies, based on empirical findings, that would stimulate domestic rice production to levels consistent with a national self-sufficiency target in rice production.
Primary Objectives
Objective 1: Estimate (a) the impact of producer prices of
rice and other major cash crops on domestic rice production and (b) the relative allocation of land resources to rice vis-a-vis these cash crops, and the impact of the use of fertilizer on the level of domestic rice production.
Objective 2: Determine and quantify those key factors associated with increases in the aggregate annual domestic demand for rice.
Objective 3: Assess differences between aggregate domestic rice supply and aggregate demand growth rates, as a basis for determining if persistent disequilibrium between the two might be associated with a differential in resource allocation between export crops and rice crop.




26
Objective 4: Determine whether the 1972 declines in domestic rice production and rice import are associated with generalized changes in the commodity substitution bundle at the consumers' level, i.e., whether other commodities were being substituted for rice.
Data Base
The data used in the present study were obtained primarily from documents issued by the Ministries of Planning and Agriculture of the Ivory Coast. In addition, extensive use is made of published and unpublished data from a wide variety of national and international organizations and agencies. Although the study covers the 1950-1972 period, the statistical models use 1960-1972 as the data base period. This base period was necessitated by the paucity of relevant data on the country's rice economy in the pre-1960 period. It is felt that the 1960-1972 period captures more of the dynamic elements of the country's social, political and economic characteristics, since it covers the post-independent period. The post-1972 period was excluded because of data unavailability.
RICE CONSUMPTION AND SUPPLY CHARACTERISTICS: A REVIEW
Structural Setting
There is growing evidence that the demand and supply characteristics of the Ivory Coast rice economy are directly related to
(a) the economic characteristics of rice producing areas, particularly as related to rice-competing cash crops and (b) consumption patterns of rapidly expanding urban areas, particularly as such consumption shifts are related to labor movements from traditionally food crop dominated areas to urban and export cash crops plantation areas. To what extent are these structural characteristics associated with supply and demand relationships? A brief review of these components is presented below in an attempt to provide a contextual framework for subsequent discussion of consumption and production characteristics.




27
Structural Changes in Food Producing Areas
The northern region, where the bulk of the country's food crops are grown, is characterized by labor force migration and a lower income level relative to the southern plantation areas. Such a mobility of labor force from areas with labor intensive activities to zones with a relatively high capital to labor ratio could, in the long run, have adverse economic effects on farming activities in the north. In general, farmers in the northern region have had limited success in growing export cash crops, such as coffee, cocoa, pineapple, banana and palm. On the other hand, successful cultivation of these crops on southern plantations has resulted in a significant regional income differential between the north and south.
Structural Changes in Urban and Plantation Labor Force
As far as the urban area is concerned, one of the basic problems is the growing population. In 1960, the urban population was estimated to be 450,000 inhabitants, with an estimated annual growth rate of 7.5 percent. Based on those estimates, the total urban population was projected to be 1,071,800 inhabitants in 1972. If the compounded growth rate of 10.57 percent for the capital city Abidjan remained constant, its 1965 estimated population (265,000 inhabitants) would have amounted to 516,4oo in 1972.8/
The results of the 1975 census show that, out of a total population of 6,720,000 inhabitants, the urban population was 2,151,000, which represented 32 percent of the total population. Abidjan, the capital city and its surrounding communities was inhabited by 937,000 people. This number amounted to 44 percent of the total urban population, and 14 percent of the overall population of the Ivory Coast. Furthermore, according to estimates made by the Ministry of Planning (Table 9), the urban population as a whole is expected to
Computations based on data in [4, PP. 35-511.




Table 9.--Estimates of urban, rural and total population, Ivory Coast, selected years, 1972-1990 Areas 1972 1975 1980 1985 1990
------------------Thousands
Abidjan 56.4-/ 937 1,330 1,780 2,315
Total Urban 1,071.3 2,151 2,965 3,980 5,215
Rural 4,351.2 4,569 4,960 5,315 5,715
Total population 5,423 6,720 7,925 9,295 10,930
a/Estimate based on the 10.57 percent compounded growth rate. Source: [36].




29
increase rapidly, reaching a total of 2,965,000, 3,980,000 and 5,215,000 inhabitants in 1980, 1985 and 1990, respectively. The urban population in these years would represent 37, 43 and 48 percent of the total population of the Ivory Coast, while the population in Abidjan and its adjacent areas would amount to 44percent of the total urban people and 21 percent of the overall population in 1990.
Regarding export crop plantation areas, the immigration of labor from countries such as Upper Volta, Mali, Guinea and the northern regions of the country has contributed to a significant growth in the adult population in these areas. For example, in 1950 the nonindigenous African population in the rural area s represented 2.5 percent of the total rural population. By 1965 that proportion had risen to 22 percent. The north which accounted for 34 percent of the rural population in 1950, accounted for only 27 percent in 1965. In 1975 this percentage had declined to 26 [371. Two common characteristics of urban and plantation areas are their heterogeneous population and relatively higher levels of income.
Consumption and Supply Characteristics: Literature Review
The post World War II agricultural commodity literature has
focused globally on export crops as well as on food crops. On one hand, the literature on export crops tends to concentrate on trade and fluctuation problems in the export earnings of less developed countries (LDCs) while on the other hand, discussions on agricultural food commodities have tended to focus on food and nutrition problems of LDCs [21]. A relatively large proportion of this literature is concerned with LDC's adaptation of green revolution technology for basic grains, and the associated second and third generation problems
[131.
From a nutritional standpoint, the production of basic grains and vegetable should warrant special attention in the developing nations, relative to starchy roots. The former commodities provide higher levels of the nutrients essential for balanced diets, important for human growth and development. If calorie intake is a good




30
quantitative indicator of diet adequacy, protein levels provided by cereals and other vegetables is the quality indicator (Table 10).
Adequate protein intake is essential to physical growth and
maintenance. Diseases such as kwashiorkor, endemic goiter, anemia, beri beri and obesity have been found to be associated with nutrient deficiency. According to the Nutrition Reviews [42] these nutrition related diseases are prevalent among infants and children in many areas of the developing world. The prevalence of such diseases among the younger populations tends to affect their health status in later years. The article further indicates that mental apathy and dullness among children have been found to be associated with kwashiorkor, and that differences in alertness were evident between two African tribes with different diets.
A study conducted by the FAO 1151 indicates that decreased
physical efficiency and mental effectiveness, resulting from nutritional deficiencies, may in turn lower the level of aspiration of the people affected. These conditions in turn tend to perpetuate the conditions that cause them in the first place.
Empirical evidence strongly supports the contention that the lack of food and poor nutrition in LDC's will not only impair the population's productivity, but it will also affect their psychological attitudes and social behavior in such a way to impede their overall economic development. A problem of general concern to economists is the inability of the agricultural commodity sector in the developing countries to produce the necessary quantity of basic grains such as wheat, rice, corn, to meet the food demand of their growing population. A typical example of this situation is the African experience (Fig. 4). In this case the figure dramatically illustrates a continuing and widening gap between the rate of growth in domestic food production and the rate of growth in population. Empirical studies indicate that the income elasticity of demand for food in developing countries is considerably higher than in the developed nations [26]. A 1967 FAO study [161 indicates that the income elasticities were .7 and .6 for wheat and rice, respectively, in the Ivory Coast. These relatively high elasticities are related to the fact that, in West Africa, grain products, particularly rice and wheat, are major wage goods. This characteristic means that




31
Table 10.--Nutrient composition per 100 grams of selected agricultural
commodities, calories, protein, and fat
Commodity Calories Protein Fat
Number --------Grams---------wheat medium Extr 94-100 334 12.2 2.3
wheat medium Extr 80-93 350 11.7 1.5
wheat medium Extr under 80 364 10.9 1.1
Rice milled white, Extr under 70 360 6.7 0.7
Maize Extr 97-100 356 9.5 4.3
Maize Extr 90-96 360 9.3 4.0
Maize Extr under 90 363 8.4 1.2
Millet ragi Extr all rate 332 6.5 1.7
Sorghum Extr all rate 343 10.1 3.3
Sweet potatoes 97 1.1 0.3
Cassava fresh 109 0.9 0.2
Yam 90 2.1 0.2
Source: [l8].




160
150
140
130 (.2
S120
110 U
100
1960 1961 1962 1963 1964 1965 1966 1967 i968 1969
Food Production -00-Population ----Per Caput Food
Production
(2.2)* is the food production annual rate of growth in the decade 1956-58,
1966-68.
Source. The State of Food and Agriculture 1970, FAQ/UN 1970.
Figure 4. Trend in food production and population in Africa (South Africa excluded), 1960-1969.




33
wheat and rice are generally preferred over other grains, such as sorghum, barley and corn. Thus, rice and wheat consumption tend to rise steadily as incomes rise, since 60 to 70 percent of consumer personal disposable income is spent on these commodities,
Most of the western African countries, including the Ivory Coast (Table 11), have failed to meet their domestic demand for a basic grain such as rice, without resorting to massive imports. Over the period 1960-1972 the expenditure on rice imports for the Ivory Coast averaged 69 percent of the total expenditure on imports of major grain cereals. Rice imports, as a proportion of total cereal imports, ranged from a high of 97 percent in 1963 to a low of 40 percent in 1967. Such a situation has raised serious questions for a number of west African 'countries, since rice, unlike wheat, can be produced under a wide range of ecological conditions in these countries.
In discussing the performance of the food crop economy of the Ivory Coast over the 1950-1965 period, Amin [4, P. 771 writes:
The share delivered by the countryside to the cities
did not grow evenly according to commodities. The
quantity of cereals remains low and resorting to
imports happens to be essential here. The one for
roots and starchy commodities meet the need of local
urban areas, the same thing is true for fruits and
vegetables, for which the need for imports is directed
to luxury commodities.
Going further in his analysis, Amin [41 indicates that the origin of the cereal deficit in the south, where export crops are mainly grown, is related to the fact that residents have changed their consumption pattern from root commodities to rice. He attributes this change to social customs, which associate a certain level of prestige with rice consumption. He argues that [4, p. 951:
It remains that if the southern populations had to
produce the quantity of cereals needed to feed
themselves, they would not have succeeded so easily
in producing such quantities of coffee and cocoa
without changing their mode of production, without
intensifying their agriculture and working much more.




Table ll.--Import quantity and value of major grain cereals, Ivory Coast, 1960-1972
Comnodities 1960 1961 1962 196.3 1964 1965 1966 1967 1968 1969 1970 1971 1972
-- ---------------------------------------------u~nt y (fn metric tons) -----------------------------------------Whear 4,788 5,371 4,069 1,323 70,974 63,626 72,827 61,711 63,998 47,482 77,880 30,380 74,982
Co)t 2 -- .. 99 -- 494 16 36 6,947 4,593 1,639 30
Klce 35,500 50,500 47,800 33,700 62,700 68,600 83,179 24,066 47,226 55,612 78,785 97,255 77,122
Lither cerealt 1.0 34 .. .. 8 10 130 28 88 20 98 44 3
!'C a 40,300 55,905 51,869 35,023 133,781 132,436 156,630 85,821 111,348 110,061. 161,356 129,3i8 152,137 PKice as propo ........ .........-----------------------------------------------. Percent ..................-----------------------------*ciiL of Local
quantity 88.0 90.0 92.0 96.0 47.0 52.0 53.0 28.0 42.0 51.0 49.0 75.0 51.0
--------------------------- Value (in millions CFA francs)
Wheat 1b2.0 190.0 144.0 34.0 1,001.0 1,311.0 I497.0 1,283 1,372.0 1,154.0 1,507.0 734.0 2,096.0
Corn 0.073 0.012 2.0 10.0 2.0 4.0 153.U 112.0 39.0 4.0
Rice 867.0 1,201.0 1,577.0 1,045.0 2,060.0 2,466.0 3,11.0 875.0 1,872.0 1,876.0 2,033.0 2,204.0 2,411.0
Other cercals 0.5 1.5 1.0 1.0 3.0' 1.0 2.0 4.0 2.0 2.0 1.0
AIL Item3 1,030.0 1,392.0 1,661.0 1,079.0 3,064.0 3,798.0 4,623.0 2,161.0 3,250.0 3,187.0 3,654.0 2,979.0 4,518.0...,
Rice js proper ------------------------------------ --------------------- Percent -----------------------------------------------------ti,,a of total
v-84.0 86.0 91.3 97.0 67.0 65.0 67.0 40.0 58.0 59.0 56.0 74.0 53.0
Source: [33, 39].




35
Dumont [13, p. 84], addressing the specific problem of rice production in the northern region of the Ivory Coast, writes:
As export crops available to the north besides cotton
and tobacco, rice comes in first place and needs to
have its transportation conditions toward urban areas
improved. It would be better to use the profit realized
by the Caisse de P~r~quatiori-to improve much more
domestic rice growing conditions than subsidizing
imports of rice.
Ruttan's [45, p. 155] description of rice production and consumption in southeast Asia dramatically illustrates the situation in the Ivory Coast. He writes:
The rate of growth of crop output has in most developing
countries failed to equal the rate of growth of demand.
Furthermore, relatively large share of the production
increases that have occurred, even in densely populated countries, have been based on expansion of area planted
rather than on yield increases.
CONCEPTUAL FRAMEWORK AND
ANALYTICAL MODELS
The early portion of this section formulates a series of hypotheses pertinent to rice production and consumption, and examines the problems of substitution among factor inputs, on the one hand, as well as that of product substitution, on the other hand. The latter portion specifies the analytical models and operational procedures used to meet the objectives of the study.
Conceptual Framework
Some Relevant Hypotheses and Theory Relating to Rice Production and Consumption
Since the primary focus of this research is on small farm rice economy, it seems appropriate to state a basic set of hypotheses regarding production and consumption behavior. These are:
2-/The Caisse de P~r6quation is similar to a Rice Marketing Board.




36
1. Farmers growing rice will be more likely to increase their production of rice if the relative price of rice to producer is more attractive.
2. Under conditions of scarce land resource, those farmers
growing rice in combination with other crops, will tend to reallocate the more productive land to higher value cash crops and maintain marginal land for rice production.
3. With a process of land allocation which takes land away from rice cultivation, if the level, quality and timing of a rice input such as fertilizer, a partial land substitute, is poor, the productivity of the rice subsector is likely to be adversely affected.
4. If a food commodity with a relatively higher income elasticity experiences persistent shortages over a certain period of time, consumers will be more likely to shift to more readily available commodities, even if those commodities have a lower income elasticity.
In addition to the above hypotheses it will be assumed in the present study that:
1. Shortages of fertilizer in the rice subsector will be
experienced as long as its marginal value product in growing other cash crops is higher than the one in growing rice.
2. In addition to the use of new inputs, such as fertilizer, high yield seeds, and improved production techniques, the creation of efficient marketing systems for products and factor inputs will tend to increase producer prices and general consumer welfare.
Assumption 2 refers to the question of possible second generation problems associated with increased agricultural productivity resulting from green revolution technology [141.
The two substitution phenomena addressed in hypotheses 3 and 4 are:
1. Substitution among traditional factors of production and
improved factors generally associated with green revolution technology.
2. Substitution among farm commodities at the consumer level.




37
Factor-Factor Substitution
Factor-factor substitution could be a relatively important
phenomenon in Ivory Coast agricultural economy. The possibility of such a phenomenon occurring on a large scale in rice production is suggested by the trends in Table 6. Specifically, the table shows a persistent decline in the hectareage of land committed to rice production over the 1967-1972 period. Concurrently with the decline in land input, there is indication of a slight increase in the average yield per hectare over the period. To what extent are the trends indicative of other factors being substituted for land in rice production? Or more specifically, to what extent was fertilizer substituted for land in the Ivory Coast rice production system?
Empirical studies by Heady and Tweeten [25], in Iowa, Mississippi, Kansas and North Carolina, showed that fertilizer is a substitute for land and labor. As a land substitute, they suggest that the Gross Marginal Rate of substitution of fertilizer nutrients for land varies with the soil type, rainfall, crop, climate and other environmental factors. It also varies with the ratios in which fertilizer and land are used under any unique combination of these factors. They concluded [25, P. 113], that:
Hence, a single major factor seldom is substituted for
a single other factor in agriculture. However, the
"1rs" marginal rates of substitution of fertilizer (as
a technology and resource) for land are of importance or relevance. Given a favorable supply price for the "fringe" resources which complement either fertilizer
or land, national policy or planning still is concerned
about the rate and extent to which a major resource
such as fertilizer can substitute for a "fixed" resource
such as land.
The study presented empirical evidence that fertilizer is also a substitute for labor. In this regard Heady and Tweeten [25, P. 113] write:
Here we refer to labor which is associated marginally with land, in the sense that if we replace an acre of
land by fertilizing remaining acres at higher levels
we also displace the constant quantity of labor required
to handle the displaced land. As a given output is produced by diverting some land from production and producing more on fewer acres at higher yields, some




38
of the displaced labor (attached to the displaced
land) is offset by the added labor required to harvest
and handle the higher yield on the remaining acres
as well as by some added labor for applying the
fertilizer.
One very important finding in the Heady-Tweeten study is that
the additional labor required to harvest, apply fertilizer and handle the higher yield on the remaining acres, will be negligible under a high level of mechanized farming system, such as the one in the United States. On the other hand, in developing countries the impact of such additional labor is likely to be highly significant, primarily because of the low level of mechanization.
The use of factor input, such as fertilizer, is not new in the Ivory Coast. However, its usage has been primarily associated with the production of traditional export cash crops such as coffee and cocoa. The introduction of fertilizer into rice production did not occur, to any appreciable degree, until the early 1960s. This raises the question as to whether this development is associated with the observed decline in land input.
Commodity-Commodity Substitution
Certain basic economic relationships exist between the quantity supplied, the marginal cost from increasing input and the final price of farm commodities. Farmers will be reluctant to purchase any single input or combination of inputs if there is a high degree of uncertainty regarding the unit output price and the overall profitability of the enterprise in which the factors are used. In the case of the Ivory Coast, this relationship suggests that farmers will not simply produce commodities because the nation needs higher production levels or urban people are discontent with higher food prices as a result of scarcity. Positive supply response will only be forthcoming if farmers perceive that it is profitable to do so. Within the context of new resources allocated to the production of specific commodities, such as fertilizer to rice production, increased use of such inputs will only be forthcoming if the increase in the unit price of the product more than offset the




39
increase in the unit cost of the new input.
The single most important new input in domestic rice production is fertilizer. Since the Ivory Coast is a net importer of fertilizer, it is possible that fluctuations in the in-country price of fertilizer could be related either to the international market structure or to domestic market conditions. In any case, and depending on the extent to which fertilizer is being used, a rise in the price of fertilizer will, ceteris paribus, tend to raise the price to consumers of the commodities produced with fertilizer usage. This is based on the economic reasoning that an increase in the price of fertilizer would increase in turn the marginal cost of producing rice, and hence the price of rice.
For consumers, given that rice is a major wage good in the Ivory Coast, any substitution effect working against rice consumption could be explained, to a great extent, by the price level of rice, relative to rice substitute commodities, as well as basic changes in consumer preferences. A thorough study of the preference structure of consumers would facilitate the formulation of a set of hypotheses as to whether or not the aggregate consumer utility function is a separable function or not. If empirical results suggest that the utility function is separable, further hypotheses will have to be formulated and tested as to whether or not we are dealing with a weak separability case or a strong separability case.
Generally speaking, weak separability of utility function is defined in terms of the marginal utility of a commodity in one group being different from the marginal utility of another commodity in the same group [44, p. 69]. A pioneering work on weak separability of utility function was done by Strotz in his 1957 article [46]. The weakly separable utility function appears in the terminology introduced by Strotz, as a utility tree with branches. Weak separability then became of great interest to the economist as a prerequisite for the consistency of the two-stage maximization procedure. According to Strotz, households proceeds towards utility maximization in two steps. The first step is an optimal allocation of income among broad commodity groups corresponding to 'branches' of utility function. There is thus a budget allotment to each branch.




40
The second step involves the optimal spending of each budget allotment within its budget constraint.
Gorman [23, 24] and Strotz [46] showed that the two-stage
budget allocation procedure has to be based for three or more groups, on a strongly separable utility function. However, Blackorby et al. [8] argue that the Strotz-Gorman conditions refer only to the existence of group price indices. They then proceed to show that the budgeting procedure described by Strotz is consistent if, and only if, the utility function is weakly separable.
The weak separability treatment of utility function gives a more realistic overview of the structure of consumer preferences. As such, it provides a more appropriate conceptual framework for discussion of complementarity and substitutability. A brief review of the traditional definitions of those characteristics is presented below.
Cardinal utility theory
According to the Cardinal definitions of utility theory the second order cross partial derivatives of the utility function is the key indicator. Hence, with an utility function such as:
U= f(Xi, Xj Xk, X1, Xm)
with Xi, Xj belonging to group A (food item) and Xk, XI, Xm belonging to Group B (non-food item),
2U
d-U 0 will imply independence between Xi and Xj and
d d
xi xj
d2U
> 0 will imply complementarity between Xi and Xj d d
xi xj
while
d2U < 0 will imply substitutability between Xi and Xj.
dxi dxj
According to the cardinal definitions, two commodities are substitutes




41
if the increased consumption of one decreased the marginal utility of the other, and vice versa. This definition probably corresponds to our intuitive concept of substitutability. However, the signs of these cross partial derivatives are only invariant under linear transformations, but not under monotonic increasing transformations of the utility functions [44, p. 78].
Ordinal utility theory
From the ordinal utility function point of view, the derived demand equations have the advantage of being invariant under any monotonic increasing transformation. As a consequence of this, the derivatives, and specifically the substitution effects of the demand equations, are invariant. Furthermore, the signs of the cross-substitution effects are not only invariant, but also undetermined. This means that they can be positive, negative or zero. The advantage of this is that one might use the cross-substitution effect, Kip in the so-called 'Slutsky equation' -0/and say that i and j are substitute whenever Kij is positive [44, p. 781.
Assuming that we have the following demand function:
Xi = (Pi' P Pk' PI, Pm, Y)
where, the P's are the relevant prices of the bundle of
commodities entering the preference schedule of the consumer and Y being the income. The Slutsky equation for the case where the price of another good Pj varies is:
3Xi Kij -Xj 3Xi
where, Kij = dX
dPj y,
with the underlying condition that income is held constant. The
10/Slutsky was the first to show that the reaction of the quantity demanded of a good to a change in its price or to change in the price of any other good can be decomposed into an income effect and a substitution effect [44].




42
ordinal hypothesis suggests then that:
Kij>O implies substitutability between commodities i and j.
Kij j.
Kij=O implies independence between the two commodities i and j. It should be noted, however, that independence here is not defined by the fact that the demand for commodity i is independent of the price of commodity J.
Barten [6] has formulated a procedure for reconciliation of the cardinal and ordinal treatment of substitutability, complementarity and independency. However, this procedure will not be used in this study, since it requires the development of an aggregate utility function which is beyond the scope of the present study. Therefore, our theoretical framework is based on the following assumptions:
1. Rice consumers in general have an aggregate utility function U, which is continuous and twice differentiable. Also, the function has the normal property of decreasing, but positive marginal utility of income (ul>o and U2<0).
2. Exchange transactions occur in a highly monetized economy with limited practice of barter. Given the above assumptions, attempts will be made to estimate the aggregate demand function for rice in the Ivory Coast, to the extent that this demand function can serve as a proxy for a derived demand function as specified in utility theory. Coefficients exhibited by such a demand function are expected to give important insights into the question as to whether or not there is substitutability or complementarity between rice and other commodities in the consumer bundle of food commodities.
Table 5 shows that 1967 domestic production, representing 90 percent of the total rice available to the country, had a fall in share in 1968 and 1969, then held fairly constant at 70 percent until 1972. The same trend was exhibited by rice imports (Table 5). These patterns could suggest, as mentioned earlier, that substitution might be occurring between rice and other commodities. If price and quantity for substitute commodities should move together, as stated




43
by economic theory, then one might expect the price of rice to the final consumer to move together with the quantities consumed of the rice substitute commodities.
Analytical Models
Since the focal point of the study has to do with the production and consumption characteristics of the rice economy, the specific empirical models used in the analysis are keyed to meeting each of the four objectives given earlier. Objective 1: Objective 1 is aimed at assessing the impact of prices to producers for rice and prices for the major export cash crops on domestic rice production, and the relative levels of land allocated to these crops on the level of domestic rice production. The following estimating equations are expected to meet this objective.
QRT = f(PRG1, PEG1, ART, AET, FRT, RT, T, UT) (1)
wher e,
QRT = quantity of rice produced in period t, in thousand
metric tons.
PRGI= average price to producers for rice in period t-l, in
thousand CFA francs per ton.
PEG,= average price to producers for export crops in period
t-l, in thousand CFA francs per ton.
ART = area under rice cultivation in period t, in thousands
of hectares.
AET = area under export crops cultivation in period t, in
thousands of hectares.
FRT = quantity of fertilizer used for rice cultivation in
period t, in metric tons.
RT = average rainfall in period t, in millimeters.
T = the time trend.
UT = the error term in period t. and,
QRT = f(PRGl, RRT, RET, FPT, RT, T, UT) (2)
where,
QRT, PRG1, RT, T, and UT are as defined in equation (1).




44
RRT = average gross return of rice per hectare.in thousand CFA
francs, in period t.
RET = average gross return of export crops per hectare in
thousand CFA francs, in period t.
FPT = average price of fertilizer in thousand CFA francs per
metric ton, in period t.
The coefficients of PRG1 in equations (1) and (2) will give the impact of the price of rice to producer in period t-l, on the quantity of rice produced in period t. The coefficient of PEG1 in equation (1) will give information on the effects of the average lag-prices of export crops on the current quantity of rice produced. Coefficients of ART and AET in equation (1) will indicate the responsiveness of the quantity of rice produced, relative to changes in hectareage devoted to rice and export cash crops. The coefficients of FRT, FPT, RT and T are expected to carry positive signs. Furthermore, the coefficients of FRT in equation (1) and FPT in equation (2) will give valuable information regarding the economic of fertilizer use in rice production. Objective 2: A simple estimating model will be used to meet objective
2. This model was initially developed by Ohkawa [431, and has been used by many economists, including Johnston and Mellor [26]. The model expresses the average annual growth rate in demand for food as a function of the rate of growth of population, per capita income, and the income elasticity of demand for food; In the case of domestic demand for rice, we have the equation:
EGDR = PN + IER IPC (3)
where,
EGDR = the annual rate of growth in domestic demand for rice.
PN = average annual rate of growth in the population.
IER = income elasticity of demand for rice.
IPC = rate of growth in per capita income.
Objective 3: A similar model to equation (3) is used to meet the third objective. It should be pointed out however, that in our discussion of investment, we are primarily concerned with such




45
factors as capital, land, labor, transportation, storage facilities, research and development resource allocation among crops. Hence, an identity between annual rice demand growth rate and annual supply growth rate will give us the relevant insight for the third objective. This identity is expressed as:
PN + IER IPC = SRD + SRF (4)
where,
PN, IER, IPC are as defined in equation (3)
SRD = annual growth rate for domestic rice production.
SRF = annual growth rate of rice import.
Any disequilibrium working against the domestic supply will be assumed to stem among other things from the lack of the necessary investments needed to increase domestic rice production, relative to export crops. Objective 4: In meeting this objective it is necessary to recall that economic theory demonstrates that price and quantity for substitute commodities tend to move together. The implication of this characteristic is that if the quantity of rice demanded has declined primarily because of relative increases in the price to consumers, the quantity consumed of the substitutes for rice must have risen.
In order to determine which commodity is likely to be a substitute for rice the following quantity demand equation is developed:
LNQDRT f(LNPRT, LNPWFT, LNPYT, LNPPT, LNPCFT, LNPMT
LNPCAT, LNAIPCT) (5)
where,
LNQDRT = the common logarithm of the quantity of rice demanded
at period t, in thousand metric tons.
LNPRT = the common logarithm of the average price of rice at
period t, in CFA francs per kg.
LNPWFT = the common logarithm of the average price of wheat
flour at period t, in CFA francs per kg.
LNPYT = the common logarithm of the average price of yam at
period t, in CFA francs per kg.
LNPPT = the common logarithm of the average price of plantain
at period t, in CFA francs per kg.




46
LNPCFT = the common logarithm of the average price of corn
and corn flour at period t, in CFA francs per kg.
LNPMT = the common logarithm of the average price of millet
at period t, in CFA francs per kg.
LNPCAT = the common logarithm of the average price of cassava
and cassava products at period t, in CFA francs
per kg.
LNAIPCT = the common logarithm of the average per capita
income, at period t, in CFA francs.
This procedure is convenient because the magnitude and signs of coefficients for LNPWFT, LNPYT, LNPPT, LNPCFT, LNPMT, and LNPCAT will indicate whether or not rice, wheat, yam, plantain, corn and corn flour, millet, cassava and cassava products are complements or substitutes. In addition, this double logarithmic function is expected to give statistically good estimates as suggested by George and King [22, p. 37].
With respect to the general objective, the empirical findings from the various models are expected to provide signficant insights into the critical problem areas, and provide the background for advancing a series of alternative policies and strategies for meeting national goals.
ANALYTICAL PROCEDURES AND EMPIRICAL RESULTS
Procedure Adjustments
The existence of certain gaps in the selected data series
necessitated the application of a number of econometric procedures for dealing with missing data. For example, zero-order regression procedures as suggested by Maddala [29, p. 202] is used as dictated by the nature of the missing series. Such a method was basically applied to missing data relevant to quantities and average prices of fertilizer from 1960 to 1963. The procedure was also used for data related to the prices to consumer for some commodities, such as yam, corn flour and millet, for the years 1960 and 1961, and plantain for the years 1960, 1961 and 1965 and 1966.




47
The double logarithmic form was chosen for equations (1) and
(2) used to meet the first objective of the study. This particular form provided a better statistical fit and theoretical consistency than the simple linear, semi-logarithmic or quadratic forms. The superior fit was established through a series of trial runs with alternative functional forms in which the double logarithmic function consistently gave higher R2 values and higher significance levels.
As indicated earlier, the double logarithmic function was also used to estimate equation (5) for the fourth objective. The choice of this particular functional form was based on the same rationale as stated above, with respect to superiority of fit and consistency with economic theory. The quantity of rice demanded for a particular year was estimated as a summation of 85 percent of the domestic rice production and the quantity of rice imported. The 85 percent figure of domestic production, representing its share in meeting the domestic demand, is the figure adjusted for an assumed 15 percent of domestic rice production assigned to the account of losses and quantities remaining on the farm for all purposes. Such a procedure was recommended by Amin [4] and was used in a 1977 study conducted by the West African Rice Development Association (ADRAG) [2].
Consumer price indices were used to deflate the commodity price and income that are used as explanatory variables in the empirical model for meeting objective four. These indices were developed beginning in 1960, for European and African families by the Ministry of Planning of the Ivory Coast-(Tables 12 and 13). The averages of these two categories of indices were used over the 1962-1972 period as a price and income deflator in the present study. For the years 1960 and 1961 only indices for African family were used, given that the development of indices solely for European family was initiated in 1962. The deflated prices and income will then be determined as follows:
DPit =Pit x 100 (6)
it




Table 12.--Average consumer price indices for European family, Ivory Coast 1962-1972a/
Items in
the "basket" 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972
------------------------------------------ Percent-------------------------------Food 105 106 110 115 119.2 119.5 120.5 123.6 129.2 136.1 142.8
Water, gas,
electricity 99 99 98 98 95.1 94.2 94.1 95.7 97.7 99.0 104.4
Clothing 116 121 124 130 133.3 128.3 144.1 145.8 150.5 153.8 154.1
Health or
medicare 113 114 115 119 122.2 123.2 145.2 150.7 157.9 166.6 171.5
Home care 110 110 117 117 117.0 120.0 125.8 130.0 149.2 153.0 153.0
Recreation,
transportation,
miscellaneous 113 115 120 124 125.4 128.3 131.4 135.0 139.1 143.4 148.4
Annual averages 108.2 109.5 113.5 118.0 121.0 122.2 126.7 129.7 136.2 141.8 147.0
/ Basis: 1960.= 100.
Source: [331.




Table 13.--Average consumer price indices for African family, Ivory Coast 1960-1972
Items in
the "basket" 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972
------------------------------------------- Percent ----------------------Food 106.5 123.0 118.7 118.3 118.9 122.4 127.6 126.6 134.8 141.6 163.0 160.1 158.3
Housing' 100.3 103.0 108.8 108.8 109.3 113.6 114.6 122.6 126.7 126.8 118.6 113.6 113.7
Water, electricity, combustible,
soap 93.4 99.4 106.0 102.9 105.3 110.1 102.8 108.0 109.8 114.3 133.1 139.0 145.3
Home appliances 100.6 98.1 100.2 103.8 107.8 106.2 110.9 115.4 124.1 126.3 138.3 145.1 152.8
Clothing 100.9 107.9 110.2 112.3 120.2 128.1 132.0 128.9 132.0 133.4 140.9 136.1 136.2
Services .101.0 101.7 102.7 102.7 98.4 94.1 94.9 94.9 107.5 106.5 108.7 111.8 114.4
Miscellaneous 99.6 99.7 103.7 104.9 112.5 118.1 156.2 191.5 193.6 196.1 198.0 198.0 200.0
Annual Average 102.9 112.7 112.4 112.4 113.9 117.0 121.9 124.6 131.4 135.6 148.9 147.7 148.2
a!
-Basis: February 1960 =100.
Source: [33].




50
where,
DPit deflated price for commodity i in period t,
Pit = price for commodity i, in current CFA francs in
period t,
It = arithmetic average of consumer price indices for both
African and European families. and,
DYt = Yt x 100 (7)
It
where,
DYt = deflated income in period t,
Yt = average per capita income in current CFA francs in
period t,
it = as defined in (5).
The income elasticity for rice is assumed to be .60 over the
period studied. This coefficient was derived from a FAO [18] study. This estimate is used in equation (3) and (4), which are in turn used to meet objective 2 and 3, respectively.
Rainfall estimates are computed as the annual average over the five month rainy period running from May to September. This period coincides with the rice farming months. The annual averages are computed from rainfall data for seven major rice producing areas as shown in Table 14.
Empirical Results
Relative Prices, Production, and Resource Allocation
From the estimating procedure used in equations (1) and (2), the average lag-price of export crops (LNPEGI), the quantity of fertilizer (LNFRT) and rainfall (LNRT), although exhibiting positive coefficients, were not significant at the 10 percent level.
The final results of equations (1) and (2) for objective (1) were:
LNQRT = -121.036** 2.178 LNPRGl* + .6o6 LNPEG1 (32.76) (.90) (.61)




Table 14.--Five month average rainfalls, selected rice growing areas, Ivory Coast, 1960-1972
Average all
Year Odienne Korhogo Bondoukou Touba Man Daloa Gagnoa areas
------------------------------------Millimeters
1960 ............ -- 936.33
1961 1232 733 601 762 920 657 727 804.57
1962 1263 1119 796 813 1028 901 836 965.14
1963 1171 1177 742 1076 1254 857 1167 1063.43
1964 1366 1158 602 879 1156 689 653 929.00
1965 1242 1116 726 912 1148 561 696 914.43
1966 1107 1068 839 911 1695 1200 794 1087.70
1967 1370 1012 490 1001 766 803 478 845.70
1968 1074 952 1021 950 1158 1245 824 1032.00
1969 1211 1200 337 768 887 565 1866 976.28
1970 1263 1157 482 749 755 755 667 832.57
1971 1324 915 718 637 1216 986 895 955.86
1972 1257 698 725 871 1040 672 542 829.28
a/ Estimated by the zero-order regression procedure used to handle missing data [ 29].
Source: Computations based on data provided by [4].




52
+ 1.437 LNART** .497 LNAET + .065 LNFRT
(.45) (.63) (.o6)
+ .122 LNRT + .o69 T
(.21) (.021)
R2 = .982 DW = 2.70
and,
LNQRT = -8o.845* 1.420 LNPRG1 + i.o68 LNR
(32.76) (.47) (.29)
RT** .451 LNRET* + 1.280 LNF
(.45) (.63)
PT** + .396 LNRT + .045 T*
(.o6) (.02)
R2 = .986 DW = 3.22
where,
= coefficients significant at the 1 percent level,
** = Bcoefficients significant at the 2.5 percent level,
* = coefficients significant at the 5 percent level,
( ) = values in parentheses are standard errors.
The characteristics of the coefficients suggest a number of interesting relationships between rice production and key economic variables. First, the negative coefficient of the own price lag for rice (LNPRG1) suggests that previous prices to producers were having depressing effects on production. Also, the negative coefficients for variables such as area under export crops cultivation (LNAET), and return to export crops (LNRET), suggest that these variables were working against domestic rice production. On the other hand, the lag price for export crops (LNPEGI), the return to rice (LNRRT), the area under rice cultivation (LNART), the price of fertilizer (LNFPT), rainfall (LNRT), and the time trend
(T), were found to be exhibiting positive effects on rice production.
Why would there be a negative relationship between the previous years average price for rice and the quantity of rice produced in any given year? This relationship probably can be explained by farmers response in the aggregate to certain historical trends in rice prices. Table 15 reveals that there has been a fairly extended




Table l5.--Average prices to producers for selected export cash crops and rice, Ivory Coast, 1960-1972
Year Coffee Cocoa Banana Pineapple Cotton Tobacco Palm Rice
------------------------------- CFA francs per metric ton------------------------------------1960 98,862 .91,000 19,807 13,477 29,516 84,270 3,156 18,000
1961 90,443 72,540 18,265 13,503 31,603 80,552 3,134 18,000
1962 78,013 65,997 15,628 13,435 33,754 91,273 3,191 18,000
1963 77,665 69,598 21,679. 12,807 30,667 95,918 .3,175 18,000
1964 92,000 71,998 25,143 11,315 33,772 89,081 3,260 18,000
Ln
1965 89,911 63,897 21,135 11,841 35,368 90,000 3,131 18,000
1966 78,025 69,551 19,566 11,785 36,600 89,216 3,389 18,000
19794,508 74,276 15,060 11,459 39,703 73,016 3,475 .18,000
1968 93,033 73,873 15,488 10,623 33,216 70,831 3,386 17,500
1969 94,103 79,166 19,002 11,814 33,298 72,036 3,518 20,000
1970 98,153 84,660 20,777 14,032 34,324 72,165 3,732 20,000
1971 106,559 85,940 20,937 14,182 38,990 73,798 3,665 20,000
*1972 106,428 88,422 21,263 13,069 39,432 74,668 3,800 21,200
Source: [32.




54
period when the average producer price of rice, vis-a-vis competitive export cash crops, has held fairly constant. In light of this historical trend there is likely to have been at least two ty-pes of conditioned response among farmers. First, farmers could have given up hope of expecting significant increases in rice prices and thereby reduce acreage under rice cultivation. Second, farmers could have shifted resources from rice production to higher pr iced competitive export crops and food crops. There are strong indications that the latter might have occurred, since the results indicate that the area under export crops and the return to export crops were working against domestic rice production. This aspect is discussed further in subsequent sections. In general, however, the behavioral implications of the results verify the component of hypothesis 1 suggesting that farmers will be more likely to increase their production of rice if the relative price of rice to producer is more attractive.
The positive effect of the lag price for export crops on rice production probably can be explained by the fact that rice being a major wage good, any increase in prices to producers of export crops will ceteris paribus, increase the income of export crops growers and people in the plantation areas, which in turn would increase the aggregate demand for rice. Having experienced this phenomenon in the past, rice growers will be inclined to respond positively to the lag of average price for export crops.
The negative sign carried by the coefficient of the average return for export crops suggests that as return to producers of export crops increases, rice growers will tend to shift from rice production to export crops that are more profitable. This shift could be slow for some crops such as coffee, cocoa and palm, but could be relatively fast for crops such as cotton, tobacco, pineapple and banana.
Hectareage under rice cultivation is having positive and significant effect on rice production. This finding is interesting, since as indicated earlier, the hectareage under rice cultivation has been declining over the 1967-1972 period, after reaching a maximum in 1967. It was also noted that average rice yields have remained fairly constant over the same period (Table 6). Given these trends, the sign and significance level of the rice hectareage variable could be indicative of the expansion over the pre-19.67 period (1950-1967).




55
Since average yields were low (less than one ton per hectare) the increased rice output must have been primarily associated with acreage extension as is the case in southeast Asia [141]. This interpretation is supported by the positive but non-significance level of the fertilizer quantity variable (LN\FRT). A major insight suggested by the negative coefficient of hectareage under export crops cultivation is that this hectareage is working against rice production. This relationship suggests that rice and export crops are competing for scarce land resources. Given the observed decline in rice hectareage and the relatively constant yields over the 1967-1972 period, it is possible that the more productive lands were transferred to higher valued export and other domestic cash crops. Tables 3 and 7 indicate that there were concomitant increases in both land under cultivation and value to producer of crops such as coffee, cocoa, cotton, palm and coconut over the 1967-1972 period. With such a system of land resource reallocation the remaining land used for rice production could have been marginal for that crop. The extensive use of marginal land to produce rice for home consumption and other purposes could probably explain the tendency for declining to constant yields registered over the 1967-1972 period (Table 6). This characteristic would tend to support hypothesis 2 regarding the tendency to reallocate scarce land resources in favor of higher valued crops.
As far as fertilizer use is concerned, the positive price coefficient refers to what Ferguson [19] calls the instantaneous measure of return to scale. In fact, the coefficient exhibited by the average price of fertilizer per ton is the reciprocal of the elasticity of total cost for fertilizer. Let us designate this coefficient as 7= 1.280 and K the elasticity of total cost. Following the Ferguson proposition would mean that K equals 4 which translates into a value of .78(- 1 )i h rsn ae
1.28)ithprsncae
Given the above findings, certain specific scale relationships are suggested. The smaller the value of 7 the instantaneous measure of return to scale, the greater is the proportional increase in cost, relative to a given proportional increase in output. This stems from the fact that K being expressed as a fraction, the smaller its denominator, the greater its absolute value.




56
Generally speaking, the above indication is supported by production theory, which states that ar' the instantaneous measure of returns to scale, normally varies inversely with output. In other words, for a small output, a7 should be greater than one ( 7>l). As output increases, 7 decreases to one ( 7=l), and down to a value less than one (07<1). This supports the fact that given a regular production law, cost first increases at a decreasing rate, goes through a point of inflection then increases at an increasing rate.
Computations based on our findings show that the elasticity of the marginal cost of fertilizer was .22 over the period 1960-1972. This figure could suggest that over the period, the use of an additional unit of fertilizer in rice production would lead to a less than proportionate rise in the cost.of fertilizer. More precisely, this meant that an increase of 1 percent in the use of fertilizer for rice from 1960 to 1972 would result in an additional cost per unit of output of only .22 percent. The policy implication of this finding will be addressed in subsequent sections.
The last two coefficients of equations (1) and (2) show that the effects of rainfall and the time trend carry positive signs. As indicated earlier, this suggest that these variables were working in favor of rice production. The positive coefficient of the time trend variable and its high significance at the 2.5 and 5 percent levels in equation (1) and (2), respectively, indicate that some improvement took place in rice production from 1960 to 1972. This is supported by data in Table 6 and Fig. 3. However, the non-significance of the rainfall variable in both equations suggests that the increased rice output was not strongly associated with rainfall.
Growth in Rice Demand
The results of equation (3) shows that the annual growth rates of demand for rice had a fluctuating trend over the 1960-61 to 1972-73 period (Fig. 5). The lowest annual growth rate (EGDR), recorded for the period was 1.6 percent in 19614-65, while the highest rate was 114.2 percent in 1963-64. The average annual growth rate in demand over the entire period was approximately 7 percent (Table 16).




Percent Annual Growth rate
14.0 12.0 10.0 8.0 6.0
4.0 2.0
0
1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974
Figure 5. Trend of rice annual demand growth rate, Ivory Coast, 1960-61 to 1972-73.




Table 16.--Differences between aggregate domestic supply and demand growth rates for rice,
Ivory Coast, 1960-61 to 1972-73
Aggregate Supply Aggregate Aggregate Aggregate
Domestic Domestic Domestic
Total Domestic Imports Dmn upyDmn
(S) (R)(R)Demand Supply > < Demand
Year (TSR) (SRD) (SRF) (EGDR) (SRD) (EGDR)
----Percent-1960-61 39.7 -2.5 42.2 7.80 <
1960-62 42.1 47.4 5.3 2.04 >
1962-63 -33.8 4.3 -29.5 10.08
1963-64 98.7 12.7 86.0 14.22 <
1964-65 10.5 0.8 9.7 1.68 1965-66 30.9 10.0 20.9 6.66 >
1966-67 -44.9 26.1 -71.0 4.80 >
1967-68 101.0 5.2 95.8 10.86 <
1968-69 0.8 -17.0 17.8 7.08 <
1969-70 46.0 4.3 41.7 7.86 <
1970-71 45.3 21.8 23.5 7.08 >
1971-72 -43.1 -16.9 -26.2 2.40 <
1972-73 13.7 4.7 9.0 8.22 <
Average 23.61 7.10 16.51 7.00
Source: [16, 33, 471.




59
However, of the thirteen time periods included in the table, there are eight periods in which the annual demand growth rate exceeds the overall average. Intra-period variation in the annual growth rate of rice demand probablyreflect a direct relationship with changes in the intra-period rate of growth in per capita income. Since the population growth rate and income elasticity for rice were held constant over the entire period, this means that the variation in demand growth rate was associated with variation in per capita income growth rate. Specifically, when the annual growth rate of per capita income increases or decreases, the gross annual growth rate of demand for rice would tend to increase or decrease likewise (Table 17).
The obvious strong relationship between income and the demand for rice should not be interpreted to mean that population and consumer tastes and preferences are not important constituents of demand changes in the Ivory Coast. On the contrary, these variables have to be accorded high priority in development planning within a dynamic framework. In fact, data published by the World Bank [50] indicate that the average annual population growth rate was 4.2 percent over the 1970-1975 period. What the findings in the present study do suggest, however, is that increased effective demand is a vital component of food (rice) expansion programs. Increases in effective demand are accomplished by improvement in the income position of a wide segment of the population. This means that special attention must not only be given to efforts to increase and sustain growth in national income, but to how that income is distributed among the population.
Rice Supply and Demand Equilibrium
As stated earlier, the estimating procedure used in equation
(14) to meet the third objective is an identity between the annual domestic rice demand growth rate and the annual rice supply growth rate. The result of such a procedure provided important insights as to the extent to which a persistent disequilibrium existed between domestic rice supply growth rate and the rate of growth in rice demand.




Table 17.--Estimates of average population, average per capita income, aggregate demand growth
rates, income elasticity, Ivory Coast, 1960-1972
Average population Income elasticity Average per Aggregate demand
annual growth rate for rice capita income
Years (PN) (IER) (IPC) (EGDR)
--------------------------------------- Percent -----------------------------------1960-61 3.0 60.0 8.0 7.80
1961-62 3.0 60.0 -1.6 2.04
1962-63 3.0 60.0 11.8 10.08
1963-64 3.0 60.0 18.7 14.22
1964-65 3.0 60.0 -2.2 1.68
1965-66 3.0 60.0 6.1 6.66
1966-67 3.0 60.0 3.0 4.80
1967-68 3.0 60.0 13.1 10.86
1968-69 3.0 60.0 6.8 7.08 w
1969-70 3.0 60.0 8.1 7.86
1970-71 3.0 60.0 6.8 7.08
1971-72 3.0 60.0 -1.0 2.40
1972-73 3.0 60.0 8.7 8.22
Average 3.0 60.0 6.6 7.0
Source: [16, 33, 47].




61
The average growth rate for domestic supply was 7.10 percent over the 1960-61/1972-73 period (Table 16). However, the yearly distribution around that average varied widely. The dispersion varied from a -17 percent in 1968-69, to a h7 percent ih 1961-62. The annual disequilibrium was detrimental to the supply side on nine occasions from 1960 to 1973. This meant that domestic supply growth rate exceeded the demand growth rate in only four of thirteen cases (Table 16). Gaps created by disequilibrium against the supply side were being met by rice imports. These findings suggest that the domestic rice production system was exhibiting insufficiency or inefficiency in resource allocation in land, research, education and training, transportation and marketing, without which any attempt to increase domestic rice supply was likely to fail.
Rice Substitutes and Complements
From the estimating procedure specified in equation (5), the following final results were obtained with respect to objective 4:
LNQDRT = 1.256 .069 LNPRT .182 LNPWFT (8.03) (.22) (.15)
+ .382 LNPYT .078 LNPPT .399 LN (.18) (.15) (.19)
PCFT** .140 LNPMT + .600 LNAIPCT*** (.17) (.17)
R2 = .956 DW = 2.636
where,
*= coefficient significant at the 5 percent level,
** = coefficient significant at the 10 percent level,
( ) =values in parentheses are standard errors.
The average price of cassava and cassava products (LNPCAT) was dropped out of the final run because of multicollinearity with some of the other independent variables such as the average prices for yam, corn and corn flour and millet. However, the first run shows that this coefficient although not significant at an appreciable probability level carried a negative sign.
As stated earlier, the signs of the coefficients for the




62
independent variables will be the key indicators used to distinguish the commodities that were complements from the ones that were rice substitutes over the 1960-1972 period. The results from equation
(5) indicate that, with the exception of the average price for yam (LNPYT) and the income variable (LNAIPCT), all the remaining independent variables exhibited coefficients with negative signs. This implied that, over the period 1960-1972, yam was the only commodity used as a substitute for rice.
The coefficient of rice average own price (LNPRT) is negative as expected. However,*the magnitude of the coefficient (- .069) suggests that rice was extremely price inelastic over the 1960-1972 period. The negative sign exhibited by wheat flour's average price (LNPWaFT) suggests that wheat flour and rice were complements. On an a priori basis, one would expect wheat products to be substitutes for rice because of the higher income elasticity of the former(7) as indicated in the study conducted by the FAO [18]. It is possible that this result is related to the nature of the pricing data used in the estimating equation. Specificially, the pricing data for wheat does not include the price of other wheat products, such as semolina and bread. In addition, the results could have been affected by the fact that wheat prices were at the wholesaler level rather than at the final consumer level. The choice of such pricing data was dictated by data availability.
The positive sign of the yam price coefficient provide economic insights in light of the fact that yam was the commodity being substituted for rice. It implies that anytime the price of rice rose, relative to the price of other commodities, that consumers would move away from rice to yam consumption in such a way that the quantity purchased of yam would move in the same direction as the price of rice. Commodities such as plantain, corn and corn flour, millet and cassava were found to be complements of rice.
Consumers in the Ivory Coast were assumed to spend 60 percent of their disposable income on rice as indicated by a FAO [181 study. The income elasticity for rice, which is given by the coefficient of the income variable was, therefore, maintained at the 60 percent level over the 1960-1972 period. To the extent that the assumed




63
income elasticity might not reflect recent changes in consumer preferences, inferences regarding the strength of the substitutability and complementarity between rice and the other commodities should be made with caution. In fact, to be able to state that yam and rice are strong substitutes or that rice and wheat flour, plantain, corn and corn flour and millet are strong complements would require a separate estimating equation for each commodity. If the coefficients of the average price variable for rice in these demand equations exhibited the same signs as wheat flour, yam, plantain, corn and corn flour and millet in equation (5), then one could say that yam and rice are strong substitutes, while rice and wheat flour, plantain, corn and corn flour and millet are strong complements. ,
If, on the other hand, the signs of the coefficients are otherwise, then one could say that the commodities were respectively weak substitutes and complements.
POLICY IMPLICATIONS, RECOMMENDATIONS AND CONCLUSIONS
In this section: (a) the policy implications of the empirical findings, in relation to the economic performance of the Ivory Coast rice economy, are reviewed, (b) a series of policy reforms designed to improve the overall performance of the rice subsector are proposed, and (c) conclusions with respect to the important dimensions of the study are summarized.
Policy Implications
Discussion regarding specific policy implications of structural characteristics only attain meaning with a pragmatic frame of reference. In the case of this particular study the relevant framework is the general objective of the study. This objective was to formulate a series of development strategies that would stimulate domestic rice production to levels consistent with national self sufficiency targets in rice production. The strategy series were to be based on the empirical findings relating to the specific objectives of the study. Policy implications of specific problem areas are discussed below.




64
Dependable and Remunerative Price Relationships
From the results of equations (1) and (2) it was shown that previous prices to rice growers were having adverse effects on current production. This evidence highlights the fact that the higher and more dependable the price offered to farmers for rice, the greater is the possibility of a positive supply response. In other words, a remunerative price for rice to producers, like any other farm product, is both important and necessary in increasing the quantity produced and brought to the market. Moreover, given the inherent year to year or preharvest to postharvest fluctuations in farm product prices, the setting of dependable and profitable prices to farmer becomes a requirement if the country's goal is to increase quantities produced. The reasoning behind the dependable and profitable prices for farm products can be understood if one bears in mind the fact that there is a long tradition of subsistence type of farming, where production was primarily for home consumption. The necessity and incentive for a market oriented production system only arose in a more recent period when the economy had achieved a certain level of monetization. In such a newly monetized economy, as the one of the Ivory Coast, farmers are inclined to base their net return estimates on the actual or expected market prices of their products. If they face unpredictable, unprofitable and unstable prices, there will be less incentive to increase output.
The magnitude and the sign of the coefficients for the price of rice to producer in equations (1) and (2) provide some insight with respect to the impact of a poor pricing policy on the level of output over the 1960-1972 period. Therefore, since farmers are found to be highly responsive to a profitable price level and price dependability, any policy aiming at achieving overall or subsectoral agricultural growth must consider setting a pricing system favorable to farmers.
Structural Bottlenecks in the Farming System
A major finding relating to land in equation (1) is that hectareages under rice cultivation had a positive and highly




65
significant effect on rice production, whereas the area devoted to export crop production exhibited an adverse effect on rice production. Light was shed on this matter in 1956 by Buron [11, p. 1054] who pointed out that the use of land for production of export crops, rather than for local food crops, is a major reason for concern about food supplies. For him, the food supply problems were likely to hamper economic development in French West Africa because concentration on export cash crops has led to neglect of food crops. The policy implication from such a competitive pattern between lands allocated to export crops and rice is the development of intensive methods of cultivation for rice, other food crops, and export crops. The negative coefficient carried by the LNAFT variable (hectareage under export crops), although relatively small and non-significant, gives a positive insight as to the critical time at which the competition between the two types of crops may become a matter of great concern.
The coefficient exhibited by the price of fertilizer variable (LNFPT) in equation (2) and its high significance at the 2.5 percent level, suggests that there are sufficient sound economic reasons for a more general use of fertilizer in the rice production system in the Ivory Coast. The evidence that (a) the coefficient of the fertilizer price variable called the instantaneous measure of return to scale for fertilizer was greater than one (1.28) and,
(b) that the elasticity of the marginal cost of fertilizer was also less than one (.22), support the policy implication that an increase in the use of fertilizer as suggested above, is needed in order to make its use more profitable in the rice subsector. However, since the quantity of fertilizer variable was nonsignificant in equation (1) the implication is that there was sub-optimum use of fertilizer in rice production, to the extent that in the aggregate rice producers were operating in the non-economic region of their production function. This finding relating to the quantity of fertilizer, in conjunction with the fairly constant yield per hectare recorded in the rice sector from 1966 to 1972 (Table 6), support hypothesis 3.
The policy implication from the highly nonsignificant level of the quantity of fertilizer, even though it would pay to extend its




66
use, suggest (a) efforts to increase the quantity of fertilizer used in the rice subsector and, (b) an improvement in fertilizer pricing and distribution systems in order to make it available to the small and traditional farmers at profitable levels.
From the results of equation (3) it can be said that the basic variables to be considered carefully in estimating the aggregate annual demand for rice are primarily the annual growth rates for population and per capita income, and the strength of the income elasticity for rice. Although the annual growth rate for population and income elasticity for rice were held constant at 3 percent and .60, respectively, their magnitude cannot be overlooked. In fact recent data published by the World Bank [50] show that the population annual growth rate in the Ivory Coast averaged 4.2 percent over the 1970-1975 period. However, given that the annual
growth rate for populations and the income elasticity were held constant in the present study, the key variable appears then to be the annual growth rate of per capita income. Therefore, if more accurate estimates could be developed for per capita income, population growth rates, and income elasticity for rice, more accurate forecasts of the future demand for rice could be made.
Resource Allocation
As to the question of rice supply and demand growth rate disequilibrium it was stated that any imbalance against the domestic supply would be assumed to be strongly related to signficiant differentials between investment efforts in export and rice crop systems. The empirical evidence with respect to the allocation of land to rice and export crops in equation (1) has been identified with a competitive relationship between the two crops for land. Besides, results from equation (4*) show that the disequilibrium between annual demand and domestic supply growth rates works nine of thirteen periods (70 percent) against the supply side, from 1960 to 1973 (Table 15). Moreover, these disequilibria are indications that the effective demand for rice was growing more rapidly than domestic rice supply.
The high nonsignificance of the fertilizer quantity variable




67
in equation (1), in conjunction with the persistent lag of domestic production behind the effective demand for rice in equation (4), suggest that more investment should be made in the rice subsector in order to increase and facilitate its productive capacity.
Product Substitutability
As to the complementarity and substitutability for rice, the empirical findings suggested that yam was the only substitute for rice over the period 1960-1972. In a study of the distribution of the staple food crops in the Ivory Coast in the 1950s, Mi~ge [31] concluded that there was basically a fairly sharp division between the rice region to the west and the yam region to the east of the Bandaina (Fig. 2). This feature, explained by historical and cultural factors, has a major effect on the cropping system and consumption pattern of the different ethnic groups in the Ivory Coast. Furthermore, Mi~ge suggested that the dividing line between the two distinct cultures within the country could be generalized to all of west Africa. He writes [31, pp. 33-37]:
The Western region of West Africa is a zone devoted to rice. There the role of the yam is strictly secondary, so much so that the most recent agricultural statistics
for French Guinea and Senegal do not even mention its
existence...
To this immense rice zone, is opposed the domain of the
yam. Between the Baoul6 and the Cameroons, the yam becomes the essential crop about which agricultural
activities revolve. If, as happens in portions of
the region, it yields its dominant position to another
crop, its social importance remains considerable. It
manifests itself in a May festival, object of rejoicing,
which is one of the outstanding dates of the year in
the life of these tribal groups. This is the case,
for example, in the District where yams as a crop
have come to be of secondary importance.
The results of the present study support Mi6ge's findings as
to the importance played by rice and yam in consumer choices in the Ivory Coast UP to 1972. This evidence is corroborated by the substitutability of yam. The policy implication stemming from the above findings with respect to the improvement of human nutrition




68
is the need to promote greater diversification in the final consumers' food commodity bundle.
Recommendations
Dependable and Profitable Pricing System
One of the empirical findings from equations (1) and (2)
indicate that the price system depressed the domestic production of rice over the 1960-1972 period. One insight gained from these findings is that a remunerative price for rice is both important and essential for the growth and development of the rice subsector. In light of this finding, it is suggested that a positive price system, favorable to rice growers, be devised as an integral component of the development plan for the country's agricultural sector. According to Krishna [28, P. 5031,
If and when a positive price policy does become a
part of growth policy, it has three functions: (1) to accelerate the growth of agricultural output as
a whole; (2) to accelerate or decelerate the growth of the output of individual crops or, in the context
of planning, to steer the crop-mix according to
targets; and (3) to secure adequate increases in the
marketed supply of food crops in countries where a
large part of output is retained by the peasants for
home consumption.
In the case of the Ivory Coast, pricing functions (1) and (2), as outlined by Krishna, take on a high degree of significance. Also, given the relatively high monetized economy of the country, achieving the third function will greatly depend on the extent to which the other two functions have been fulfilled. It should be understood that a high and stable price system will provide the economic incentive to farmers to adopt the new farming technology identified with the use of fertilizer, improved seeds, pesticide and intensive farming. This simply means that a non-remunerative or unstable price system for a specific farm crop will only be an impediment to any induced investment to sustain the growth and promote the development of this specific crop sector. Building and Singh [9, p. 4] depict this aspect of the farm sector when they write:




69
If agricultural prices are low, resources will move
out of agriculture but, on the other hand, investment
will not be made in it. If agriculture prices are
high, investment will be made in it but resources
will not move out of it.
Some evidences from 1972-1975 data highlight the extent to
which rice farmers in the Ivory Coast areresponsive to a profitable price. For instance, in 1975 the increase in the production of paddy rice was 41 percent over the 1972 level of output. At that point in time, the average price to producer for paddy rice had increased from 21 to 67.5 CFA francs per kg, an increase of 221 percent over the 1972 price level [32, p. 271. This price-supply response should serve as a basic guideline to future pricing policy for farm products, since it indicates that even in a low income country, farmers are responsive to price changes.
Addressing himself to this matter, Mellor [30, P. 381 writes:
Accumulating evidence for low income countries indicates relatively high supply elasticities for individual commodities. In some cases farmers in low income countries
appear more responsive to relative price changes than
those in high income countries.
Regarding the specific case of staple foods in western Africa, Johnston [27, p. 2601 writes:
It is to be emphasized that the elasticity of supply for food products is necessary greater than for total
agricultural output because of the possibility of shifting land, labor resources between production of export
crops and food crops.
These findings suggest that if a dependable and profitable price system were devised for a specific food crop sector, it could grow more rapidly than the overall agricultural sector. Moreover, specific findings from equation (1) indicate that the lag-price of export crops was having nonsignificant but positive effects on rice production through increases in demand for rice. However, if is to be borne in mind that unless adequate price and resource allocation strategies are developed, the increases in export crop producer income will result in reducing supply of rice in the long run as resources shift to export crops. This contention is supported by (a) the competitive




70
scheme between rice and export crops for land resources, as indicated in equation (1), and (b) the negative effect of returns from export crops as indicated in equation (2).
An Intensified Farming System
As pointed out earlier, a competing scheme between hectareage allocated to rice production and area under export crop cultivation existed over the study period. This finding, in conjunction with the evidence that rice production was highly dependent on hectareage, underscore the need for more intensified farming system in both food and export crop subsectors.
The intensification scheme, in order to promote the growth and development of the farm sector in general, and the rice subsector in particular, should be concomitant with a land reallocation policy. Such a policy could serve to limit hectareage allocated to specific export and food crops. Given that in a monetized economy, with a favorable price system farmers are more likely to increase their income, the only alternative to achieve this goal will be to intensify production, since a constraint would have been imposed on hectareage expansion. However, the policy of bringing farmers from extensive type food and export crop systems to an intensified method of farming will succeed if there are other facilitating policies. Supporting policies and programs would include, among other things, positive pricing policies, new inputs, input and output subsidy, credit facilities and appropriate marketing institutions.
The availability of new inputs is a crucial component of the intensification program. Farmers will only use the new inputs if they are locally available at economical prices, relative to the expected value of the product. In the present study, the magnitude of the instantaneous return to scale for fertilizer (1.28 ), in conjunction with the marginal cost of fertilizer in the rice subsector, indicates that in the aggregate it was highly economical to promote the use of fertilizer in producing rice. However, failure to provide the rice subsector with the appropriate amount of fertilizer depressed its growth and development over the 1960-1972 period. The responsiveness of the rice subsector to fertilizer offers a solid foundation




71
for intensification programs in the rice production system. In light of the aggregate fertilizer responsiveness, efforts should be made to increase its quantity and extend its distribution in the overall rice subsector as an integral part of the intensification program.
Subsectoral Investment Levels
If the long-term growth and development of the Ivorian export cash crops subsector can be explained on the existence of an effective demand for its output, then the rice subsector should also have grown and developed for a similar reason. In fact, results from equations (3) and (4) indicate that the effective demand growth rate for rice exceeded the domestic supply growth rate in nine of thirteen years, from 1960 to 1972 (Table 16). Given the existence of such an increasing effective demand, and the inability of the rice subsector to meet that demand, it seems reasonable to assume that the differential performance in the export subsector and the rice subsector were partially due to differentials in investment levels between the two subsectors. For example, the low and sub optimum use of fertilizer in the rice subsector supports the contentions that underinvestment was a major problem in that subsector.
In light of these inferences it is suggested that investment endeavors in research and development, transportation, storage facilities and improved marketing channels be undertaken in order to promote growth and development in the rice subsector. Investment strategies relating to these components are discussed below.
Research and development
Efforts undertaken in this area should be oriented toward the development of adaptive local varieties, highly responsive to fertilizer and resistant to disease. The ultimate purpose of such an enterprise is to make new technology available to farmers and thereby increase their productivity. In order to be highly productive, fertilizer should be used with improved varieties highly responsive to fertilizer. Therefore, a failure to provide the new improved variety along with fertilizer will have an adverse effect on the yield in




72
the rice subsector. On the other hand, the success of the research
endeavor will result in relatively lower and profitable prices to farmers and would be in the best interest of consumers.
Transportation and storage facilities
The underlying reasoning in favor of investing in transportation infrastructure is that differences in transportation costs could result in significant differences in crop profitability, even with farms of similar physical characteristics. Developing the road network will reduce the cost of transportation of both inputs and products.
The problem of food commodity storage and transportation is not new in West Africa. On the basis of his study in Ghana (the former Gold Coast), during the 1930s, Beckett [7, P. 761 concludes;
Food problems in the Gold Coast have not been those of production, but of distribution. Centers of increasing
population have sometimes outstripped the increase in
cultivation of foodstuffs within economic radius.
Referring to the specific case of peasants in the village of Akokoaso in the cocoa belt, Beckett indicates that bulky food commodities, such as plantain and cocoyam, were overproduced and much of this production was left to spoil in the farms. He attributed this condition to-costly and inadequate storage and transportation facilities. For the Ivory Coast, the importance of improving rice transportation facilities from the north toward urban areas was emphasized by Dumont [13, P. 841 in the early 1960s.
The need for investing in well designed and adequate storage facilities arises as a traditional farming system becomes market oriented. One has to bear in mind that consumer demand for rice extends beyond the harvest period. Therefore, in order to make rice available to them all year round, rice has to be milled and stored. In 1977, Skinner [49, p. 11] in reviewing the agricultural production of the Ivory Coast writes:
Rice production has increased to the point of surplus
with milling and storage facilities inadequate to
handle all of the crop.




73
Interestingly enough, the Ivory Coast faced a severe rice shortage in 1977. In light of the above situation, there are strong indications that this shortage was primarily associated with underinvestment in storage facilities on the one hand and inefficient market systems on the other hand. Such a situation gives support to the suggestion that the Ivory Coast is encountering to some degree "second generation problems" of the Green Revolution as described by Falcon [1)4].
Efficient marketing system
Consumers are interested in minimizing cost with respect to the quantity and quality of rice purchased and farmers are interested in obtaining the highest possible net returns from the sale of their rice. An efficient marketing system will serve both purposes. In such a market oriented rice production system, it is clear that the cash returns to producers will heavily depend on their products reaching the final consumers. The need then for dependable marketing channels becomes essential to effectively bridge the gap between rice producers and consumers. This suggests that the development of an efficient marketing system should be an integral part of the overall subsector development strategy. An inefficient and uncoordinated marketing system will be translated into excessive marketing costs. High marketing costs could mean low prices to producers and high prices to consumers. On the other hand, greater quantities are more likely to flow through less complex and less costly marketing channels. Therefore, the improvement and expansion of market facilities should be concomitant with the growth in the rice subsector in order to maintain the output momentum among rice producers. The improvement in market facilities will not be spontaneous as a response to price incentive, it will rather depend on marketing strategies aiming at
(a) providing market information and quality control, (b) encouraging competitive behavior among market participants and (c) establishing grades and standards in the best interest of producers and consumers, to name a few.
Thus, with all the adverse situations experienced in the rice subsector in the Ivory Coast, and because such situations do not




74
exist in the export crop subsector, it can safely be said that a reasonable explanation of the inability of the rice sector to meet the increased effective demand is in large part attributable to the skewness in infrastructural investments in favor of the export crop subsector.
Commodity Substitution and Nutritional Goals
It is suspected that the inability of the rice subsector to meet the increased effective demand for rice was reflected in equation (5) by the substitutability of a poor protein-content commodity (yam), for rice, a relatively high protein content commodity (Table 10). Although rice appears to be highly price inelastic for the empirical results discussed earlier, it nevertheless appears profitable to increase its production. This reasoning is based on the fact that the average annual population growth rate, the magnitude of the income elasticity for rice and the strength of the income variable will likely shift the long-run demand upward by such a magnitude, that the long-run decrease in price, due to an increase in the quantity produced, will be offset by an increase in the quantity purchased by consumers.
The tendency to substitute a poor protein content commodity for rice could be inconsistent with national efforts to improve the nutritional status of the population. From this point of view increased efforts should be made to encourage the consumption of higher protein content locally produced commodities, such as maize, meat, milk, eggs, fish and vegetables. Each of the above commodities exhibits a higher income elasticity than rice and yam [17, P. 174]. Therefore, if the average per capita income growth rate continues at a level similar to or in excess of the 1960-1972 rate of 6.6 percent (Table 17), the diversification policy for the commodities contained in the consumer bundle of food items will have a greater chance to succeed. However, it is recommended that such a policy be linked to the implementation of another set of policies enabling the domestic farm sector to provide the major share of the new set of commodities to be made available for consumers. For shifting consumption patterns to generally higher income elasticity commodities




75
to be imported would lead to a drain of scarce foreign exchange earnings needed for investment in the national economy.
Conclusions
The empirical results of the present study reveal that the
achievement of self-sufficiency in rice production for meeting the domestic demand depends, among other things, on the implementation of a set of positive policies relevant to the agricultural sector in general. Policy designed to enable the rice subsector to exhibit a positive response to the effective demand for rice would primarily involve the implementation of a dependable and profitable price system for farmers producing rice. Since it appears that rice and export crops are competing for land, and because increases in rice production are still greatly dependent on extended hectareage, a structural change in the agricultural sector becomes a basic requirement for development of the rice subsector. Such a structural change should emphasize a more intensive farming system in both the food and export crop subsectors. Given that the suboptimal use of fertilizer in rice production, its adoption by farmers should be regarded as the stepping stone toward a wide range intensification scheme. Therefore, the availability of fertilizer, along with improved seeds to farmers, should be a primary condition to be met.
With respect to the aggregate annual demand for rice, it is
evident that maximum attention would have to be given to the income components. Per capita income annual growth rate appears to be among major shifters of the demand for rice. However, the population component should not be neglected, especially in a country such as the Ivory Coast where the population average annual growth rate is increasing.
Findings suggest, on the one hand, that a growing income level, in combination with a high income elasticity for rice, are associated with an increased effective demand for rice with which domestic production fails to keep pace. On the other hand, the inability of the rice subsector to meet such a growing effective demand is believed to originate from the unprofitable price system for farmers




76
in the rice subsector, and the low level of the necessary investment to grow and develop the food sector in general and the rice subsector in particular. Therefore, it is felt that a positive pricing system along with investment to develop improved variety, adoption of fertilizer, and building of storage facilities would improve growth and development in the rice subsector.
Results suggest the need for policies and programs designed
to shift consumption patterns from poor nutrient content commodities to higher protein content commodities. The policy of improving human nutrition would involve orienting the shift from rice to more nutritive value local commodities such as maize, meat and other animal products, fruits and vegetables.
In general, meeting the national demand for rice without resorting to costly imports will heavily depend on how the recommendations relevant to the solutions to the specific problems will be carried out. In any case, failure to develop an adequate pricing system in the rice subsector, and undertake the structural changes along with the necessary investments in that subsector will simply result in persistently poor performance.




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