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Presentation by Dr. Bekele Shiferaw (CIMMYT) at Wheat for Food Security in Africa conference, Oct 8, 2012, Addis Ababa, Ethiopia.
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Potential economic profitability and competitiveness of wheat production
in SS Africa
Bekele Shiferaw, Asfaw Negassa, Jawoo Koo, Kai Sonder, Melinda Smale, Stanley Wood, Hans Braun,
Thomas Payne, Zhe Guo, Sika,Gbegbelegbe
Wheat for Food Security in Africa Conference
8-10 October 2012, Africa Hall, UNECA, Addis Ababa, Ethiopia
Outline • Introduction –
– Widening gap and challenges to food security
– Can SS Africa produce some of its requirements to reduce dependence on imports?
– How large is this potential?
• Methodology for analysis of SS Africa’s potential
• Main findings of the study
• Production potential
• Conclusions
• Policy implications
20
30
40
50
60
Kg/y
ea
r
19
60
19
70
19
80
19
90
20
00
20
10
Per capita consumption Per capita production
Source: Based on FAOSTAT database.
Widening gap – per capita consumption and production
46.1
2.6 1.6
45.8
53.3
40.7
0
10
20
30
40
50
60
EasternAfrica
MiddleAfrica
WesternAfrica
NorthernAfrica
SouthernAfrica
Africa
Wheat self-sufficiency (%), 2007-2009
Average area and production of wheat in Africa (2008 - 2010)
Country Area (1000 ha) Production (1000 tons)
Self-sufficiency (%)
Algeria 1,585.1 2,388.1 29.33
Ethiopia 1,520.7 2,725.4 64.33
Egypt 1,283.2 7,889.7 45.78
South Africa 649.5 1,839.3 59.50
Tunisia 585.2 1,131.6 40.93
Sudan 308.8 543.9 25.38
Kenya 140.6 356.0 40.12
Libya 133.3 105.0 6.71
Tanzania 49.0 92.9 11.00
Rwanda 48.1 72.5 73.01
Nigeria 34.7 51.3 1.40
Others 141.8 340.9 5.24
Africa 9,376.0 22,542.3 38.8
Widening gap between wheat production and consumption in Africa
Sub-Saharan Africa All Africa
0
5
10
15
20
25
19
61
19
65
19
69
19
73
19
77
19
81
19
85
19
89
19
93
19
97
20
01
20
05
20
09
Mill
ion
to
ns
Demand Production
Gap
40
50
60
70
80
90
19
60
19
70
19
80
19
90
20
00
20
10
East Africa
-20
0
20
40
60
19
60
19
70
19
80
19
90
20
00
20
10
Middle Africa
40
50
60
70
80
19
60
19
70
19
80
19
90
20
00
20
10
North Africa
50
100
150
200
250
19
60
19
70
19
80
19
90
20
00
20
10
Southern Africa
0
5
10
15
20
19
60
19
70
19
80
19
90
20
00
20
10
West Africa
40
50
60
70
80
19
60
19
70
19
80
19
90
20
00
20
10
Africa
Source: Prepared by authors based on FAOSTAT database.
for selected regions in Africa (1961-2010)
Trends in wheat self-sufficiency ratio
Challenges of reliance on import markets
• Weather induced supply disruptions
• Price spikes and price volatility in food markets
• Diversion of maize for biofuels production and pressure on food prices
• Speculative selling and buying behaviors
• Wheat export restrictions by exporting countries
• Foreign exchange shortages by SSA countries
Are African policy makers willing to take this risks for national food security?
Can this import dependence be reduced through domestic production in SS Africa?
Objectives of the study
• Assess to what extent domestic wheat production in selected countries of SS Africa would be agro-ecologically feasible and economically profitable and competitive to imports under rainfed systems using existing varieties.
• Jointly conducted with IFPRI (HarvestChoice) and CIMMYT
Modeling approach • GIS analysis. A number of biophysical suitability mapping
approaches were evaluated and utilized to delineate suitable agro-ecologies as a basis for running the crop growth model.
• Crop growth simulation. CERES-Wheat model in the DSSAT was used to estimate rainfed wheat yield responses at the pixel level:
• No fertilizer
• 50% of recommended fertilizers
• 100% of recommended fertilizers
• Fertilizer and grain transport cost modeling. Spatial analysis using road network and land cover data to estimate pixel-specific unit transport cost (for fertilizer and wheat produce).
• Net economic returns – computed using pixel level import parity prices for wheat and imported inputs
GIS analysis – suitability mapping
IIASA FAO GAEZ map Ecocrop map
Economic profitability analysis
Aggregation and sensitivity analysis
• If pixel level production is profitable using imported fertilizer and
import parity prices, wheat production is considered profitable and
competitive to imports.
• National potential is then estimated at different levels of profitability
and competitiveness by aggregating returns from pixel level simulations.
• Sensitivity analysis. The robustness of the estimated potential was then
evaluated against plausible changes in:
– wheat prices,
– fertilizer prices,
– grain yields,
– marketing costs, and
– climate change.
Map of study countries
Results and discussion
Country Average
(kg/ha)
Angola 1055
Burundi 2886
Ethiopia 2348
Kenya 3087
Madagascar 2175
Mozambique 1052
Rwanda 3681
Tanzania 1986
DRC 1655
Uganda 2861
Zambia 1462
Zimbabwe 911
Yield under low intensification (all pixels)
Country Average
(kg/ha)
Angola 1542
Burundi 3208
Ethiopia 2972
Kenya 3410
Madagascar 2605
Mozambique 1287
Rwanda 3986
Tanzania 2219
DRC 2059
Uganda 3383
Zambia 1933
Zimbabwe 1394
Yield under medium intensification (all pixels)
Country Average
(kg/ha)
Angola 1886
Burundi 3395
Ethiopia 3395
Kenya 3617
Madagascar 2874
Mozambique 1444
Rwanda 4151
Tanzania 2372
DRC 2325
Uganda 3728
Zambia 2252
Zimbabwe 1744
Yield under High intensification (all pixels)
NER under Low intensification (for pixels
NER>0) Country Average NER
(US$/ha)
Pixels with
positive NERs
(%)
Angola 195 22
Burundi 905 100
Ethiopia 618 71
Kenya 802 91
Madagascar 524 73
Mozambique 111 15
Rwanda 1314 96
Tanzania 347 68
DRC 270 53
Uganda 742 99
Zambia 301 63
Zimbabwe 250 35
Country Average
NER
(US$/ha)
Pixels with
positive
NERs (%)
Angola 250 28
Burundi 1010 100
Ethiopia 670 88
Kenya 885 92
Madagascar 651 76
Mozambique 128 19
Rwanda 1416 96
Tanzania 371 70
DRC 275 71
Uganda 898 100
Zambia 385 80
Zimbabwe 271 58
NER under Medium intensification (for pixels
NER>0)
Country Average
NER
(US$/ha)
Pixels with
positive
NERs (%)
Angola 275 32
Burundi 1061 100
Ethiopia 771 90
Kenya 931 92
Madagascar 731 76
Mozambique 145 21
Rwanda 1461 96
Tanzania 384 71
DRC 302 76
Uganda 994 100
Zambia 444 86
Zimbabwe 309 76
NER under High intensification (for pixels
NER>0)
Potential area (>$200/ha) and production
(medium level of intensification)
Area (million ha) Production (million tons)
10% 25% 10% 25%
Mozambique 0.1 0.26 0.27 0.67
Burundi 0.14 0.34 0.45 1.11 Rwanda 0.14 0.36 0.61 1.51
Uganda 0.2 0.51 0.69 1.72
DRC 0.25 0.62 0.76 1.89
Kenya 0.67 1.67 2.65 6.63
Zimbabwe 0.81 2.03 1.72 4.3
Angola 0.92 2.31 2.67 6.67
Tanzania 1.21 3.02 3.62 9.05
Madagascar 1.27 3.17 4.74 11.85
Zambia 1.73 4.32 4.26 10.64
Ethiopia 2.6 6.5 9.42 23.55
All 10.04 25.11 31.86 79.59
Sensitivity analysis: 25% wheat price
decrease
-1
-1
-3
-8
-13
-13
-15
-21
-23
-23
-29
-44
-40 -30 -20 -10 0Change
Uganda
Rwanda
Burundi
Kenya
Ethiopia
Angola
Mozambique
Madagascar
Zimbabwe
Tanzania
Zambia
DRC
from baseline
Change in percentage of pixels with positive net economic returns
Sensitivity analysis: 25% wheat yield
decrease
-1
-1
-3
-7
-8
-8
-14
-14
-15
-21
-23
-28
-30 -20 -10 0Change
Uganda
Rwanda
Burundi
Kenya
Ethiopia
Angola
Tanzania
Mozambique
Madagascar
Zimbabwe
Zambia
DRC
from baseline
Change in percentage of pixels with positive net economic returns
Conclusions
• Strong evidence that there is large potential for economically profitable wheat production in SSA to meet the growing consumption demand
• Results are generally robust to plausible shocks.
– Low world prices of wheat and high fertilizer costs will reduce the relative competitiveness of domestic production
– Fall in domestic yield will reduce competitiveness
– investment in R&D to increase yields and to reduce production and marketing costs will increase it
• The limiting factors are not agro-ecological, they are rather socio-cultural, institutional and policy impediments.
Policy implications
• How can Africa exploit this potential?
– Paradigm shift – policy dialogue with an open mind to explore opportunities
– Action plan will vary by country/region and need to analyze farming system constraints and other crops
– Adaptive research and extension to enhance farmer awareness, access to seeds, inputs and knowledge of improved practices
– Development of value chain opportunities
– Better food aid and import policies to reduce negative effects on domestic producers
Bekele Shiferaw: [email protected]
• Thank you!
• Asante sana!
• Merci
beaucoup!
• Shukran!
• Ameseginalehu!
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
Maize Wheat Rice
Per capita consumption of main cereals in Africa (kg/year)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.01
96
1
19
62
19
63
19
64
19
65
19
66
19
67
19
68
19
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19
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19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
Maize Wheat Rice
Trends in annual per capita consumption of main cereals in Sub Saharan Africa (kg/capita/year), 1961 - 2010
Import of main cereals into Africa (million tons)
Trends in Sub Saharan Africa's net export of main cereals (million tons), 1961 - 2010
Sensitivity analysis: 25% fertilizer cost
increase
0
0
0
0
0
-1
-1
-1
-1
-1
-2
-2
-2 -1.5 -1 -.5 0Change
Uganda
Rwanda
Kenya
Burundi
Angola
Zimbabwe
Tanzania
Mozambique
Madagascar
Ethiopia
Zambia
DRC
from baseline
Change in percentage of pixels with positive net economic returns
Sensitivity analysis: 25% marketing cost
increase
0
0
0
0
-1
-2
-7
-8
-9
-11
-14
-21
-20 -15 -10 -5 0Change
Uganda
Tanzania
Rwanda
Kenya
Burundi
Ethiopia
Zimbabwe
Angola
Mozambique
Madagascar
Zambia
DRC
from baseline
Change in percentage of pixels with positive net economic returns
