MSU LIBRARIES RETURNING MATERIALS: P1ace in book drop to remove this checkout from your record. FINES wilI be charged if book is returned after the date stamped be‘ow. / ‘//—- J3 é/Fy FARM LEVEL ANALYSIS OF RICE PRODUCTION SYSTEMS IN NORTHWESTERN IVORY COAST By Thomas Eponou A DISSERTATION Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Agricultural Economics 1983 ABSTRACT FARM LEVEL ANALYSIS OF RICE PRODUCTION SYSTEMS IN NORTHWESTERN IVORY COAST By Thomas Eponou The study was designed to help fill the gaps in the present know- ledge base about rice production in Northwestern Ivory Coast. The spe- cific objectives were: to provide technical coefficients on rice pro- duction, to compute the returns to land and labor, to compare these re- turns to those of other crops in the farming systems. to analyze how rice fits into the farming systems, and to see how both rice production and farm income can be increased by removing some of the production constraints. The necessary data were collected using the cost route method and analyzed with the FAO's FMDCAS computer package. The major analytical methods were farm budgets, enterprise budgets, capital bud- geting and linear programming. A survey of 90 farmers revealed that rice was financially the most profitable crop in Northwestern Ivory Coast. Swamp rice was more profit- able than upland rice for all the techniques of production. Economically all the techniques of production except tractor/upland/unimproved rice had a net margin higher than the average wage rate. Cotton was the best alternative crop to rice in terms of both gross and net margins/man-day. However, in terms of returns/hectare, yam was the most profitable crop in the farming system. The analyses were done using enterprise budgets. Thomas Eponou It was also shown, using capital budgeting, that animal traction was not profitable since it does not increase hectarage sufficiently to compensate for its negative yield effect. However, investment in the small tractor of the "motorization intermediare" program was highly pro- fitable, with an internal rate of return above 100 percent. The results of the linear programming models revealed that rice was an important crop in terms of farm income. Capital, however, was a constraint to increasing production particularly in the case of tractor cultivation. The impacts of increasing the price of rice,subsidizing rice in- puts and providing credit to rice producers on rice production were tested using linear programming models. Given current conditions, pro- viding credit to rice producers was determined to be the best strategy to increase production and to improve overall farm income. The effective- ness of a credit program would depend on improving yields of rice. The policy implications of the study stress the need: (1) to im- prove the agricultural credit system and the extension services to rice producers; (2) to do more research in order to improve rice yields and agricultural mechanization; and (3) to undertake a study of the market- ing system of the rice subsector in order to achieve well-defined, coor- dinated objectives and policies. To my Late Father Koffi Benoit For whom I could not fulfill my traditional obligations because of my graduate studies. ii ACKNOWLEDGMENTS I am indebted to many individuals and institutions and I wish to take this opportunity to extend my sincere appreciation for the assis- tance and cooperation I received throughout my graduate program. During my stay at MSU Professor Carl Eicher provided advice in quantity and quality beyond measure. For some time he also served as my major professor. Professor Eicher deserves my profound gratitude. I am very grateful to Dr. Eric Crawford, my Thesis Director,for his in- tellectual stimulation and invaluable help. I especially wish to express my deepest appreciation to Professor Harold Riley, my major professor and chairman of my guidance committee during the later phases of my pro- gram for his inspiration and guidance. I also want to thank the other members of my guidance and thesis committees, professors Carl Liedholm and Gerald Schwab. Financial support for my graduate studies and this research project came from various sources: The African American Institute, the Ivorian government, CIRES and WARDA. I am grateful to the African American Institute, to Drs. Hiey Pegatiana and Achi Atsain of CIRES and to Dr. Dunstan Spencer of WARDA. Dr. Spencer willingly sacrificed his time to provide invaluable supervision for the field data collection. Drs. Pegatiana, Atsain and Spencer will always be remembered for their en- couragement and support during the whole research project. iii At CIRES J. Foucher helped with the first computer programs for data setting and cleaning. Paul Winder provided assistance for the . computer work at MSU. Debbie Greer typed part of the first draft and the final draft of the manuscript and graciously volunteered to edit part of the paper. Cindy Spiegel typed most of the first draft. I am deeply grateful to both of them. During the survey and the analysis stages, colleagues at CIRES and MSU provided assistance. I particularly benefited from Samba N'Daw's experience in field measurement. Mike Morris provided support by help- ing me with my English. Finally loving thanks to my cousin Kro Kouassi, to my uncle Moise Tano Yao and to my friend T. Adjua Diby for the many ways in which they made things easier for me to complete my graduate program. iv TABLE OF CONTENTS Page ACKNOWLEDGMENTS .......................... iii LIST OF TABLES ................ . ......... x LIST OF FIGURES ......................... xvi LIST OF MAPS ..................... . ..... xvii CHAPTER 1. INTRODUCTION .......... . .............. l l.l Background. . . . . . . . . . ..... . . . . . . . . . 1 1.2 Economic Situation ....... . . . .......... 2 1.3 The Agricultural Sector . . . . . ........... 4 1.4 Food Situation in the Ivory Coast ............ 7 1.5 The Rice Issue in the Ivory Coast. . .......... 9 1.5.1 Consumption. . . . ................ 9 - 1.5. 2 Production . ..... . ...... v ....... 13 1.5. 3 Imports. . . . ..... . . . . 14 l. 5.4 Public Interventions and Policies. .' ....... 15 1.5.5 Economics of Rice. ............... 16 1.6 Problem Statement and Objectives of the Study ...... 18 1.6.1 Problem Statement. ..... . .......... 18 1.6.2 Objectives of the Study. . . . . ......... 20 1.7 Organization of the Study . . .............. 20 2. RESEARCH METHODOLOGY. . . . . . . . . . . . . . . ... . . . . 22 2.1 Sampling Procedure. . . . ............ 22 2.2 Selection and Training of Enumerators . . ........ 25 2. 3 The Survey. . . . . . . . . . . . ...... 25 2. 4 Data Preparation and Analysis . . . ....... . . . . 27 3. AN OVERVIEW OF THE RICE SUBSECTOR IN THE IVORY COAST ..................... . . . . . 29 3. l Physical and Socioeconomic Conditions of Northwestern Ivory Coast. . . . . . . . . . . . . . . . . 29 3.1.1 _Physical Conditions. . . . . ..... . ..... 29 3.1.2 Socioeconomic Conditions . . . . . . . ...... 30 3.1.2.1 Labor . . . . . . . . . . . . . . . . . . 33 3.1.2.2 Land. . . . . . . . . . . . . . . 35 3.1.2.3 Production Systems. . .......... 37 3.1.2 4 Other Activities. . . . . . . ...... 39 CHAPTER 3.2 Institutional Organization of the Rice Subsector and Importance of Rice in the Farming Sector ....... 3.2.1 Institutional Organization of the Rice Subsector . ......... . . . . . . . . . . . 3.2.1.1 Marketing. . . ..... 3. 2. 2 The Importance of Rice in the Farming System. 3. 2. 3 Rice Marketing ................... 3.3 Coons straints to Rice Production .............. 3. 3.1 Labor ....................... 3. 3. 2 Capital . . . . ................. 3. 3. 3 Institutional Constraints ............. 4. RESOURCE USE, RETURNS TO LAND AND LABOR AND ECONOMIC ANALYSIS OF RICE PRODUCTION . . . . . ............. 4.1 Upland Rice. . . . .................. 4.1.1 Manual Cultivation ................. ' 4.1.1.1 Resource Use ............... 4.1.1.2 Yields . . . . . ..... . . . ..... 4.1.1. 3 Financial Return .......... . . . 4.1.2 Animal Traction . . . . . ..... . . . ..... 4.1.2.1 Resource Use ............... 4.1.2.2 Yields . . . ......... . ..... 4.1.2.3 Financial Returns. . ........... 4.1.3 Tr ac tor Use . . . . . . . . ............. 4.1.3.1 Yield. . ............. . . . . 4.1.3.2 Returns to Land and Labor. . . ...... 4.1.3.3 Summary. . . . . . ............ 4.2 Swamp Rice. . . ..... . . . . . ...... 4.2.1 Manual Cultivation. . . . ............. 4. 2.1.1 Yield. . . . . ......... . . . . . 4.2.1.2 Financial Returns. . . . . . . ...... 4.2.2 Animal Traction .......... . ....... S 2.2.1 Yields . . . ............... 4. 2. 2. 2 Financial Returns ............. 4.2.3 Trac to or Use . . . . . . . . . . . . . . ...... 4.2.3.1 Yields . . . . . . . . . . . . . ..... 4.2.3.2 Returns. . . . ....... 4. 3 Comparative Analysis of Techniques of Production ..... 4. 4 Social Probability of Rice Production. . ......... 4.5 Summary. . . . . . . . . . . . . . . . . . . ....... 5. RESOURCE USE. RETURNS TO LAND AND LABOR AND PROFITABILITY OF OTHER CROPS OF THE FARMING SYSTEM. . . . . . ........ 5.1 Grain Production . . . . . . . . ............. 5.1.1 Corn. ...... . . . ............ 5.1.1.1 Resource Use ............... 5.1.1.2 Yields . . ....... . ........ 5.1.1.3 Returns. . . . . . . . ..... . . . . . vi Page CHAPTER Page 5.1.2 Sorghum . . .................. 128 5.1.2.1 Resource Use ............... 132 5.1.2.2 Yield ................... 134 5.1 2.3 Returns. . . ............... 134 5.1.3 Millet and Fonio. . ................ 134 5.2 Tu be r Crops. . . . . . . . . . . ............. 136 5.2.1 Resource Use. . . . . . . . . ..... . . . . . . 137 5. 2.2 Yield. . . . . . . . . . . . . . . . . ...... 139 5.2.3 Returns ..................... 139 5.3 Cotton Production (Textile Crop) ............. 141 5.3.1 Resource Use. . . . . . . . . . . . . . . ..... 141 5.3.2 Yield . . . . . . . . . . . . . . . . . . . . . . . 146 5.3.3 Returns . . . . ..... . ............ 147 5.4 Oils see eds Production. . . . . . . ..... . ....... 147 5.4.1 Resource Use. . . . . . . . . . . . . . . . . . . . 152 5. 4. 2 Returns . ............ 154 5.5 Opportunity Costs of Land and Labor for Rice Production . . . . . . . . . . . . . . . . . . . . . . . . 154 6. ANALYSIS OF INVESTMENTS IN IMPROVED TECHNIQUES FOR RICE PRODUCTION. . . . . . . . . 159 6.1 Methodology and Selection of the Coefficients ....... 159 6. 2 Results of the Basic Model . . . . . . . . . . ...... I70 6. 3 Increase in the Price of Rice. ......... . . . . . I72 6. 4 Subsidizing Rice Production. . . . . . . . . . . . . . . . 173 6.5 Summary ..... . . . . . . . . . ....... . . . . . I75 7. A LINEAR PROGRAMMING ANALYSIS OF RICE PRODUCTION UNDER THE CURRENT CONDITIONS. . . . . . . . . . . ..... . . . . . 180 7.1 Methodology ..... . . . . . . . . . . . . . 180 7.1.1 Choice of Analytical .Tool . . . . . . . . . . . 180 7.1.2 The Use of Linear Programming in Africa . . . . . . 181 7.2 The Model. . . . u . . . . . . . . . ..... 133 7.2.1 Algebraic Formulation . . . . . . . . . . . . . . . 183 7. 2. 2 Constraints . . .............. I83 7. S 3 Formulation of the Activity Set. . . . . ..... 184 7. 2.4 Estimation of the Coefficients. . . . ...... 135 7.2.5 Estimation of the Right Hand Side Values. . . . . . 135 7.3 Model Results--Manua1 Cultivation. . . . . . . . ‘ ..... 191 7.3.1 Enterprise Combination. . . . . . . . . . ..... I91 7. 3. 2 Hectarage of Rice . . . . ..... - . . I91 7. 3. 3 Marginal Value Product of Resources (MVP) . . . . . I91 7. 3. 4 Farm Income . . . . . . . . . . . . . . . . . . . . 194 7.4 Model Results--Tractor Use . . .............. 194 7.4.1 Enterprise Combination. . . . . . . . ....... ‘94 7. 4. 2 Hectarage of Rice . . . . . . ...... I95 7. 4. 3 Marginal Value Product of Resources . . . . . . . . 195 . 7. 4. 4 Farm Income . . . . . . . . . . . . . . . ..... 195 7.5 Summary . . . . . . . . . . . . . . . . ....... ‘93 vii CHAPTER 8. A LINEAR PROGRAMMING ANALYSIS OF RICE PRODUCTION UNDER ALTERNATIVE POLICIES ................... Increasing the Price of Rice ............... 8.1 8.2 8.3 8.4 Compari 0 8.1.1 8.1.2 8.1.3 mmH o o 3 MN? N—‘o 8.2.3 Subsidizi 8.3.1 8.3.2 8.3.3 < .1. 330000 000000 0 The Price Levels ............. Empirical Results--Manua1 Cultivation ....... 8.1.2.1 Enterprise Combination . . ........ 8.1.2.2 Hectarage of Rice ............. .1. 2. 3 Marginal Value Product of Resources (MVP). ..... . ........... .4 Farm Income. . ....... . ...... ical Results: Tractor Use .......... .1 Enterprise Combination .......... 2 Hectarage of Rice ............. .3 Cost of Forcing in Nonoptimal 4 .5 ranoo m L‘s—agar) _a 1 Activities . . . ....... Marginal Value Product of Resources. . . Farm Income. . . . ........... e Extension Service and Credit System ..... ptions and Expected Impacts of the Policy. . . 'ical Results--Manua1 Cultivation . . . . . . . .1 Enterprise Combination . . . . ...... .2 Hectarage of Rice. . . . ....... .3 Marginal Value Product of Resources. . . .4 Farm Income ................ or Cultivation . . . . . ......... .1 Enterprise Combination . ......... .2 Hectarage of Rice. . . ...... .3 Marginal Value Product of Resources. . . .4 Farm Income. . . ............. 9 Rice Production. . . ............. Assumptions and Expected Impacts of the Policy. Manual Cultivation ............ . . . . . 8.3.S 1 Enterprise Combination . . . . ...... 2 Hectarage of Rice. . . . ....... 3 Marginal Value Product of Resources (MVP). . . ...... 4 Cost of Forcing in Nonoptimal Activities . . . . . . . . . . ...... 5 Farm Income. . . ............. r Use . . . . . . ..... . ..... 1 Enterprise Combination . ......... 2 3 4 d dd Sm - -'-°C¢+ wwwwd-NNNN-x a Scam 0.160001 N C :oooooooo:oooooooorn 3 NNNND’ NNNN Hectarage of Rice . . . . . . . . . . . . Marginal Value Product ..... . . . . . Farm Income. . . ........... 2. 2. 2. S cto 3. 3. 3. 3. an Evaluation of the Policies ......... 8. 3. 8. 3. 8. 3. 8. 3. Tr rac 8. 3. 8. 3. 8. 3. 8. 3. s n viii Page 199 199 199 202 202 203 CHAPTER Page 9. SUMMARY, CONCLUSIONS, AND POLICY IMPLICATIONS ......... 229 9.1 Summary. ............. . ........... 229 9.2 Policy Implications .................... 238 9.2.1 Agricultural Credit . ............... 238 9.2.2 Agricultural Research ............... 240 9.2.3 Extension Service . . . . ............. 241 9.2.4 Agricultural Mechanization ............. 241 9.3 Areas of Further ResearCh. . . . . . . . . ........ 242 APPENDIX A Profitability of the Improved Package (Partial Budgeting) . . . . 245 APPENDIX B The Basic Matrices for the LP Model ............... 246 REFERENCES ............................. 256 ix Tables 1-1 1-2 2-1 3-1 3-2 LIST OF TABLES Production of Main Crops Over the Period 1960-1980 ..... Prices of Major Staple Food Commodities per Thousand Calories (FCFA)a ................. Rice Production, Import and Consumption (Metric Tons) ....................... Distribution of Selected Farm Households by Type of Rice and Cultivation Technique ...... . . ...... Farm Size, and Resource Use by Farm Size in the Study Area . Cultivated Areas of Main Crops for the Period 1975- 1980 in the Region of Odienne (ha)a .......... Fertilizer, Herbicides and Improved Seed Used per Crop in the Region of Odienne in 1980-81 (ha) . ...... Percentage of Compounds Producing Rice According to the Techniques of Production. . . . . . . . ..... . . Shares of the Different Crops in Total Compound Cultivated Area According to Farm Size ..... . ..... Distribution of Labor Input Used in Rice Production by Period According to the Techniques of Production . . Farm Size, Household Size and Net Farm Income by Technique of Production . . . . . . . . . . . ....... Resource Use, Output, Capital-Labor Ratio and Cost of Production of the Different Crops ......... Distribution of Labor Input by Month and b Activity for Upland Rice Manual Cultivation (per ha) Variation of Yield According to the Varieties (kg/ha) . . . Yield Variation According to the Planting Date (kg/ha). Enterprise Budget Per Ha - Upland Rice - Manual Cultivation — Improved Package. . . . . . . . . . . . . . X (Man-day) . . . Page 6 12 15 25 35 38 43 52 53 40 62 65 72 75 75 77 4-5 4-6 4-7 4-8 4-9 4-10 4-l6a 4-16b Page Enterprise Budget Per Ha - Upland Rice — Manual Cultivation - Unimproved Package .............. 78 Gross Margin/Man-Day According to the Type of Mixture: Upland Rice - Manual Cultivation ......... 79 Upland Rice - Distribution of Labor Input by Month and by Activity - Animal Traction (Per Ha) (Man-Day) .......... . ....... . ...... 82 Seed Rate per Hectare, by Variety (kg/ha) Upland Rice - Animal Traction. ....... . .......... 83 Yield Variation According to the Variety (kg/ha) ...... 85 Enterprise Budget Per Ha - Upland Rice - Animal Traction - Improved Package . . . . . . .......... 87 Enterprise Budget Per Ha - Upland Rice - Animal Traction - Unimproved Package . . . . . . . ........ 87 Distribution of Labor Input by Month and by Activity: Upland Rice Tractor Use (Man-day) ........ 90 Yield of Rice According to the Technique of Production (Per Ha) (kg). ................. .92 Enterprise Budget Per Ha - Upland Rice - Tractor - Unimproved Package. . . . . . ..... . . . . . 94 Enterprise Budget Per Ha - Upland Rice - Tractor - Improved Package ......... . ....... 95 Variation of Gross Margin Per Man-Day According to the Package Used - Upland Rice/Tractor . . ....... 96 Gross Margin Per Man- -Day by Technique of Production (FCFA) ....... . . ......... 97 Distribution of Labor Input by Month and by Activity for Swamp Rice: Manual Cultivation (Per Ha)(Man-Day) . . . , 100 Enterprise Budget Per Ha - Swamp Rice - Manual Cultivation - Unimproved. . . . . . . . . . . . ...... 102 Distribution of Labor Input by Month and by Activity: Swamp Rice Animal Traction (Per Ha)(Man-Day). . . . . . . . ‘04 xi 4-20 Enterprise Budget Per Ha - Swamp Rice - Animal Traction - Unimproved Package. . . . ............ 107 4-21 Enterprise Budget Per Ha - Swamp Rice - Animal Traction - Improved Package ..... . ........... 108 4-22 Distribution of Labor Input by Activity and by Month: Tractor Use (Per Ha) (Man-Day)° ......... . . 110 4-23 Enterprise Budget Per Ha - Swamp Rice - Tractor - Unimproved Package . . . . . . . . . . . .......... 112 4-24 Enterprise Budget Per Ha - Swamp Rice - Tractor - Improved Package . . . . . . . . . . . . . . ..... . . . 113 4-25 Gross Margin Per Man- -Day Tractor Use (FCFA) - Swamp Rice ...... . . . . . . . . . ........ 114 4-26 Gross Margin/Man-Day by Technique of Production (FCFA) - Swamp Rice. . . . . . . . . . . . . . ....... 115 4-27 Ranking of the Techniques of Production According to Gross Margin/ha, Gross Margin/Man- Day, and Gross Margin/Operating Cost. . . . . . . . . . , ...... 117 4-28 Import Parity Price of a Ton of Paddy Produced in Northwestern Ivory Coast in 1981 ..... . ....... 120 4-29 A Comparative Economic Analysis of the Major Production Techniques of Rice (FCFA) . . . ......... 121 5-1 Resource Use in Other Grains in Northwestern Ivory Coast. . . . . . . . . . . . . ...... . ..... 125 5-2 Corn-Manual CultivationzDistribution of Labor per Month and per Activity (Man-day) .............. 127 5-3 Enterprise Budget: Corn,Manual Cultivation. . . ...... 129 5-4 Enterprise Budget: Corn,Animal Traction . . ........ 130 5-5 Enterprise Budget: Corn.Tractor Use . . . . . . ...... 131 5-6 Sorghum: Distribution Labor Input per Month and per Activity (Man-Days). . . . . . . . . . . . . . . . . . 133 5-7 Enterprise Budgets for Millet, Fonio, and Sorghum (Per Ha) . . . . . 135 5-8 5-10 5-11 5-14 5-15 5-16 5-17 5-18 5-19 5-20 6-1 6-3 6-4 6-5 6-6 Distribution of Labor per Activity and per Month (Man-days) for Yam. ...... . ... . . . . Enterprise Budget: Yam (Per Ha) .............. Hectarage of Cotton According to Technique of Production . . Distribution of Labor by Month and by Activity (Man-days) for Cotton: Manual Cultivation ......... Distribution of Labor by Month and by Activity (Man-days) for Cotton: Animal Traction ........... Distribution of Labor Inputs by Month and by Activity (Man-days) for Cotton: Tractor Use ........ Enterprise Budget - Cotton - Manual Cultivation (Per Ha) Enterprise Budget - Cotton - Animal Traction (Per Ha) Enterprise Budget - Cotton - Tractor (Per Ha) ........ Cotton Return Per Man-Day According to Technique of Production ....... . . . . . Distribution of Labor Input by Month and by Activity (Man-days) for Groundnut. . . . . . Enterprise Budget - Groundnut (Per Ha) . . . Ranking of the Gross Margins of the Different Crops. . . . . Average Hectarages of the Different Crops by Technique of Production (ha) . . . . . . Adjustment Curve of Cultivated Area for Animal Traction Used in the Model (ha). . . . . . . . . Adjustment Curve of Hectarages Used in the Model for Tractor (ha) . . . . . . . Adjustment Curve of Yield Used in the Model for Animal Traction (kg/ha). . . . . . . . . . . Adjustment Curve of Yields Used in the Model for Tractor (ha) . . . . . Basic Model - Animal Traction. . Basic Model - Tractor. . . . . . . xiii 138 140 142 143 144 145 148 149 150 151 ~ 153 155 157 161 163 164 165 166 167 171 6-8 6-9 6-10 6-11 7-1 7-2 7-4 7-5 7-7 7-8 7-9 7-10 8-1 8-3 8-4 8-5 Increase in the Price - Animal Traction ........... Increase in the Price of Rice - Tractor (FCFA) ....... Input Subsidy on Rice — Animal Traction (FCFA) ....... Input Subsidy on Rice - Tractor Subsidy (FCFA) ....... Standard FAO Table to Compute Consumer Equivalence ..... Structure of the Selected Compound for Manual Cultivation. . . .5. . . ... . ............... Structure of the Selected Compound for Tractor ....... Estimated Per Capita Consumption (kg). ..... . ..... Estimated Production Constraints for Manual Cultivation and Tractor Use (kg) . . . . . ......... Right Hand Side Values Used in the Models. . . . . . . . . Optimum Enterprise Combination: Basic Model, Manual Cultivation (ha) . . . . . . . ........ Marginal Value Product of Resources: Manual Cultivation (FCFA) . . . . . . . . ....... . ..... Optimum Enterprise Combination Basic Model: Tractor Use (ha) . ..... . ............... Marginal Value Product of Resources: Tractor. . ...... Impact of Alternative Pricing on Rice Production and Farm IncomezManual Cultivation . . . . . . . ...... Impacts of Alternative Pricing on Rice and Production and Farm Income: Tractor Cultivation. . . . . ....... Impact of Improving the Credit System on Rice Production on Rice and Farm Income: Manual Cultivation. . . Impact of Improving the Credit on Rice Production and Farm Income: Tractor. . . . . . . . . . . . . . . . . . . . Impact of Subsidizing Rice Inputs on Rice Production and Farm Income: Manual Cultivation . . . . . ..... . . xiv Page 174 177 178 186 187 188 189 190 190 193 195 197 204 204 210 214 219 Impact of Subsidizing Rice Inputs on Rice Production and Farm Income: Tractor Use . ..... . . . . 221 Summary of Impacts of the Different Policies on Area of Rice and Farm Income ............... 226 Impact of Yield Increase on Rice Hectarage and Farm Income. . . . . . . . . . . . . . . . . ........ 227 XV LIST OF FIGURES Figures fgggg 3-1 Rice Marketing Channels in the Ivory Coast ......... 56 8-1 Increasing Producer's Price of Rice ............ 201 8-2 Subsidizing Rice Inputs ..... . . . . . ........ 216 xvi LIST OF MAPS Page Location of the Study Area and CIDT's Extension Service Area ........................ 23 Average Annual Rainfall in the Ivory Coast (1961-1970)(mm) ......... . . . . . . . ...... 31 xvii CHAPTER 1 INTRODUCTION 1.1 Background Over the last two decades, the Ivory Coast has experienced one of the highest and most sustained rates of growth in agricultural output within Africa. Total agricultural output grew at an annual rate of 5 percent, between 1965 and 1980. Industrial crops such as coffee, cocoa, palm oil, cotton and pineapple grew at 6-7 percent per year. Food crop output increased by 3-4 percent annually during the same period. This increase in total food supply has brought about a decrease in the share of food imports in total imports in spite of an increase in personal in- come and a high urbanization rate. The rice subsector, however, has been an exception to this success although its rate of increase in production was higher than for other food crops. Between 1965 and 1980, rice production increased by about 5 percent annually. But except for the cropping season 1975-1976, pro- duction has always lagged behind consumption, which has been increasing by about 8 percent annually (Posner, 1978). Paradoxically, rice has re- ceived more attention in terms of policy, research and public investment than any other food crop over the last decade. _ The gap between total demand and local supply has been bridged through imports. In 1980, 243,441 MT or the equivalent of 49 percent of total consumption had to be imported. That was 58.2 percent of total food imports in value. . The importance of this study is reflected by the expressed objec- tive of the Ivorian government to achieve self-sufficiency in rice pro- duction at a time of economic hardship in terms of generating foreign exchange earnings, and of the deterioration of the food situation of subsahara Africa (USDA, 1981; Eicher, 1982). Self-sufficiency in rice production and priority to the food subsector are political choices which should be achieved through improved production systems and agricul- tural policy adjustments. The study looks at the agricultural production systems of north- western Ivory Coast where rice is a major crop in terms of food consump- tion and rural income. The study is conducted from a farm level per- spective. In a broader view its objective is to help fill the gaps in the present knowledge base of rice production in Northwestern Ivory Coast. 1.2 Economic Situation The Ivory Coast is a relatively small country of 124,503 sq. miles with a population estimated at about 8 million in 1980. With no impor- tant mineral resources until the discovery of oil in 1977, the Ivory Coast had no choice but to emphasize the agricultural sector for its development. The birth and development of her industrial sector, pri- marily import-substitution and (later) export-oriented industries were initiated through a flexible and attractive investment code in order to gather the lacking capital and human resources. . _V. With an annual growth rate of 7 percent of real terms until re- cently, the Ivorian economy was an exception in Nest Africa. This im- pressive economic performance could be traced to political stability, an attractive atmosphere for investment and heavy emphasis on the export- oriented agricultural sector. Owing to domestic saving of about 22 per- cent of the gross domestic product and an outstanding performance in the export sector, foreign debt service was kept within manageable limits. There were no serious trade balance or balance of payments problems. With a per capita income of $1,150 in 1980, the Ivory Coast is ranked among the middle income countries (World Bank, 1982). The major problems or shortcomings of the economy were: (1) the heavy dependency on foreign markets (importance of the export oriented agricultural sector); (2) worsening of income distribution as the growth oriented policy was not followed by a trickle down effect as expected; and (3) the growing pro— portion of foreign factors in production.1 But in the recent years, due to the sluggish economic conditions in the industrialized countries, the Ivory Coast is facing the most serious economic crisis since she gained independence from France in 1960. The economic problems of the industrialized countries have transposed them- selves upon the Ivory Coast. Through depressed demand and a subsequent fall in price of expOrt commodities (cocoa, coffee, cotton, pineapple), government revenues have dwindled because of decreases in export and 1Because of these problems some authors, e.g., Samir Amin, have con- demned the Ivorian development model as they think that it leads to the development of underdevelopment. See Sami r Amin. Le Developpment de Capitalisme en Cote d'Ivoire, (1967), L'Afrique de L'Ouest Bloguee, (1970). import duties. Furthermore, the marketing board can no longer make profits which could strengthen public revenue. The marketing margin of cocoa and coffee, the main source of that profit (90 percent) barely covers marketing costs. As an example, there was a shortfall of about FCFA 1,000 billion ($2.86 billion) in government revenue from the export market in 1980-81. The Ivory Coast is now under a World Bank program of stringent budgetary management and investment control. The recently found oil may ease the situation by eliminating foreign exchange needs for oil imports and may bring additional earnings to the government. The other solution to the Ivorian crisis lies with economic recovery in the western countries which will stimulate the demand for export commodities from the Ivory Coast. However, before the crisis the public sector had intervened in some important sectors such as infrastructure, housing, transportation and public utilities. In some cases it has intervened in directly productive activities, such as palm oil, mining, and the textile industry, through joint ventures with the private sector. The Ivorian economy, however, is still agriculturally based and its success is tied directly to the agricultural sector. 1.3 The Agricultural Sector Although the share of the agricultural sector in GDP has declined OVer the years (34 percent in 1980 versus 43 percent in 1960), that sec- tor- has grown at an annual rate of 5 percent. This performance has been macje possible by institutional changes, agricultural incentives, public investments, and a set of relatively sound decisions in terms of agricul- tural diversification. In 1966, a set of priorities were defined in the agricultural sec- tor. Parastatals were created to manage these priorities. There were nine in charge of either promoting a specific crop or providing specific services such as agricultural credit, land clearing, or cooperative organ- ization. All these parastatals went through an intensive agricultural extension delivery program. The creation and organization of these parastatals made possible a diversification program. Secondary crops such as palm oil, coconut, cotton, pineapple, rubber, banana and later sugar cane, came to supple- ment the traditional export crops, coffee and cocoa, introduced during colonial era. The implementation of these programs was also possible because of the heavy investments in research institutes, created during the colonial era as well as after independence. For some crops, such as palm oil, the government took the lead and directly intervened as a producer. Through a set of prices, credit, and land development incentives, most of the new crops became as attractive as coffee and cocoa. More importantly, most of these programs were financed by savings generated in theagricultural sector by the marketing board. In spite of the Crisis,Ivorian agriculture is second to none in West Africa, in terms Of’ growth and diversification. Table 1-1 gives the level of production for~ the main crops over the period 1960-1980. The Ivory Coast ranks fir~st for cocoa, third for coffee and palm oil and tenth in banana and pineapple exports at the world level. TABLE 1-1. Production of Main Crops Over the Period 1960-1980 ’(Thousand of MT) Crop 1960 1965 1970 1975 1980 Coffee 136 ‘ 213 240 268 249 Cocoa 85 134 182 239 401 Oil palm - 329 480 966 1079 Rubber - 12 11 15 19 Banana (export) — 107 134 135 115 Pineapple 20 114 110 229 296 Cotton 5 10.4 33 65 143 Sugar - - - 5 137 Paddy 160 250 316 460 511 Maize 147 200 . 231 327 280 Sorghum-Millet. 52 45 143 '81 80 Yam 1150 ' 1300 1551 2206 2128 Cassava 450 500 1540 1146 1153 Plantain 490 600 650 1151 1223 Taro 135 160 g 183 247 297‘ Sources: Ministry of Agriculture: Statistiques agricoles - 1980. Ministry of Finance: La Cote d'Ivoire en chiffres - 1975. It is also important to note that agricultural performance would not have been possible if the needed resources were not available. Neither labor nor land was a constraint. Migration of labor from neigh- boring countries provided relatively cheap 1abor. Human capital was also available in the research institutes. Financial capital also was not a serious constraint as the Ivory Coast could borrow easily on the world market. However, some problems have arisen in some of the programs because of the structural changes which have occurred in recent years. The most important ones are labor constraints due to the rural—urban migra- tion, the shrinking of the rain forest, the deterioration of commodity prices and its impact on farm income, the heavy public involvement and more importantly the food issue which was not seriously addressed in past policies. The socioeconomic plan covering the period 1981-1985 recommends a progressive phasing out of direct public intervention in agricultural production. It calls for shifting to a more intensive agriculture, pro- gressive intensification of agricultural mechanization, creation of new rural entrepreneurs with a more independent mentality. Finally it gives priority to the food sector, not only to avoid food shortages in the future but also to make farm income less dependent on export markets. Among the problems faced by Ivorian agriculture the food issue is the most important. 1.~4 Food Situation in the Ivory Coast In spite of the relative neglect of the food subsector, food pro- du<:tion has kept pace with the growing demand induced by an increase in personal income, population growth and a high rate of urbanization. The World Bank Report for 1982 singles out the Ivory Coast as one of the few countries in Africa, south of the Sahara, which has experienced an increase in per capita food production and which is able to meet their daily calorie requirements through domestic production. The index of per capita food production for the period 1978-80 was 107,1 and daily calorie requirements were covered at 107 percent (World Bank, 1982). The increase in food production stems from the availability of re- sources. Furthermore, in most cases there is complementarity rather than conflict between export crops and food crops. The incentives for export crops have a positive impact on food crops. The expansion of coffee and cocoa production, for example, induces an increase in plantain production as it is used as a source of shade for the young plants. The free market prevailing in the food sector has been another fac- tor in increasing food production. The government has made no concerted attempt to influence agricultural commodity prices in favor of the urban workers. Only rice has had official prices at both the farm and consumer levels. Actually these prices of rice were enacted to provide incentives to the producers. In recent years, however, the food sector seems to have experienced some problems and the level of self-sufficiency is deteriorating. Never- theless the share of the value of food imports in total import is de- clining; from 20 percent in 1960 this share was only 12.7 percent in 1979 (Atsain, 1982). 1The base year for the index is the period 1969-71. Resource constraints and changes in taste induced by the socioecono- mic structural transformation are some of the main reasons why consumers are demanding cereals, vegetables, meat and poultry as substitutes for the bulky and starchy tubers and roots. Between 1970 and 1980 the per capita import of wheat and vegetables increased respectively from 11.6 kg to 22.1 and 3.8 kg to 7.3. From 14 percent in the early 50's, the share of rice and wheat in consumption rose to 28 percent in the mid 1970's (Tano, 1982). For historical, economic and political reasons, rice represents a special case. To meet local demand, more and more has had to be imported in spite of the numerous eff0rts made by the public sector to increase production since the colonial era. 1.5 The Rice Issue in the Ivory Coast Rice has been consumed in the Ivory Coast for centuries. The varieties Oryza glaberrima were locally grown varieties until Oryza sativa was introduced in West Africa from Asia (Sawadogo, 1977). Rice consumption, however, was confined to the Western side of the Bandama River which is considered to be the borderline between the cereal crop and root and tuber crops zones in West Africa. 1.5.1 Consumption During the colonial era, however, as in most French colonies, rice was imported from Indochina and used as a wage good. Consequently it was incorporated into the colonial marketing system along with tobacco, alcohol, textiles, etc. Although rice was locally produced no attempt was made to increase local production or incorporate it into modern marketing channels. 10 Political unrest in Indochina in the fifties made it necessary to in- crease local production. Thus, in the early 1950's research on varietal improvement, irrigation schemes, fertilizer use and regulations of rice importation were progressively introduced. During the same period, the expansion of the plantation economy as well as the birth and development in the industrial sector attracted more and more workers from Northern Ivory Coast and the Sahelian countries. The induced urbanization and increased numbers of wage earners created a demand for more and more imported rice due to the weakness of the mar- keting system for locally produced staple foods. The relatively cheap price of rice and its availability discouraged improving the production and marketing systems of local commodities. The local staples might in fact have been looked down upon as unhealthy by the colonial administra- tors. Developing a marketing system for those commodities could also have been a threat to the development of coffee and cocoa which were in demand overseas. Rice, however, at the time of independence was still a luxury good for most of the rural population east of the Bandama River. It was only consumed once or twice per year on special occasions. Rice was not a substitute but a supplement to the diet. The author still remembers the excitement among the children of his own family the day rice was served. After independence, as in almost all the former French colonies, the Ivory Coast did nothing to reverse the trends of the colonial system and give more emphasis to locally produced comodities. The colonial SO‘lution of importing rice was followed. Increasing demand for rice was IKI1: perceived as induced by agricultural policy but rather as a natural 11‘ trend stemming from increasing income and its consequent shifting of demand towards preferred commodities. Rice consumption was even encouraged by subsidizing the consumer's price. The subsidy on consumer's price has made rice the cheapest source of calories (Table 1-2). Thus marketing and pricing policies combined with the characteristics of rice itself (ease in cooking and storing) has made it the first source of calories in the Ivory Coast. Rice today supplies about 25 percent of the calories in the Ivory Coast. This figure could reach 30 percent in the urban areas (Odunfa, 1982). Although the individual impact of the different factors contributing to the change in rice consumption are not easily quantifiable, most authors agree on the importance of price in determining demand (Coulibaly, 1979; Davis, 1978; Humphrey, 1980; Posner, 1976). Less argument is found with regard to the effect of income. A household consumption-budgets survey has shown that, contrary to the general belief, there is no in- crease in per capita consumption of rice. There instead may be a small decline even in the urban areas. The controversy stems from a lack of valid data to assess per capita consumption because local production and 1 the net import of rice are only rough estimates. The variation in per capita consumption estimates calls for a cautious use of income elasticity coefficients (Davis, 1978; Cierie, 1978; Coulibaly, 1979). 1Because of the subsidization of consumer's price for rice one part crf both imported and locally produced rice clandestinely crosses the border of neighboring countries. This phenomena was observed by the author at the Guinean and Malian borders during the survey. 12 TABLE 1-2. Prices of Major Staple Fooda Commodities per Thousand Calories (FCFA) Commodities 1960 1965 1970 1975 1980 Rice 12 12.5 13.8 18.9 26.7 Cassava 12.5 16.4 20.9 20.1 49.1 Yam 20.4 24.6 26.9 24.8 44.5 P1antain 18.1 18.2 19.7 21.7 46.3 Sources: Fane Zoumana Etude_ggs circuits de commercialisation du riz dans 1e Nord-Ouest de la Cote d'Ivoire, 1981. aFCFA 350 = sus 1. 13 1.5.2 Production Three distinguishable types of rice production exist in the Ivory Coast. The most important is upland rice grown on well-drained soils, in both two ecological zones of the Ivory Coast. Upland rice represents about 94 percent of the total rice acreage and supplies at least 88 per- cent of total paddy. Manual cultivation and intercropping are some im- portant factors of this upland type of cultivation. Yields vary enor- mously among regions and within regions over time, and are considerably affected by the total rainfall and its distribution over the growing season . The second type is irrigated rice with an area of about 18,000 hectares, 4 percent of the total acreage. It is the most expensive and highest yielding of the three cultivation systems. However, it requires heavy public intervention. The two main irrigation systems are connected to dams with storage reservoirs and water pumping from nearby rivers using diesel powered pumps. Irrigation schemes are found in both ecolo- gical zones. The last type is swamp rice with cropping in valley bottoms. It is confined to the northwestern portion of the Ivory Coast, the study area. Swamp rice represents less than two percent of the total hectar- age at the national level. Rice production is also characterized by three techniques: manual, by far the most important, tractor use sometimes with combine harvester, and animal traction. Motorization relies heavily on the use of medium size tractors (about 65-horsepower) which are privately owned and often Ifired by farmers for land preparation, sowing, fertilizer and herbicide application, and transportation. Some farmers, however, hired tractor 14 services from the extension agency for harvesting. Recently a small tractor of 24 horsepower has been introduced. Animal traction is limited to the savannah area. These farm equipments are often financed through credit from the extension agency. Although animal traction is used on rice and corn, its expansion is linked more to the production of cotton. The last variation in rice production is the use or the non-use of chemical inputs (fertilizer and herbicides) and improved seeds. The use of the improved package is more frequent in the case of irrigated rice as the package is supplied free of charge to the farmers. For upland and swamp rice the package can be bought for cash or on credit from the extenSion agency. The farmer, however, must make a down payment of 20 percent of the total value. Furthermore, the acceptance of the farmer's request to enter the program relies on the judgment of the extension agency. Being a good farmer and having a good credit record are some of the criteria. Because of the intercropping system it is difficult to estimate the relative share of rice in total cultivated acreage. For food crops it may vary between fourteen and seventeen percent. In 1980, 461 thousand hectares were under various types of rice cultivation. Acreage has been increasing about four percent annually over the last five years (Ministry of Agriculture). 1.5.3 Imports In 1980, 511 thousand metric tons (mt) of paddy or the equivalent of 265 thousand mt of rice were produced. That production, however, was not enough to cover local demand estimated at 510 thousand mt for that year. Thus, rice had to be imported to meed demand. 15 Table 1-3 shows the quantity of rice produced locally, imported and consumed for the period 1977-1980. TABLE 1-3. Rice Production, Import and Consumption (Metric Tons) Year Production Imported Total 1977 227,530 147,539 375,069 1978 240,408 141,714 382,122 1979 254,718 217,817 472,535 1980 243,747 242,441 486,188 Source: Personal communication--Caisse National de Perequation. Ministry of Commerce--l982. Imports were on the average, 43 percent of total consumption over the four year period. The import projection for 1981 was 260,000 mt. Imports have been therefore increasing over the years and have become the main source to cover the annual increase in demand. Burma, Pakistan and the U.S. are the main sources of imports. 1.5.4 Public Interventions and Policies Rice has received more attention than any other food commodity in Ivory Coast. The public sector has intervened heavily in research, ex— tension, investment and marketing. Between 1970 and 1975 alone, FCFA 11,568 million were invested in rice production. An average of about FCFA 2,000 million (U.S. $5.7 million) was spent annually. The stated objective was to achieve self-sufficiency. 16 In order to improve extension and marketing systems, a parastatal, SODERIZ, was created in 1970 to manage the rice subsector. That para- statal was also in charge of the operation of the eleven public mills with a capacity of 250 thousand mt of paddy annually. An incentive was built into the producer's price by raising it from FCFA 28/kg to FCFA/65 kg in 1974. A production contract with input price subsidization was signed with farmers. The nature, evolution, and re- sults of these policies have been well-documented elsewhere (Humphrey, 1978; Ministry of Agriculture, 1976; Bara, 1979). The program came to an end in 1977 as it was costly and inefficient. An evaluation of the program has led some authors to raise an important ‘policy issue, the question of domestic production versus importation. Due to the low yield and the intensity of labor use, in production, the Domestic Resource Use Ratio was above one for almost all the techniques of production (Pearson, et a1., 1980). 1.5.5 Economics of Rice A number of recent studies have attempted to conduct an economic analysis of rice production in the Ivory Coast since the early 1970's, with divergent conclusions. Posner (1973) concludes that rice produc- tion should be encouraged, as rice does not compete with the other crops in terms of land use. He also asserts that the heavy labor input re- quired by rice culture makes it useful for generating employment and for 1~educing urban migration. Finally, he argues that local production should be increased to halt the drain on foreign exchange for imported rice. 17 Humphreys and Rader (1979) come up with a quite different recommenda- tion. According to these authors, unless yields increase and thereby improve the productivity of labor, local production should be discouraged and the Ivory Coast would be better off by importing rice. Furthermore, labor use has to be limited by the introduction of labor-saving technology. Thus rice production should not be used to generate employment. Labor is a scarce resource which should be allocated in the production of other crops such as coffee, cocoa, rubber or cotton, fOr which the Ivory Coast has a comparative advantage. In a second article Humphreys (1978) con- cludes that domestic rice production: (1) reduces national income as it distorts resource allocation, has limited impact on the balance of pay- ment; and (2) does not improve regional income distribution. Using data from Humphrey's study, Stryker shows that the net social profitability of all techniques of production in the Ivory Coast is negative, and both the resource cost ratio and the effective protection rate are greater than one. The author concludes that the Ivory Coast should produce and export cocoa, coffee, rubber and cotton to finance rice imports since these crops have more favorable cost ratios. The analyses of Humphreys and Stryker have some shortcomings. They are based on secondary data which most of the time are rough estimates. The data are not region-specific and represent averages of wide regions with variation in yields, costs and cultivation practices. Finally the studies were done when the world price of rice was low, the exchange rate of the U.S. dollar was high, and the world prices for coffee and cocoa were high. 18 In his study of rice production in Western Ivory Coast based on farm level data, Lang (1979) concludes that in terms of financial returns, rice is more profitable than corn, cotton and yam. Both upland and irri- gated rice are economically profitable, provided that: (l) the oppor- tunity cost of labor is maintained below FCFA 400/day; (2) that for the highly mechanized techniques a yield of 3 MT/ha is achieved; and (3) that the world price for rice is above U.S. $250 per ton. The major problem 'with the Lang study is that it was done in an area where land is very fertile and where rainfall is adequate and reliable. Thus the results cannot be extrapolated to the rest of the Ivory Coast. Lang also included the crops of the rotation in his budgets, so the results reflect more the case of the farming system than rice alone. 1.6 Problem Statement and Objectives of the Study 1.6.1 Problem Statement 1 Changes in tastes and consumer preferences are diverting demand from locally produced commodities towards wheat, vegetables and rice, some of which have to be imported. The change in resource endowments may reinforce this trend as the subsequent slow down in the increase in the supply of local commodities may induce an increase in their price. Only a drastic improvement in their marketing system to cut down market- ing margins and the losses at all levels of marketing channels can re- verse this trend. This improvement is only feasible through conservation and preservation techniques which cannot be developed overnight. Time will also be required to improve the transformation of these commodities in order to facilitate their transportation, cooking, and readiness for Inass consumption. But unless these conditions are met, these commodities 19 will be less and less suitable for rice and the imported vegetables. Historical evidence suggests that as economic development and urbaniza- tion evolve, more and more household members will be engaged in the labor force and less and less labor will be available for home cooking. This factor will reinforce the current trend. More and more food will have to be imported. Furthermore a demand will develop for other commodities such as fruit and livestock products. This will not only lead to a deterioration of national food security, but more and more foreign exchange will be diverted from productive ends towards food imports. This is important because the foreign exchange earnings capacity in the future is uncertain. This problem has been perceived by policy makers. Institutional changes are being performed and more policies are geared towards the food subsector. Rice production has also been perceived as a way of increasing income in the northern region and of partially bridging the gap between the .forest and savannah zones. Owing to the increase in its demand and the relatively better organization of its marketing channels there may not be an alternative to rice for increasing farm income unless heavy sub- sidies are provided as in the case of cotton. The recognition of this feature of rice has led planners and policy makers to give rice a prior- 1 ity in integrated rural development projects although for the first time the other crops have been taken into account. 11hree integrated rural development projects have been designed and are being implemented in Northern Ivory Coast. The north is entirely fggered by these projects. For more information, see reports by BETPA 81 . 20 1.6.2 Objectives of the Study Because of the strategic importance of rice in consumption at the national level and in improving farm income in the north it is necessary to analyze how it fits into farming systems, and if both rice production efficiency and overall farm efficiency can be improved through alternative farming systems. This might be achieved by removing some of the constraints through policy changes. It is important to note that the analysis in this study will be mostly financial as most of the study will deal with the economics of rice production at the farm level.1 The specific objectives of the study are to: - provide information on input-output coefficients for rice pro- duction; - c0mpute returns to rice production; - compare these returns to those of other crops; - analyze the impact of rice production on farm income; - analyze constraints to raising production and the impacts on production of alternative production policies; - and make recommendations for rice production in Northern Ivory, Coast. 1.7 Organization of the Study The study is organized in nine chapters as described below. A description of the data collection methodology is given in Chapter 2. 1See Pearson, et a1. (1982) for an economic analysis of rice pro- duction in the Ivory Coast. 21 In Chapter 3 the physical and socioeconomic conditions of the study area are presented. Some general constraints to rice production are also analyzed. . By using enterprise budgets,resource use, yields and the financial returns of rice production are analyzed in Chapter 4. The chapter ends with a comparison of the gross margin per unit of land and per unit of family labor for the different techniques of production. In Chapter 5, resource use, yields, and financial returns to land and labor for the other crops are also analyzed. The last section of that chapter ranks the gross margin per unit land area and unit family labor of the different crops. The trend in agricultural development in Northwestern Ivory Coast is toward mechanization. The impact of investing in animal traction and/or small size tractor use are investigated in Chapter 6 using capital budgeting. A sensitivity analysis is performed to see how the return of these investments is affected by changing policies in the rice subsector. In Chapter 7 the optimum farm enterprise combination given a set of constraints is computed using linear programming for both manual cultivation and cultivation using rented tractor services. Chapter 8 is an expansion of Chapter 7. A set of sensitivity analy- ses is done to show how rice production and farm income can be affected by a set of agricultural policies. Conclusions and recommendations are drawn in Chapter 9 after a summary of the major findings. CHAPTER 2 RESEARCH METHODOLOGY 2.1 Sampling Procedure The region of Odienne in Northwestern Ivory Coast was selected following the discussions the author had in early 1980 with the Ministry of Agriculture and the agencies in charge of the rice subsector. The most important considerations were: (1) it has a long tradition of rice growing; (2) rice became an important source of farm income during the SGDERIZ era; (3) the low population density allows for upland rice cultivation; (4) it has floodable lowlands which have already been used for swamp rice cultivation; (5) the region has achieved the highest level of agricultural mechanization in Northern Ivory Coast; and (6) an inte- grated rural development project putting a heavy emphasis on rice pro- duction was in preparation. 1 which are most important in rice produc- The three sous prefectures tion were chosen (see Map 2-1). The villages of the three sous prefec- tures were ranked according to their size and divided into three strata. Fourteen villages representing 10 percent of the whole rural population of Odienne were selected proportionately to village size. These fourteen 1Sous prefecture is the smallest official administrative unit of the Ivory Coast. A set of sous prefectures make a prefecture. The city of Odienne is the site of a prefecture with 14 sous prefectures. The chosen sous prefectures were: Tienko, Samatiguila and Kaniasso. 22 23 MAL: :' O o“. mun vona 1.10m * Headquarters of CIDT —- Limit of The study area corresponds to CIDT area the zone of Tienko — Sector limit .- Cotton mill Zone limit Source: 1211321713)Afr1que L not. J MAP 2-1 Location of the Study Area and CIDT's Extension Service Area 24 villages are located within a radius of 30 miles and display marked dif- ferences in size, accessability, and level of modernization. Since there was no list to select farm households from, and not enough information on the farming systems, a one-shot questionnaire was administered to all farm households of the fourteen villages. Information was gathered on household size and structure, cropping patterns, tech- niques and types of rice grown, and participation in extension programs. A total of 579 households were surveyed. Two types of rice production--swamp rice and upland rice--and three techniques of production-~manua1, animal traction, and tractor use--were identified. These two types and three techniques were judged as suffi- cient criteria for sample stratification as there was high correlation between these variables and others such as farm size, household size or use of chemical inputs for rice production. A certain number of households were selected randomly in each of the cells1 (Table 2-1). Proportionality2 was not very important as the intention was to study each specific production technique separately. It was also necessary to have enough observations for the less important cases. Ninety farm compounds were selected in total. 1Nine cells were considered as some of the households have both up— land and swamp rice. This was a selective device, to give a chance to those households who had both types of rice to be selected. 2Even if proportionality were respected it would have been altered as fields but not farm households are the observation unit in the study. A household can have more than one rice field. 25 TABLE 2-1. Distribution of Selected Farm Households by Type of Rice and Cultivation Technique Type Upland of Rice Upland Swamp /Swamp Production Rice Rice Rice Total Manual 24 10 12 46 Animal Traction l4 4 O 20 Tractor 12 8 4 24 TOTAL 52 22 16 90 Source: Presurvey data. 2.2 Selection and Training of Enumerators Six enumerators were preselected and given a six-week training course on the FAO's FMDCAS package1 and general agricultural practices in Northern Ivory Coast. The enumerators were requested to have lived on a farm, and to be from the region or at least be fluent in the local languages. After a field trial of the FMDCAS package four of the six preselected were retained and each of them was assigned about 23 households in a specific zone. Coordination and supervision was performed by the author who worked also as a contact with the central and local agricultural administration. 2.3 The Survey The actual survey data collection began in March, 1981, with the resource inventory forms covering the following subjects: - farm labor IFMDCAS stands for Farm Management Data Collection and Analysis Systems. 26 - farm land - crops - farm machinery and equipment - draft/pack animals - productive livestock - farm buildings - implements and tools1 The farm land and crops forms had to be repeated after planting as some farmers changed their planned production patterns. As a consequence of the increase in tractor service fee, the lack of tractor service, and the decrease in the official producer's price of paddy from FCFA 65 to FCFA 50 just before planting, many farmers dropped rice from their farm plans or used a less expensive technique of production. Some farmers shifted from tractor to animal traction. The inventory changes form was administered twice, once in August- September 1981 and in March 1982 at the end of the survey. The input/output, income/expenditures data was recorded using the resource utilization form from April lst, 1981 to March, 1982, following the cost route technique as described by Spencer (1972) and Norman (1973). Household members were interviewed twice weekly. Because of the lack of reliable secondary data and because the study required detailed and ac- curate data, this costly technique was used rather than the farm business survey approach which has the advantage of reducing sampling errors 1The financial liabilities form was administered later in July be- cause of the sensitivity of the issue in the study area. Some confidence had to be established between the farmer and the enumerator before such confidential information could be collected. 27 because of a larger sample (Spencer, 1972). Errors at the farm level were reduced at the expense of sampling errors, which could have also been reduced by increasing the sample size if there were no budget con- straints. However, an attempt was made to reduce the sampling errors in some cases by purposely increasing the number of observations in some cells. But the reduction of the number of observations induced by the change in planting plans of some farmers might have increased that type of error, as less than the expected number of rice fields was found in some cells. 2.4 Data Preparation and Analysis The FMDCAS package consists of precoded questionnaires and computer programs in Fortran IV for data checking and editing and farm management analysis at different levels of aggregation, such as the farms and the specific crop enterprise. The programs produce a specific fixed format of printouts for the farm, crop, livestock and supporting analysis (FAO, 1977, Annex 1). The major strength of the package is the printing out of a networth statement, an income statement, a Time of resource use state- ment, a selected set of efficiency and productivity analysis factors for each farm, and an enterprise budget for each crop of each farm. The major shortcomings of the package are its inability to handle 1 qualitative data and the inefficiency of some of the computer programs. Other shortcomings of the package were analyzed by Kamuanga (1982). 1Some of the programs use unnecessary storage facilities which makes computation expensive. For some of the correction programs, for example, only 27 columns are used. The package can also be cumbersome as some of the requested infbrmation was not relevant for the farming systems being studied. 28 Most of the analysis was done with FMDCAS using the relevant aggre- gations at the farm and crop levels. Further statistical analysis was done using whole farm planning models, mainly linear programming and capital budgeting techniques. Although the FMDCAS data output files can 1 directly serve as input files for SPSS the use of that package was found unnecessary for the study. ‘spss, Statistical Package for Social Sciences. CHAPTER 3 ,AN OVERVIEW OF THE RICE SUBSECTOR IN THE IVORY COAST 3.1 Physical and Socioeconomic Conditions of Northwestern Ivory Coast 3.1.1 Physical Conditions Northwestern Ivory Coast is made of gneissic and granitic plateaus, about 400 meters above sea level with isolated, top-rounded doleritic hills of less than one thousand meters altitude. Soils in the area are mostly ferrous types varying from sandy to almost pure clay deposits. Soils are also often characterized by low phosphorus content. The high concentration of rainfall induces considerable surface runoff as well as subterranean leaching, resulting in the removal of some of the mineral ' components of the soil. These phenomena lead to soil acidification if a proper fallow is not fOllowed after land has come into cultivation. The soils are fragile, and they lose their fertility easily. Thus soil conservation through proper cultural practices (e.g., crop rotation, and land preparation) is an important issue in this farming setting. The regional climate is affected by two different wind movements. Humid but warm air from the Atlantic Ocean is pushed northwards by the southern trade winds. This humid air is met by the much more dry northern trade winds. 29 30 The temperature varies between 15° and 32° centigrade over the year, with an average of 24°. Humidity varies from a low of 15 percent in the dry season (in January) to a high of 98 percent during the rainy season (from June to October), (BETPA, 1981). Annual rainfall averages 1600 mm, but it is unevenly distributed throughout the year. The rainy season, starting in May and ending in October, is followed by a six-month dry season (Map 3-1). The vegetation is a mixture of secondary forest, bush and savannah, since most of Northwestern Ivory Coast lies within an intermediary zone between the rain forest in the south and the Sahelian savannah further north. The hydrological system is essentially made by the tributaries of the Niger River. Two of these, the Baoule and the Kere Koule run from southwest to northeast, and their flooded valleys are used for most of the region's swamp rice production. 3.1.2 Socioeconomic Conditions The population of the region is essentially of one ethnic group, the Malinke, a branch of the Manding, who occupy a large portion of West Africa from Western Ivory Coast to the Gambia. The traditional cul- ture has been strongly influenced by Islam, the dominant religion. Limited numbers of the Senoufo have migrated in from the east, attracted by the abundant land and fertile soils. The co-existence of the two groups is becoming more troublesome, as the newcomers are said to be very aggressive. Thus, the Malinke are seeking to restrain the expansion of the Senoufo by limiting their access to land (Chataignier, 1980). 1500 1‘00 IIOO > . Korhogo 10°. Ahnngun (x1 San PEG: \ 3200 2100 )wsjssluxy ~___"°° ”’,,/4r/////r 3100 . . —~——> A \ 200° 2 I 00 Source: ASECNA MAP 3—1 Average Annual Rainfall in the Ivory Coast (1961-1970) (mm) 32 The region is characterized by low population density, on average 7.5 inhabitants per square kilometer (the national average is 24/km2). In addition, the population growth rate is relatively low, averaging 1.3 percent annually (versus 4 percent nationally). The low growth rate can be attributed to considerable out-migration towards the south. The prin- cipal socioeconomic unit in Northwestern Ivory Coast is the compound, which is made of related households. The number of members of the com- pound varies widely among compounds. The average size of a compound for the sample is 12.7 individuals, with a coefficient of variation of 67 percent. Most of the decision making is centralized at the level of the compound head, called Sotigui, who represents the compound at the village council, chaired by the head of the compound which founded the village. A certain number of villages (often - close) makes a nggg, which is the traditional political unit. The integrity of the nggg_was respected in defining the sousgprefectUres. This helps explain why Odienne has so many sous-prefectures. All cultivated lands of the compound are under the control of the head, who knows the boundaries of the compound ownership. The centraliza- tion of decision-making power in the hands of the compound head partially explains the outmigration of the youths, and hence the aging of the rural population. The traditional centralization of authority seems incompat- ible with the monetization of the economy. Youths acquire new needs, induced by their exposure to the market economy, but they feel themselves denied economic and financial freedom by the traditional hierarchical structure, (Chataignier, 1980). 33 The system also oppresses women. In contrast to the Madingo in Gambia, Malinke women do not possess land and crops of their own and are thus financially dependent on their husbands. The concept of owner- ship among the Malinke is misleading, as the income and produce generated from women's fields are captured and kept by the head for use by the com- pound. This is quite different from the situation in Eastern Ivory Coast, where women have full control over food crops and even over coffee and cocoa plantations. In contrast, Malinke women have partial control only over their vegetable plots, but even on these plots, part of the income generated is used to buy spices for compound consumption. A number of recent development projects have attempted to increase female income by increasing commercial vegetable production. It is still too early to tell what impact these projects will have in terms of finan- cially liberating the women. However, based on past experiences, it is likely that even if the projects succeed in increasing commercial vege- table production, such production will be incorporated into the male- controlled compound production system, increasing the workload of the women without necessarily benefiting them financially. A similar pattern occurred when cotton was first introduced into the Ivory Coast. Cotton was originally grown by women, but because of its high profitability, it has been taken over by men. It is now one of the most important crops of the system. 3.1.2.1 Labor _ Division of labor between female and male members of the compound occurs by activity and by crOp. Activities requiring strength, such as land clearing and preparation, are performed predominantly by male 34 members, while those requiring care and skill, such as sowing, weeding and thinning, are frequently performed by female members. Harvesting,' which must be completed in a short period of time, is done by both sexes. In actual practice, however, the division of labor between the sexes varies among compounds and depends on the structure of each compound. Male workers have more direct responsibility and involvement in millet, sorghum, yam and cotton production. In the case of rice, pri- mary responsibility for production varies with the end use of the pro- duct. When rice is produced for home consumption, particularly in the case of swamp rice, women assume the major role in production. But when it is produced as a commercial crop, men take the lead. Compound labor is the most important source of labor, supplying over 90 percent of all farm labor. The remaining labor (Table 3-1) is hired labor, for which there are four sources. The first source of hired labor are the women's associations and the youth's associations which exist in each village. These provide the cheapest labor, as wage rates for women and youths are regulated by the village council. The money earned by the youth's association is used to finance public expenditures of the village. The second source of labor are male seasonal laborers. They are contract- ed to accomplish a well-defined task or to work within the compound over a fixed period of time. The wage rate varies with the length of time and the nature of the task. For example, land clearing for swamp rice pays approximately FCFA 25,000 per hectare, while harvesting the same field pays approximately FCFA 7,000. The third major labor source is the day laborer, who is paid a daily wage to perform a specific activity. Wage rates vary according to sex, 35 .mumu am>czm “muczom N mm.w pm.m_ ~.PN o~.N~ po.p~ op can» «so: om e_.m co.—~ n.ep mm.—m eo.m o_.w x v m a _fip :a_ We 5&2 ofie mwxvm m No.F oo.~ w.m —.mm mm.P a; m can» mmmd meowpm> Amcaozv Ameaozv cone; Amamvcmzv Aagv newwno chance“. when“. coho.P : cmmga mm Mm. 3 .5 ES... eonssz cm~wcouoz Poswc< pcmocmm Lona; mmmcm>< cmc< acapm «nu cw mNmm Econ an mm: mucaommm new .mNPm Esau .Flm m4mu mg» cm mpmccmsu mcwumxemz wuvm Tm $52“. .v . 3535 F33: . . 1 pace-5 7.33:5; .8528 «:1 _ 8:. m. 1 a . 8:... A1 11... . «89.58 .3 .832; 2:. 3:5 «55:38 2:. :2.» 32...... - - . ---- - ..--....L- «2358 8... 3:33. .... .... - - - -1 -. ... I» 222.53.. 22.8 TI! 3339... . . . . 1 - - .- . . p - - - 3:33;: . . _ 3:. 3389... . . . . . . c . 3mm. «252 3:3 . . . . . . conga: 332,23- . L. _ . . . u . . . . .. . eeaedeaz ad.¢ .eee. . . o 1 o? £9303 uflxsflz . -------€ ...... :55. a5 2. i A 3:53 out. 3339... tug-3.... we 53.89..— 32.75 _ 57 In these remote villages, the merchants may also open a credit line to the farmers at a usurious rate. The loan and interest will be deducted from the farmer's crop value and he is committed to sell his paddy to the merchant (Fane, 1981). In order to enter the official channel, the paddy must meet several requirements. - A level of moisture less than 19% No more than 5 percent of red grains No impurities (e.g., stones, inert matter) - 80 percent of varietal homogeneity The percentage of red grains and homogeneity are allowed to fall below these requirements, but a price penalty is exacted. Previously, the licensed wholesaler had a monthly quota imposed by the Caisse de perequation for both local and imported rice. Since the liberalization of rice marketing, there is no quota, but wholesalers must sell their supplies in a well specified region of the country. All transportation costs of rice at the wholesale level are reimbursed by the Ministry of Commerce at a rate of FCFA 22/TKM. Whether rice is im- ported or locally produced, it is sold to the wholesaler at FCFA llB/kg. The retailers who sell other commodities than just rice get it at FCFA 124/kg and sell at FCFA 130/kg to the consumers. Since all processing and long-haul transportation costs are paid by the Ministry of Commerce, the price of common grade rice is standardized over the whole country regardless the qualities and the varieties. Because of the requirements of this official channel, only large producers and the medium producers located near mills take advantage of 58 it. The official and traditional channels differ in terms of both sup- plies and customers. The official channel is more important for deficit regions such as the south, the center and the east. It is also important for urban consumers. The traditional channel is used by small traditional producers and recruits its customers among the traditional rice consumers of the rural and urban area, who pay attention to the quality and taste of their rice and who dislike the odor of the chemical preservatives used on the rice of the official market. 3.3 Constraints to Rice Production Agricultural production is a complex biological, socioeconomic and institutional process. The determinants of acreage, yield, costs of production and price of output are functions of the natural, physical, social, economic and institutional parameters of the setting. Among the factors determining the biological potential of a plant are soil quality, the amount of rainfall and its distribution, and amount of sunlight. The soil structure for example helps determine a soil's capacity to hold moisture, as well as the plant's capacity to develop roots. By affecting moisture supply, solar radiation can increase or impede plant growth. Ecological conditions do not seem to be an important constraint to rice production in Northwestern Ivory Coast. The region is one of the most suitable for rice production in the country (BETPA, 1981). The constraints to rice production stem from the resource limitations, mainly labor and capital limitations, as well as the institutional organi- zation of the agricultural sector. The resource constraint problem can be traced back to the level of agricultural development which implies 59 a certain level of income and combination of labor and capital in the production process. Northwestern Ivory Coast is short in both labor and capital while the farming system requires a heavy use of either capital or labor during a short period of time. Up to now the institutional organization and agricultural policies have not been adequately geared toward finding solutions to these resource constraints. 3.3.1 Labor Table 3-6 shows the distribution of farm labor over time for the four rice production systems (techniques of production). For all tech- niques of production, there is a concentration of farming activities between May and November, with two peak periods, June-July for planting and weeding, and October-November for harvesting. The availability of labor during the planting season determines cultivated area, as in some cases more land is cleared than planted. Compound labor only is used; it is not common to use hired labor for planting, because there is no seasonal labor available at that time, since compound members are tied up with the labor requirements of their own compound. There is also a lack of trust in outsiders for planting. The peak season of June-July represents 38 percent and 36 percent of labor input respectively for manual and animal traction cultivation. This period is labor intensive for rice; consequently, increasing acreage of rice may be costly for the compound in terms of other commodities as it has to produce most of what is consumed. The structure of the household may also affect the importance of different crops in the compound's enterprise combination; not only is there a sexual division of labor, but the physical strength required and 60 .mpmu >m>e=m "wueaom oo_ ow.mp um.oe -.¢m m.m :o_pumep Paew=< + eouumeh cop No.w No.~m m¢.~m mm._~ Legumeh cop up.“ um.mm eo.mm ~w.a~ cowuomeh Fms_=< cop mm.“ o.mm mm.em m~.¢~ Peace: ...... .....M. ......m Page» mcwmmwooea em. mewzopm -mcwemmpu nem>oz maawcsomh aeeasnm. -Lmnsouamm umzma< new. xmz -smaeoowo -w:=a -;uemz mmmucmoema :owuoauoea eo mmzcwcsomh we» op mcwusooo< nowema an copuuscoea mumm :. vow: page. Loam. eo copu=a_euawo .o-m m4meam 0;» mo mcwccwmmn we“ we uwueoumg mm: msoucv Esme eeo .wsoucw Stew ewe ova—ucpmmcwcemm zpwsmdm .mamu xm>gam .moeaom momew>< mo cpo.om moo.~m¢ coo._m¢ m.mm N.NF om.m comuumep pesmc< m www.mm omm.¢¢P.F owm.nop._ ~.om m.m_ me.¢_ anew gopomep _F mmm.mv omo.mmo omm.mpm P.mm m.mp. No.5 Louumeh NF www.cm omm.—mm ome.m~m N.mm ~.¢P on.“ cowuomeh Fmsw=< mm mpm.mp om_.mmp omm._op ~.~o_ n.op mm.m peace: m=o_am> Ap : comuuauoea eo macmcnump an weave. seem uwz can mN_m epoxmmzo: .m~_m Egon .n-m u4m

eam .moeaom c.¢ m... m.e m.¢ m.m. ..m. ..m. m.m ..o w.mm 4emz m.. o.m m.o. m.~ ... ~.¢N :o..e>.u.=9\mgmu m... .... .... ...m N... - - - ..m. 2:353:38 v.0 o.o m.m o.m ..m ..o - - N.m. =o..e.mamea ..om z o m =< an 6 <2 < z u a .mgop mm.u.>.uo< Ammo-cmzv Am; Log. co..m>.».=u _cacmz mo.¢ ucupaz so» apw>puo< an can spec: ma page. page. we :o.u=n..um.o .F-e m4m

esm .muezom ... a... e.m N.N .... N.m m N.. N. N.eN .«eo. ... a... ... m. m.eN a=.mmaeetd \mcmpmm>emz m.. ... ..m. N.. m.eN ea..a>...38\aeao m.. ... ..m e. N.N. me..ee..\me.zem .. m. m.m 8.. N. N... eo..aeaaa.. ..am 2 e m < 3e 8 z < z . a .e.o. md...>..u< Axum-:mzv Am: ewe. comuumeh .ms.:< - xp.>.uu< he can spec: »a wage. Loam. mo :owuaaweam.o - mu.m vcwpaz .n-e u4mm>ezm "mogaom ¢.¢ m.m. m.m ..o. m.m ..v m. m. ¢.em 4ee: ..m ..o. m.m m.- :o.um>.u—=u\memu m.. m. N.~ ac..:m_a\mc.3om ~.N c. m. m.m :o..aemame¢ ..om z o m :< .a :6 .uo< Axon-cmzv as: ewe. mm: goaomeh mu.m uzmpaz pr.>.uo< an new gucoz an «age. Lone. uo co.u=n.gum.o .~.-¢ m4m

mo: eu.;3 .m».aou eo .mou xu.:=ueoaao on» m:.uu=umu an cmuzasou we: =.meos um: mgpm .opuv zu>e=m "mueaom . e.mem . N.eoN. omaxoa. eosocae. ...; m ¢.mmn N m.oom mmoxoma um>ogas. uzoguwz eouomep m N.mmw m m..mm ceou - mops e m.nmm e o.mmm .m:o.u.cmgu - museum mean N o.omm N m.¢no. mmmxuma um>oens. - museum wean copuumep .os.:< o. «.mmo o. w.mwn memguo\o.:oe - mu.e m m.mm. m N.mow Eagmeom\um...s - mow; N «.meN m ...mw :Lou - mo.. m «.mom a m.mom .oco...cmeu - museum mesa m m.mom m ~.m~o. mmmxoma cm>ogasp - museum mean .macmz xcom .oo-coz xcoa Awupau mo maxw N\e.mcez .oz Ae=m "muezom a.~ «.mm ... N.o m.m. ..em ¢.w m.. c.5w ..o: N.m N.¢. ¢.m m.om :o.»m>.u.=u\memu .m~....gmm N.N a... 0.. m.m. me..eo.a\me.zom ..m m.o m._ v.5. cowumemamea ..om z o m < so a z < z a a .ouop mm...>.uo< Axon-cozy Am: ewe. co.pw>.u.=u Peace: “wu.m asmzm co. .....oo< a. aea eoeoz .a .eae. cone. to eo..=e.c.m.o .N.-e ..m<. 101 This partial adoption of innovation is very common in the region. The second variety used on four fields was a local variety called DJU Kemin, which is preferred by the farmers because of its taste. It does not enter the official market, and is sold only through the traditional channels. On the last two fields, there was a mixture of different varieties. 4.2.1.1 Yield The average yield for the fields which used the traditional package was 1,757 kg/ha. The yield for the field which received the improved package was 39.1 percent higher (2,444 kg/ha). The coefficient of varia- tion in yield was 12.8 percent, thus lower than in the case of upland rice (32.3 percent). The same equation as in the case of upland rice was used to estimate yield. Again labor and the use of the improved package were the only significant determinants of yield. 4.2.1.2 Financial Returns The average gross margin per ha was FCFA 94,642. It was FCFA 102,210 for the field which used the improved package and FCFA 93,696 for the eight which did not. Table 4-18 presents the enterprise budget for the fields which did not receive the improved package. The gross margin is 60.2 percent higher than in the upland case. The difference stems from the higher yield of swamp rice (51.3 percent higher). The share of hired labor in total cost was also lower. The cost of labor was less than FCFA 3,000 for seven of the nine fields. The lower cost of labor was due to the fact that swamp rice manual cultivation is a female activity and as such uses only a limited amount of hired labor. 102 TABLE 4-18. Enterprise Budget Per Ha - Swamp Rice - Manual Cultivation - Unimproved Unitary Total Value Value Quantity FCFA FCFA I. Income Production of main crop (kg) 1,757 60 105,420 Production of second crop (kg) Other Total income 105,420 11. Variable Costs Seed for main crop (kg) 78 76 5,958 Seed for second crop (kg) Fertilizer (kg) Npk Urea Hired Labor (man-day) 14.4 414 5,796 Animal traction (hour) Tractor Total variable costs 11,724 III. Labor Input (Man-Day) - Total labor 87.8 Compound labor 73,4 IV. Gross Margin 93,696 V. Other Productivity Coefficients Gross margin/manday 1,276. Cost of production/100 units Source: survey data. 103 The gross margins per man-day on nonimproved fields was FCFA 1276.5 but this increased to FCFA 1351.9 for the field which was sowed using the improved package. As expected the gross margins per unit labor were higher than for upland rice. But the difference may be lower when the risk factor associated with swamp rice is incorporated, particularly as it does not allow intercropping. 4.2.2 Animal Traction The use of animal traction on swamp rice was limited, as tractor service was available for farmers who wanted to expand acreage. The in- creased return was sufficient to cover the tractor rental fee. However, because of the increase in tractor service fees and the decrease in the producer price of rice, animal traction has become more attractive. In some cases farmers cannot have the tractor service even if they are willing to pay, as tractor operators are unwilling to travel long dis- tances unless there is enough service to be performed in a given loca- tion. Animal traction is therefore used for plowing, which has to be done early in the season before the soil becomes too muddy. The average field size was 1.12 ha, with the smallest of the six fields being about .7 ha, and one above 2 ha. Labor input was slightly lower than in the case of upland. This is normal, as there was no inter- cropping. The share of family labor was about 80 percent, only 4 percent lower than in the case of manual cultivation. The distribution of labor input by activity and by month is given in Table 4-19. As in the previous case, weeding and harvesting were the most inten- sive in labor use. Consequently, the peak periods for labor use were the months of June-July and October, when these two activities were 104 .mpmc zm>gam “muszom m.F m.PN o.P ¢.e «.mp F.om m.¢ m.— «.mn 4cmz e.¢ m.up _.N w.m~ cowum>wup:u\wcmu m.m_ m=_pcmpa\mcvzom F.w P.m m.p m.N_ :owumcmamga pwom z o m < an a z < z m a Pouch mmvup>wuu< AmmaucszAa: ngv covuumc» Fmsp=< «ova asmzm ”zuw>Puu< a; ccm nucoz an unacu gonna do cowusnpgumwo .mFue m4mgzm "mucaom m._ o.m F.NN P._. o.¢ a.~_ m o.mm 4gm: w.v m.up F.NN :ovum>mup=U\mcmu F. m.~ N.F u=_u:m_a\mcwzom m. m._ N.N cowumcmawga Pwom o z o m < no a z < z u a _muoh mmwuw>wpo< Ammo-cmzvnm= cmmv mm: Louumgh usage: »a van sgv>wbo< 39 Hanan Loam; ea covpaarcumeo .Nmue u4m ma: sows: _mupamu mo wupcaugoaao mg» mcwuuzcmo an umuzasou mu: cvmcms pm: mghm .mumv zm>c=m "mucsom N N.¢mmp N N m.¢mmp —m:owuvcmgh P N.woN_ F q m.Nomp mmmxuma uw>oLnEH mm: coauack m o.mNNP o m m.eNNP pmcovuwcmg» q ..N¢N_ m _ o.omm_ mmaxuma um>ocasH cowuumcp pmewc< u m.NmNP m m m.mNN. .mcowuwumch m N.mNmP e P m.—mm— wmmxuma vw>ogns~ comum>wp~ao _macmz xcma angina: scam meowpm>gmmoo Aecesp , Leeeegh e N.N e m.eNN_ e owNmN emexeee pecewupeecp op N.N m e.oamp m oewa emexeee ee>eceep eeveeecp Peswe< P o.e m m.eNNP N ememm emaxema _acopewemce N e.N e m._mm_ _ ePNNOP memxema easecaae peace: eewm eEezm mp w. m_ m.oom mp oowpm emexeee _eeewumeecu op N. N w.eONp mp mpmee eeexeee ee>egesw . cepeech m e.N PP m.pmm PF ompmm eceeueepc e e.~ o. e.mem m_ NeeNm emwxuaa Pacoweweace eeevm ecee N, m._ e m.e~e_ a eePNm momxema em>ocaew eeeum ease coppeecp peeve< m e.m m— N.NNN NP omomm Legue\ep:em-eepc N m.m mp N.eow o— ONNmm segmcem\ue~_msueewg e N.m ep _._mw m emwmm eceeueewc m e.¢ NP m.mem N emmme «maxeaa Pacoeeweace eceam maze __ m._ m N.eNe_ e eemwe mewxeaa em>ocaew eeeum maze Peace: eewm eeepez xeem ocas.== . ..eNe. . N.NNN. N NNN.NN emsocae. cowuo> 3 .....U Louumsu N N.NNN. N N.NNe. N NNN.NN em>ocas.== N N.NNN N N.NNe. N NN¢.NN em>ocas. cowuueu pm... Em N N.NNN. N N.NNN. N eNN.eN ea>oeas.== N N.NNN. N N..N.. . NNN.NN em>ocas. =e.ue>.u.=e .eeeee ee.c eaezm N. N.NNN N. N.NNN N. NN..NN emsozas.:= e. N.NNN N N.NNN .. NNN..N em>ocas. :e.pe>.u.=e Neueegp N N.NNN N N.NNN N NNN.N¢ emsocas.== .. N.NNN .. N...N N eNN.NN ee>ocas. . zeppeegu .espee N ..NNN o. N.N.N N NNN.eN em>ocaa.== N N.NNN N N.NNN N N.N.NN em>ocas. =e.ue>.u.ee .eeces ee.g eee.e= xeem Neeueez xcem Neeucez xeem egxi esewegeeh ee.m :.ugez\ :.mgez\ cwmgez we Nuez NNecw mmegw max» Apuegeeaeu < .aNue udmc=m fleeceem N. ...N N.NN NN. N.NNN Ne N.N N.NN NN. ENNNNON N ..N. N.NN NN. .N...z . NN N..N N.NN .N.. NNNNN>< N N.NN N.NN. NN.N am: coeemc. N. N.NN N.NN NN.. co.eemc. .Ne.=< Ne N..N N.NN NN. .Nacmz :Neu ....N.......N..zs Ema“... smug“... swarm”? a... umeeu Nge>H :ceumezngez :. eeNaeeeeNN Newmgw cesuo :. em: eugeemem ..-m NNNe>g=m "megaem N.N N.N. N.N N.N N.N. N.N. N.N. ..N N.NN .Neo. N.N N.N. N.N ..N. Nc.mmeeeca \m:.ume>eez N.N N.N N... N.. N.NN co.em>.u.=e\mcme N. ..N N.N N.N N=.N=N.NNN=.zom N.. N.N N.N. ..N N.NN NONNNLNNNNN ..ON 0 N N NN N z N z N N .Neo. NN...>..N< Axee-eezv Nup>Nue< Nee use case: see gene; Ne ce.p:evggm.nuee.ue>wa.eu .eecezucgeu .Nnm m4mc=m neeceem N. ..N e..N e.N N.N m... N.N N.N e.m. N.NN .Nuek w. ..m c..N N.N N.om m=NNNmeegm \mcwume>gez N.N N.N m.o. N.. N.NN =e.»e>.p.30\egeu N. N.N N.. ...N N=.N=N.NNN=.20N e. N.N ..N N.N N.N. eeNuegeaegN ..em 2 o m < so a z < z N a .epeh Ne.u.>.ue< .mxeeneezv Nup>.pe< Lee eee :peez Lee NNNN. NNNNN No..=N.cNN.N "ENNNNNN .N-N NNNN. 134 5.1.2.2 Yield The lack of sorghum in pure stand makes yield estimation erratic. But the yield in intercropping was 613 kg/ha. The second crop in the mixture had an average yield of 124 kg/ha with a variation related to the differences in mixture composition. 5.1.2.3. Returns The average computed gross margin per hectare was FCFA 37,990. But both the margin/ha and the gross margin/man-day present some differ- ences among fields because of the differences in cultural practices, intensity of resource use, etc. The return in the case of mixture with corn was FCFA 521 versus FCFA 561 for that with rice as a secondary crop (Table 5-7). 5.1.3 Millet and Fonio Millet and Digitaria Exilis (fonio) are the least important crops for the region and for the country as a whole. The hectarage of fonio, usually grown on poor soil, has been declining over the years in favor of corn and rice. Fonio actually is the reserve grain grown as a pre- vention against risk for poor cropping years. The number of fields found--nine for millet and sixteen for fonio-reflects their secondary position in the farming system. The average field size was less than .5 hectare (Table 5-1). Labor inputs for both commodities present some similarities with sorghum in terms of number as well as in terms of distribution over time. Most of the labor was supplied by compound members. In the case of millet the bulk of labor was supplied by male members. 135 TABLE 5-7. Enterprise Budgets for Millet, Fonio, and Sorghum (Per Ha) Millet Fonio Sorghum Yield (kg/ha) 634 568 613 Value of Production (FCFA) 32,330 28,320 39,260 Costs (FCFA) Séed (FCFA) 1,230 1,940 730 Labor (FCFA) 120 230 540 Animal traction (FCFA) - - - Tractor service (FCFA) - - - Tota1 Variab1e Cost (FCFA) 1,350 2,170 1,270 Gross Margin/ha (FCFA) 30,980 26,150 37,990 Gross Margin/Man-day (FCFA) 449.4 398.5 542.4 Net Margin/Man-daya (FCFA) ‘, 446.8 , 393.6 539.6 Source: Survey data. aSee footnote page 115. 136 These two crops are grown following the traditional methods and practices as no research has yet been conducted on their cultivation. They have been somewhat ignored in agricultural policy and research design. Consequently traditional varieties were grown. Yield data, returns, and costs of production are presented in Table 5-4. The gross margins per man-day for both commodities were lower than the daily wage rate of FCFA 500. As already noted they are grown because they are a part of the local diet and they fulfill speci- fic objectives during the periods of food shortage or during some cere- monies. 5.2 Tuber Crops Among the four tuber crops grown in the Ivory Coast, only three can grow in Northern Ivory Coast for agroclimatic reasons. These three are yam, cassava and sweet potatoes. Cocoyams, the fourth, grows only in the forest zone. Sweet potatoes are often grown on small plots of less than 1/4 hec- tare, harvested and consumed within the compound as a snack or as a vegetable with rice. Cassava production is also limited and it is used in the same way as sweet potatoes. But its production is expanding par- ticularly around Odienne because of a growing market induced by the presence of southerners for whom it is an important component of the diet. Because of their secondary impact on farm income and resource allocation they are not analyzed, although data was collected on them. Yam is the only tuber crop worth analysis. All the three species of yam grown in the Ivory Coast are cultivated in the area. These species are--Discorea alata (water yam), Discorea 137 cayenensis (yellow yam) and Discorea rotundata (white yam). The two last species are the most important in the region. Yam along with plantain and cassava are the major substitutes for rice. It is also one of the few food commodities produced over the whole country. 5.2.1 Resource Use The average size of the 61 yam fields was .74 ha with the largest field slightly smaller than 2 ha. All the yam fields were located on newly cleared land. Two hundred and eight man-days were used per hectare. Although production was spread over the whole year, about 60 percent of total labor was used from April to July for land clearing, plowing, partial weeding and staking. Care and cultivation, essentially weeding and staking were the most labor intensive with 45 percent of total labor use. There was no peak labor period for harvesting as the different varieties come to maturity at different times (Table 5-8). Because of the strength required for most of the activities in yam cultivation most of the labor was provided by male members of the com- pound. Surprisingly, in spite of the intensive use of labor, the share of hired labor was limited to 7 percent. Most of the hired labor and the communal exchange labor, important in the case of yam cultivation, was used for making hills. The number of hills per hectare was 6,134 with a seed per hill weighing 213 grams on the average, thus a seed rate of approximately 1,306 kg was used per hectare. There were, of course, differences among fields as seed weight varies with yam variety and all the fields 138 .Nuee Ne>g=m "eugeem o.m. N.N ..N N.N N.N. o.mN N.Nm N.NN N.om N.N ..N. N.N. N.NON .Nueh N.N N.N ..N N.N ..N N. N... N.o. N.NN mcpmmeeege \mcwume>cez N.NN NN.NN>.N.NNN¢NNN cewueew.ee< NNN.U.NNNN N.N N.N. N.NN N.NN N.N. 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New: Ne.mw> we m>g=u acmsumsne< .NIN NNNc. a:og..: usage. 0.0..00.. 0.0..00.. 0.0..00.. 0.0...0.. 0.0...0.. 00..0.0.. 000.0.. 000..00 0....0. ..uogu so..< 0.3.0: .0: 1 1 1 80.80 000.000 80.80 000.000 80.80 1 0.32 =8. 1 1 1 1 1 1 1 1 1 80.80.. .33 1 ..0ogu 0.0..00.. 0.0..00.. 0.0..00.. 0.0..00.. 0.0..00.. 00..000.. 000.00... 000...0 .00.000..1 ..ougu ogowoo :.:.~¢ 000.000 000.000 000.000 000.000 000.000 000.000 000.000 000.000 000.000.. ...o. 1 1 1 1 1 1 1 1 000.000.. 50.90.. 0:. so. .cmsoma>c. 1 000.00 000.00 000.00 000.00 000.00 000.00 000.00 000.00 1 .00.. .cocosgu. 1 000.00. 000.00. 000.00. 000.00. 000.00. 000.00. 000.00. 000.00. 1 5...». 50.9... 1 000.00. 000.00. 000.00. 000.00. 000.00. 000.00. 000.00. 000.00. 000.00 .catn.:ao a... gosuo 1 u.mou cox.. 000.000 000.000 000.000 000.000 000.000 000.000 000.000 000.00. .00.00 .auc. 00..0.0 00..0.0 00..0.0 00..0.0 00...... 00..0.0 000.0.0 00...00 1 ..o 0:. .aa. 1 00..000 00..000 00..000 00..000 00..000 00..000 00..0.0 000.00. 000.00 . goes. 1 000..0. 000..0. 000..0. 000..0. 000..0. 000..0. 000.00. 000.00. .00.00 son—...gu. 1 000.00 000.00 000.00 000.00 000.00 000.00 000.00 000.0. 0.0.0. 0000 1 . «.000 u.oo.go> 00..000.0 00....0.0 00..000.0 00..000.0 00..000.0 0....00.0 000.000.0 000.000.. 000.... .~.o. 1 1 1 1 1 1 1 1 1 Lugu0 1 000.00. 1 1 1 1 1 1 1 1 0:... o0e>.o0 1 00..000.0 00..000.0 00..000.0 00..000.0 00..000.0 0....00.0 000.000.0 000.000.. 000..00 co..uavoga .9 o:.o> 1 oaco>u¢ 0 sun» . so.» 0 so.» 0 sou. 0 goo. 0 sad» 0 gas» . so.» 0 .0.. .o..... - .muoz 0.... ..-o u.m<. 172 able to adjust hectarage and yield as quickly as it was assumed in the model, investing in animal traction is not financially attractive. The net present value in the case of tractor is high (FCFA 4,441,055) even higher than the initial investment. But this high net present value is due to the tremendous increase in cultivated area (637 percent) parti- cularly in the hectarage of cotton. Thus the farmers who invest in tractor receive additional input subsidies from the government. The incremental subsidies for the 8 years is given by the formula: 3 Sc A2 n=l (l + 1')" where: Sc = amount of subsidy/ha A: = increase in cultivated area for cotton for year n The total amount of subsidy for the 8 years is FCFA 3,200,895 or 72 per- cent of the incremental income. It can therefore be concluded that in- vesting in tractor is profitable because of the induced increase in cultivated area of cotton. 6.3 Increase in the Price of Rice Consumption of domestically produced rice is subsidized by about FCFA 40 per kilogram. The objective here is to see how farm income would be affected if the subsidy is transferred from consumption to production through a price increase. With a transformation rate of paddy of rice of 60 percent this subsidy at the primary supply would be FCFA 24, thus a price of FCFA 84/kg is used. Actually this hypothesis is the same as increasing the present producer's price by 40 percent. 173 The results are shown in Tables 6-8 and 6-9 for both types of equipment. The impact of price increase on the net present value can also be obtained using the following formula: 8 P - P AA Y 5 (P - P ) AA Y Ap NPV = ”:1 ( 2 (1 1)1)"u u + ":1 2 (1 1 1o): 5 Ap NPV = increase in net present value P2 = FCFA 84 P1 = FCFA 60 AAu = change in cultivated area for upland rice AAS = change in cultivated area for swamp rice Yu = yield of upland rice YS = yield of swamp rice i = discount rate (it was set at 8 percent) The loss in the case of animal traction decreases by one percent only. Thus increasing the price of rice does not have any impact on the attractiveness of animal traction. This is due to the fact that the price increase does not offset the yield effect. The price increase however, makes investing in tractor more attractive as the net present value increases by 44.9 percent. 6.4 Subsidizing Rice Production One of the major problems faced by rice farmers is how to afford the improved package of rice during the planting season. The animal traction and tractor users up to now have been able to solve that problem as CIDT has always been willing to provide them with that package through credit. 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Irrigated rice farmers receive the package free also. The objective in this section is to see how extending the free package to the upland and swamp rice farmers would affect the re- turns to their investment in farm equipment. The input subsidy is FCFA 27,l50/ha which is the current price of the package. The results for both cases are given by Tables 6-10 and 6-ll. The net present value in this case increases by 26.9 percent for tractor. The impact of subsidizing rice on the incremental income of investing in tractor is lower than that of increasing the price of rice. But the financial loss in the case of animal traction is lower than that of in- creasing the price of rice. This is due to the fact that the impact of the subsidy is not related to the yield effect (negative) as it is for the price increase. 6.5 Summary The objectives in this chapter were to do a financial analysis of investing in farm equipment, more specifically in animal traction and tractor. 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Thus unless hectarage increases more than assumed in the model,investing in animal traction is not profitable. CHAPTER 7 A LINEAR PROGRAMMING ANALYSIS OF RICE PRODUCTION UNDER THE CURRENT CONDITIONS 7.l Methodology 7.l.l Choice of Analytical Tool One of the major findings of Chapter 5 was that rice is one of the most profitable crops in Northwestern Ivory Coast using both the gross margin per ha and the gross margin per unit labor criteria. But in spite of this result specialization in rice production is not a re- commendable strategy at the present level of agricultural development in Northwestern Ivory Coast. Furthermore the farmers think more in terms of total farm income than returns to individual craps. Diversification is even used as a risk management strategy. Thus maximizing farm income raises several questions: (l) how does rice fit into the farming system, given the prevailing conditions? (2) what importance should be given to it? (3) how relevant are the constraints of price, credit, extension service, etc., listed in Chapter 3? and (4) what impact would removing these constraints have on farm income and enterprise combination? The objective in this chapter is to attempt to see how rice fits into the farming system and what importance should be given to its culti- vation in Northwestern Ivory Coast assuming that maximizing total farm income is the objective function of the farmers. The analysis of the constraints and the impact of their removal on rice production and farm income will be considered in the next chapter. The most commonly used 180 181 approach to handle questions of this nature is the whole-farm planning method. Here the whole-farm linear programming technique is used. 7.l.2 The Use of Linear Programming in Africa Since the pioneering work of Clayton (l96l), who used linear pro- gramming to study the constraints on profitability of a typical farm in Kenya, many authors have used this technique to address farm management issues in Africa. A review of most of these works is contained in Eicher and Baker (l982). The most important application areas studied are: (l) identification of constraints in small holding farming; (2) deriva- tion of normative supply and input demand functions; (3) estimation of frontier production functions on the basis of cross-sectional data; and (4) evaluation of profitability of new technologies. But these studies still have some unsolved issues. The first is the theoretical controversy with regard to the definition of an objective function. The question is whether or not profit maximization is a rele- vant objective in semi-subsistence or transitional agriculture. According to Schultz (l964), through "trial and error" an equilibrium condition or an efficient resource allocation equilibrium is reached by . farmers. The "economic man in Africa" idea or the concept of the effi- cient and rational farmer is also backed by Jones (l960) citing numerous cases in Africa. Hopper (l965), Yotopoulos (1967), and Behrman (1968) support the Schultzian "poor but efficient" view. But other economists,. Bocke (l953) and Samuelson (l970) in particular, discard the relevance of the profit maximization hypothesis in traditional agriculture because of the importance of noneconomic institutional factors in subsistence agriculture. 182 Other models of behavioral motivations have been advanced such as utility maximization and the safety-first principle. But these alterna- tives raise problems of their own. The utility maximization hypothesis, for example, raises a common denominator issue when utility derived from different sources has to be aggregated. The profit maximization hypothe- sis has been altered in some cases by implicitly incorporating food pro- duction constraints in the models. The second problem with the use of linear programming in the African farming context is the difficulty of extrapolating results, because of the heterogeneity of the farming systems. The third is the uneasiness to handle the within-farm, and within-year flows. Crawford, in his study in Northern Nigeria (l982) attempts to tackle the latter issue through polyperiod programming. To these shortcomings in the specific case of semi-subsistence agri- culture there are additional problems inherent to the nature of linear programming models which sould be mentioned. These weaknesses are linked to the following assumptions: (1) additivity and linearity of activities; (2) divisibility of activities and resources; (3) homogeneity of inputs and outputs; and (4) single-valued expectations. Because of these assump- tions, activities with decreasing costs and the formulation of price ex- pectations cannot be handled. It is also certain that additivity and linearity do not prevail very often in the real farm situation. Because of these unsolved issues the application of linear program- ming techniques for policy analysis requires considerable care. It re- mains a relevant tool of analysis, despite its limitations, especially in cases where there is no available alternative. 183 7.2 The Model 7.2.l Algebraic Formulation Max Z = f(X) = C'X subject to X :_0 AX :_S where Z is the objective function to be optimized C' = m x l vector of gross returns and prices X = n x l vector of activity levels A = m x n matrix of input-output coefficients S = m x l vector of resource constraints 7.2.2 (Constraints The objective function is maximized subject to a set of constraints varying in number with the specific assumptions of the case to be analyzed. Some constraints are relevant for all the models to be run. Among those are: l. £399. There is a constraint on the two types of land used in the_farming system, i.e., swampland and upland. 2. Family labor. There is a labor constraint for each of the 2l periods defined over the year. January, February and March, the least important months in terms of farming, have one period while the other months are split into two equal periods. 3. Hired labor. Three constraints are put on hired labor. These constraints cover January-April, May-August and September-December. 4. Qperatjgg capital. That is used to express the cash constraint faced by farmers, during the growing season. 184 Two other types of constraints are used in some model runs. The first is a set of food production constraints which force the model to produce a certain amount of important food commodities such as rice, corn, sorghum, millet, yam and groundnuts. The rationale for the set of food constraints is that farmers in the study area do not rely on the market for the supply of their staple food. It is usually produced by the compound. Thus, although the purpose of using the LP model is to maximize net farm income it is realistic to incorporate other important compound objectives. The real problem, however, is to specify correct levels of production which do not alter the value of the model. The second constraint is on capital borrowing. A ceiling is set at 30 per- cent of his past income. 7.2.3 Formulation of the Activity Set Thirty-three activities are defined in the models. First, there are nine crop production activities, including the following crops: (a) swamp rice; (b) upland rice; (c) corn; (d) cotton; (e) yam; (f) sorghum; (g) millet; (h) fonio; and (i) groundnuts. Except for cotton and swamp rice, all the other activities refer to crops in mixture with the listed crops as major crops. Second, because of the tendency of some of the farmers to buy rice to meet home consumption requirements one rice buying activity is included. Third, borrowing and consequently a repayment activity are also incorporated. Fourth, there are twenty-one labor hiring activities, one for each of the defined production periods. There is no labor selling activity as the labor supply in the model is restricted to labor available for on-farm use. 185 7.2.4 Estimation of the Coefficients The simplest way of constructing a representative farm is to take the average coefficients computed from the 69 farms in the study. Al- though that method has a statistical basis, it introduces aggregation bias, smoothes the pattern of monthly resource use particularly for labor, and may not represent a typical farm. For this reason, averages were not used. Instead, a particular farm was selected, one for manual and one for tractor use, each containing characteristics regarded as representative of farms of that type. Although this method was somewhat more subjective, it was preferred to using the average because it was felt that representative actual farms would allow a more accurate analysis of the impact of production constraints. All the input-output coefficients were the actual coeffi- cients of the specific farm selected from the sample, with two exceptions. The first exception involved the value of the objective function coefficients when a change in technology was introduced. In that case, the coefficients used were the average gross margins computed for survey farmers using that technique. In the case of manual cultivation, for example, since the selected farm did not use the improved package, when running the model for improved package use the average gross margin for those who used it was plugged into the model after making a correction for labor input during fertilizer application and harvest time. The second was the introduction of an interest rate on capital bor- rowing. Since the selected farm had not borrowed any capital, there was no interest rate available from the survey data. The ongoing rate at the commercial banks (l5 percent) during the survey was used. 186 7.2.5 Estimation of the Right Hand Side Values The land constraints were set by slightly increasing the actual lands cultivated by the selected compounds. Actually for upland the constraint was somewhat subjective as there was no real physical con- straint on its availability. In the case of labor, the actual labor supplied by the compound during the period was entered rather than esti- mates of the potential labor availability in the compound since no re- cord of other labor uses was available to see whether household labor was idle during some periods. Constraints were also put on labor hiring during the three periods January-April, May-August, and September-December. The actual amounts of hired labor were used. The food constraints were set using the per capita consumption estimated by the Ministry of Finance, (1976) and the number of consumer equivalents in the selected compound computed with slightly modified coefficients of the standard FAO table (Table 7-l). TABLE 7-l. Standard FAO Table to Compute Consumer Equivalence Sex/Age 0-4 5-9 lO-lS l6+ Male .2 .5 .75 l Female .2 .5 .7 .75 Source: FAO. According to the FAO these coefficients are intended to reflect the standard calorie requirements of each age and sex group. 187 The alteration in coefficients was for members below 10 years as the FMDCAS package does not make a distinction between those below four and the others. Thus .5 was used for all the members below l0. The numbers of consumer-equivalent may be slightly overestimated. The structure of the compounds for both manual cultivation and tractor use are given in Tables 7-2 and 7-3 respectively. They were obtained from the labor profile file of the FMDCAS package. TABLE 7-2. Structure of the Selected Compound for Manual Cultivation Sex/Age LesfioTha" 10-15 l6+ Male 3 l 2 Female 4 - 4 Source: Survey data. TABLE 7-3. Structure of the Selected Compound for Tractor ' Sex/Age LesioTha" 10-15 16+ Male 2 2 4 Female 2 3 5 Source: Survey data. n m CE = 2 z NiA. i j 3 CE = consumer equivalent N. = number of members of a given sex and age 1 188 Aj = weight coefficient for a given sex and age The number of consumer-equivalents are 9.3 and l3.2 for manual cultivation and animal traction respectively. The minimum requirements were computed as: (I) ll CE x Pk k minimum production requirement for crop k (k = rice, millet, sorghum, corn, yam , groundnuts) (I) ll '0 ll k per capita consumption of crop k Tables 7-4 and 7-5 respectively give the per capita consumption by crops (Pk) and the minimum production requirement (Sk) for both manual cultivation and tractor use. TABLE 7-4. Estimated Per Capita Consumption (kg) Rice . ~ 55 Corn 54 Millet l0 Sorghum 27 Yams l72 Groundnuts l3 Source: Ministry of Finance, Halles and Marches de Cote D'Ivoire 1975 . 189 TABLE 7-5. Estimated Production Constraints for Manual Cultivation and Tractor Use (kg) Cross--Technique of Production Manual Tractor Rice 511 731 Corn 502 718 Millet 93 l33 Sorghum 25l 359 Yams 1,600 2,288 Groundnuts lZl . l73 Source: Computed from Tables 7-l, 7-2, 7-3 and 7-4. The cash constraint was derived subjectively assuming that the com- pound has a constant cropping pattern and cultivated area over a few years and that 25 percent of total income is reinvested the following year in seed, fertilizer and hired labor and other operating expenses. Thus, the cash constraint represents 25 percent of the net farm income of the selected compounds. The net farm income was computed using the FMDCAS package. The constraint on borrowing was set at approximately 30 percent of the earnings of the farms chosen. This was a subjective number and the real ceiling of the extension service would have been more relevant. But since the ceiling was above the requirement of farms of this size and the admission was very selective, a lower ceiling was thought to be more realistic. The right hand side values are summarized in Table 7-6. 190 TABLE 7-6. Right Hand Side Values Used in the Models Row Resggsces Manual Tractor sze "“"b.' Constraints Cultivation Use Constraintsa Land (hectare) 1 SHLANO 7 3 s 1 2 UPLAND 4 6 1 Compound Labor (holiday) 3 LAB 1 14 18 1 4 LAB 2 16 24 1 5 LAB 3 19 48 1 6 LAB 4 26 51 1 7 LAB 5 40 58 1 8 LAB 6 36 52 l 9 LAB 7 44 53 1 10 LAB 8 42 57 1 11 LAB 9 52 53 1 12 LAB 10 44 56 1 13 LAB 11 39 56 1 14 LAB 12 27 47 1 15 LAB 13 32 51 1 16 LAB 14 29 43 1 17 LAB 15 34 51 1 18 LAB 16 44 49 1 19 LAB 17 38 54 1 20 LAB 18 4 36 52 1 21 LAB 19 17 31 1 22 LAB 20 19 ' 27 1 23 LAB 21 12 26 1 Cash and Borrowing (FCFA) . 24 808C 0 0 2 25 REPC 0 0 2 26 CASH 87.000 15.260 1 27 MAXBC 100.000 203.800 1 Hired Labor (manday) 28 HIRLAB 1 6 13 1 29 HIRLAB 2 27 44 1 3O HIRLAB 3 16 24 1 Production Constraints (kg) 31 RICE 511 731 3 32 CORN 502 718 3 33 YAM 1 .600 _ 2.288 3 34 SORGHUM 251 359 3 35 MILLET 93 133 3 36 GROUNDNUTS 121 173 3 “NH 446 lvaln 191 7.3 Model Results--Manual Cultivation The results of the model for manual cultivation are shown in Tables 7-7 and 8-3. 7.3.l Enterprise Combination The first noticeable feature in terms of enterprise combination is the absence of fonio from the optimum plan. Millet also is not in solu- tion when the food constraint is removed. The cost of forcing in a hec- tare of fonio production was FCFA l9.40l. Hectarages of cotton, yam and sorghum were close to the actual areas grown. 7.3.2 Hectarage of Rice Cultivated area for rice was 45.7 percent higher in the optimum solution than in the actual plan. The increase in area for rice, parti- cularly that of upland rice, was acquired at the expense of corn, ground- nuts and fonio production. 7.3.3 Marginal Value Product of Resources (MCP) The marginal value product for both upland and swampland are posi- tive whether or not there are food constraints (Table 7-8). The value for swampland in the case with food constraints is FCFA 84,422. That means that an additional income of that amount would be generated by another hectare of that land. The second implication is that both lands are constraints. Compound labor for some of the periods such as May, June, and part of September, October and November also have a positive marginal value product. Thus labor is a constraint during these periods in the case with food constraints. During the period September-December all the hired labor available for both cases is depleted. Consequently 192 TABLE 7-7. Optimum Enterprise Combination: Basic Model. Manual Cultivation (ha) Model Model Cro Aztggl Result Result p Grown Without Food With Food Constraint Constraint Swamp rice .63 .70 .70 Upland rice .88 2.12 1.5 Corn .44 .19 .18 Cotton 1.03 1.06 1.12 Yam .42 .38 .43 Sorghum .31 - .43 Millet .21 - .11 Fonio .27 - - Groundnut . .36 .24 .17. Value of the Objective Function (gross farm income, 1980) 296,240 356,522 351,072 Source: Survey data. 193 TABLE 7-8. Marginal Value Product of Resources: Manual Cultivation (FCFA) Model Model Row Number Resgggces . Result .Result Constraints Without Food Wlth Food Constraints Constraints 1 SWLAND 82990.2 84422.3 2 UPLAND 40232.3 46280.9 3 LAB 1 0 0 4 LAB 2 0 0 5 LAB 3 O 0 6 LAB 4 O O 7 LAB 5 O O 8 LAB 6 410.1 321.2 9 LAB 7 0 243.4 10 LAB 8 541.3 533.1 11 LAB 9 47.2 473.2 12 LAB 10 O O 13 LAB 11 221.3 0 14 LAB 12 O 0 15 LAB 13 O O 16 LAB 14 - 0 436.2 17 ' LAB 15 O 0 18 LAB 16 226.4 134.2 19 LAB l7 0 O 20 LAB 18 0 200.9 21 LAB 19 0 0 22 LAB 20 O O 23 LAB 21 - O 24 BORC - - 25 REPC - - 26 CASH .54 .50 27 MAXBC - - 28 HIRLAB l O O 29 HIRLAB 2 O O 30 HIRLAB 3 1278.5 1798.2 31 RICE - O 32 CORN - -7.8 33 YAM - O 34 SORGHUM - -lO.2 35 MILLET - -33.2 36 GROUNDNUTS - -lO.3 Source: Survey data. 194 hired labor for that period has a positive shadow price. Cash available‘ also becomes a constraint as it is completely depleted. With regard to the minimum food production constraints, groundnuts, millet. sorghum and corn have a negative shadow price. That means that the quantity produced in each case is exactly equal to the minimum required. Yam and rice with a quantity produced above the minimum required have a marginal value product equal zero. Thus the minimum requirements for yam and rice are not constraints for the model. 7.3.4 Farm Income Farm income increases over the actual play by 20.3 percent in the case without constraints and 18.5 percent with constraints. The differ- ence in the incremental incomes is due to the fact that in the second case resources have to be used to produce less profitable crops such as sorghum and millet at the expense of upland rice. 7.4 Model Results--Tractor Use Unlike the case of manual cultivation there was no farmer using tractor service on both swamp and upland rice without having used the improved package on either of them. The selected farmers got the pack- age on credit. But in the basic model here it is assumed that credit was not available to the farmer and he bought the improved package cash. The rationale for doing so is that most of the farmers did not have access to credit. The results are given in Table 7-9. 7.4.1 Enterprise Combination Facing a difficult set of financial constraints, the enterprise combination is different as expected. Less land is allocated to the cash TABLE 7-9. Basic Model: 195 Optimum Enterprise Combination Tractor Use (ha) Actual Model Model Crops Combination Result Result by the Without Food With Food Farm Constraints Constraints Swamp rice 2.84 3.39 2.41 Upland rice 2.02 - - Corn .67 .67 1.14 Cotton .83 2.01 1.96 Yam .44 - .36 Sorghum .53 1.31 .81 Millet .51 1.85 1.45 Fonio .47 — - Groundnut .41 .15 .24 Value of the objective function (net farm income FCFA) 544,860 591,337 548,752 Source: Survey data. 196 crops, rice and cotton, which are more capital intensive. The capital constraint forces the model to allocate more land and labor to corn and millet which are not costly in terms of capital. relative to upland rice which like sorghum is not in the optimum solution. 7.4.2 Hectarage of Rice Without credit, the cultivated area under rice is reduced by 51 per- cent. Upland production is not feasible and the cost of bringing one hectare of it into solution is FCFA 48,548. The reduction in hectarage is less (30 percent) under the case without food constraints. It would require more capital than is available to produce the area of rice in the actual plan without credit. The capital constraint at the farm level for rice production using tractor and the improved package is underlined by the model. 7.4.3 Marginal Value Product of Resources Unlike the case of manual cultivation, the marginal value product~ of swampland is zero as some of it remains idle in the optimum plan. Upland land is exhausted and has a positive marginal value product (FCFA 24,048). This is also true for capital (FCFA 1.55) and for labor in some of the periods. In fact a total of 39 man-days has to be hired during seven periods (Table 7-10). 7.4.4 Farm Income The comparison of farm income is meaningless as the selected farmer operated under different conditions particularly with credit. It is however, important to notice that farm income in the optimum solution 197 TABLE 7-10. Marginal Value Product of Resources: Tractor Model Model Row Number Resgggces . Result 865"]t Constraints Without Food With Food Constraints Constraints 1 SWLAND 0 O 2 UPLAND 3153.0 2157.0 3 LAB 1 O O 4 LAB 2 O 0 5 LAB 3 0 O 6 LAB 4 O 0 7 LAB 5 431.6 721.8 8 LAB 6 O O 9 LAB 7 610.2 406.9 10 LAB 8 O 0 11 LAB 9 0 O 12 LAB 10 0 721.8 13 LAB 11 O 0 14 LAB 12 0 0 15 LAB l3 0 O 16 LAB 14 431.6 278.5 17 LAB 15 0 O 18 LAB 16 O O 19 LAB l7 0 O 20 LAB 18 - - 21 LAB 19 - - 22 LAB 20 1460.1 1309.6 23 LAB 21 1460.1 1309.6 24 BORCa - - 25 REPC - - 26 CASH 2.1 1.8 27 MAXBC - - 28 HIRLAB l O O 29 HIRLAB 2 O O 30 HIRLAB 3 0 O 31 RICE - 0 32 CORN - 0 33 YAM - -21.6 34 SORGHUM - O 35 MILLET - O 36 GROUNDNUTS - -4.6 Source: Survey data. aValue since borrowing is not introduced in the model yet. 198 without credit is higher than in the actual plan. The difference is more significant in the case without food constraints. 7.5 Summary The major findings in this chapter are as follows. First, as ex- pected net farm income, in both cases, is higher than that of the actual plan. Second, compound labor becomes a constraint to expand production during some periods. Third, rice cultivation is less important in the actual plan of the farm than in the model. In order to increase farm income more upland should be under rice cultivation whether or not the farm has to produce its own staple food. Thus given the prevailing con- ditions rice is a profitable crop in terms of maximizing net farm income under manual cultivation. Fourth, for tractor users, unless credit is provided upland rice is not profitable, producing it cuts down net farm income because of its cash requirement which limits total cultivated area. Under that condition farm income can be improved by shifting re- sources to cotton and to less important crops in terms of gross margins/ man-day such as corn, sorghum and millet. CHAPTER 8 A LINEAR PROGRAMMING ANALYSIS OF RICE PRODUCTION UNDER ALTERNATIVE POLICIES The principal constraints to rice production were listed in Chapter 3. Price of rice, and access of farmers to improved inputs and credit, are two of these constraints. They are partially induced by the insti- tutional organization and policies of the agricultural sector. Thus they can be removed or relaxed through institutional and policy changes. The objective in this chapter is to see how hectarages of rice and farm income in the basic optimum solution (Chapter 7) change under alter- native incentives introduced through policy change. Three sets of in- centives are examined: (1) increasing the price of rice; (2) improving the extension service and the credit system to make the improved package available to the farmers; and (3) subsidizing rice production by making the improved package available free of charge to farmers. The chapter is organized in four sections. The three policies are analyzed separately in three subsequent sections. The last section is a comparison and evaluation of the policies. 8.1 Increasing the Price of Rice 8.1.1 The Price Levels Three levels of price increase are analyzed. The first is based on the transfer of the consumer's price subsidy to the producers. This raises the producer's price from FCFA 60/kg to FCFA 84/kg. It is the 199 200 same price assumption made in Chapter 6. The second and third levels are a 20 percent and a 25 percent increase in the present price. The price levels are respectively FCFA 72/kg and FCFA 75/kg. The first level is closer to the current price in the traditional market whereas the second and third are still below that price. Some of the impacts of the increase in the price of rice are shown in Figure 8-1. Sp represents the primary supply (supply of paddy rice) while Sd represents the derived supply (supply of milled rice). 0p and 0d represent the primary demand (demand for rice) and derived demand (demand for paddy) respectively. The increase in producer price is ex- pected to: 1. Increase cultivated area of rice, thus an increase in supply of both paddy rice and milled rice. This increase is depicted in the primary supply curve by an upward movement from point A to point 0. Thus supply of rice increases by the amount OG2 - 061. 2. Increase in producers' income. The increase in producer income is represented by Pp] sz DB + area GlABGZ. If consumer price is in— creased by the same amount as producer price then the amount represented by area Pp] sz DB would be a transfer from consumers to producers. If the price of milled rice is maintained at Pc1 then this amount would be borne by the government as an additional subsidy to consumers. 3. Induce saving of foreign exchange as less rice would be imported because of the increase in domestic production. Assuming that no rice is imported until all domestically produced rice is consumed the amount of foreign exchange saved would be equal to (PczH - PcZG) times the price 201 Price I} of Ricei C2 C1 P2 P1 ~—€> 2 Quantity of Rice FIGURE 8-1 Increasing Producer's Price of Rice 202 of imported rice (decrease in demand) plus (PcZI - PczH) times the price of imported rice net of the additional foreign exchange use in- duced by the increase in production. The distribution of the gain from the price policy would be a func- tion of the distribution of the marketed surplus among farmers. Farmers who can increase their marketed surplus through an increase in either hectarage of rice or yield of rice would benefit more from the policy. It is likely that the wealthier farmers who face less production con- straints would gain more. Thus the distribution of the gain from the price policy would be a function of the prevailing distribution of in- come before the implementation of the policy. 8.1.2 Empirical Results--Manua1 Cultivation Description of the runs: MANBASIC. Basic mode1--no use of improved package MANPRICE 1 Use of improved package, no change in the price of rice MANPRICE 2 Same as MANPRICE but 20 percent increase in the price of rice MANPRICE 3 Same as MANPRICE l but price of rice increased by 25 percent MANPRICE 4 Same as MANPRICE l but price of rice = FCFA 84 8.1.2.1 Enterprise Combination The introduction of the improved package of rice without credit in- duces a change in the enterprise combination. Cotton and sorghum produc- tion increases whereas that of upland rice, corn and yam decreases, in the case with food constraints. Rice and yam are capital intensive; 203 that may explain the decrease in their production. Corn production de- creases in order to free resources for sorghum and groundnut production (Table 8-1). 8.1.2.2 Hectarage of Rice Hectarage of rice decreases whether or not constraints are put on food production. It decreases by 50 percent in the case with food con- straints. The decrease in the hectarage of rice stems from the fact that only a limited amount of the improved package is affordable during planting season because of the limited disposable capital. Thus capital is a constraint to responding to the price incentive. Area under upland rice cultivation, thus the supply function is constant over the price range considered. There is no upward movement on the primary supply curve. Production of upland rice would change only if the price of rice is set at FCFA 86/kg; that is equivalent to a 43.3 percent increase in the ongoing price. 8.1.2.3 Marginal Value Product of Resources (MVP) The MVP of both types of land and capital are positive since these are fully used. Labors in August and November and hired labor have a zero MVP as surpluses are available after the optimum solution. But June and July, the peak periods of the year, have a positive marginal value product. Labor has to be hired during these periods. 8.1.2.4 Farm Income Farm income decreases by 3.1 percent when the improved package is introduced at the current price (MANPRICE l). The level of income in- creases as Fnjce of rice is raised, although the enterprise combination 204 .mumv xu>c=m ”mocaom momwmm owmoum Nmmmom ommcem Nuopmm memome onceoe Nemmmm owppmm Nummmm A NF. NF. NP. up. up. i i i . em. uacvcaocw . i i i i i u i . owcom . i u . PF. . i i . pop—w: m~._ mn.~ m~.P mN._ me. i - - i Eacmcom «N. «m. cm. em. me. i i - mo. mm. Em> mm.p mm._ mm._ mm._ NF._ mm.F mm.p mm._ mm.. oo.p :opyoo mo. mo. mo. mo. mp. em.p em.” em.p N~._ mp. ccou cc. we. we. we. m.P ~_.~ P_.~ PF.F mm. NF.N mow; van—a: cm. on. 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The enterprise combination can be easily altered by the choice of the crop to be subsidized. 8.3.3.3 Marginal Value Product The marginal value product of resources and costs of forcing crops into the nonoptimum solution present the same patterns as in the case of manual cultivation, even if the MVP and the costs are different. 8.3.3.4 Farm Income When no crop is subsidized (TRACTSUB l) farm income falls due to capital constraints on producing the most profitable but capital inten- sive crops (upland rice and cotton). Farm income increases under any of the other alternatives. As in the case of manual cultivation the highest income is achieved under TRACTSUB 5 (42.1 percent). The subsidy on rice has a positive impact on both cultivated area of rice and farm income. 8.4 Comparison and Evaluation of the Policies Subsidizing rice inputs seems to have more impact on both production of rice and farm income. The minimum increase in farm income under that 223 policy is 24.2 percent (MANSUB 2) when hectarage of rice is increased by 47.3 percent. The impact of that policy on tractor cultivation is higher (TRACTSUB 2). But this policy seems costly for several reasons. First, it leads to a specialization in rice production as cotton production becomes very limited. Cash income at the farm level may be more subject to risk under these conditions. Second, it is very expensive relative to the other policies and it dries out one of the sources of financing agricultural development: cotton production. The cotton program is self- financing, because the subsidy paid by the government to the farmers is financed by the benefit realized on cotton production by the Marketing Board. The subsidy on cotton can be perceived somewhat as a credit on input during planting season. The subsidy on rice does not have that characteristic; it is a pure transfer of income. Third, one part of the benefit on cotton is used to finance other agricultural programs. Thus eliminating cotton production would affect other agricultural pro- grams. There may not even be funds available to subsidize rice produc- tion.) The economic return of rice would still be high under these condi- tions but lower than the financial return. Fourth, cotton is at the center of the extension program of CIDT. Thus it is unrealistic to think that CIDT would be willing to implement a program which would ham- per its own program, unless it benefits from rice production. Fifth, the subsidy would introduce another distortion in resource allocation. The subsidy policy has some of the present shortcomings of the cotton program such as the lacking incentive for the farmers to use the package rationally and efficiently (it would be of no cost to them), diversion of fertilizer to other crops and use of more amounts of fertilizer than needed in some cases. 224 The analysis done here is not sufficient to make a sound evaluation of the subsidy policy. From the results of chapters 4 and 5 it is evident that rice is economically more profitable than cotton. Thus in terms of efficiency in resource use rice production is more adviseable than cotton production. However the analysis is still limited as it does not address the employment generation, income distribution and the balance of pay- ments issues of both products. Thus recommending the shift of the in- put subsidy from cotton to rice in order to increase rice production would at this level of analysis be a nonscientifically backed decision, as the level of knowledge is not sufficient. The price incentive does not lead to an increase in rice production as it does not solve the capital constraint. That policy has an equity implication as either Consumers have to bear its cost through a price increase or the government has to bear the burden of a higher marketing margin (increase in the subsidy to the consumers). Given the prevailing economic conditions both alternatives of bearing the cost seem hardly feasible as increasing consumer price may lead to social unrest and the government is likely unable to bear an important additional cost. The credit policy seems more rational and more politically accep- aole as it seems more equitable and introduces less distortions in resource allocation. It however implies some costs for the public sector. These costs are made of two components: the costs of administrating the credit program which may be higher than those of the other policies and defaults in loan repayment. Both types of costs would depend on policy design and implementation. But farm income in the case of manual cultivation increases significantly only fOr MANCREDIT 1 (credit for rice--subsidy 225 on cotton) and MANCREDIT 5 (credit for both rice and cotton but price of cotton FCFA 165/kg). Although hectarage of rice does not increase sig- nificantly under MANCREDIT 1 (4.5) that option is the only feasible one. Setting the price of cotton at FCFA 165/kg is actually giving a real or a higher subsidy to the farmers. The price is too high and is more than double the cotton price received by farmers in the other countries of the region. Providing credit for rice and keeping the subsidy on cotton is the only feasible policy option, in spite of the costs of administrating the credit program. Actually production of rice under manual cultiva- tion increases more than expressed by the hectarage increase as it allows farmers to shift from the traditional package to the more produc- tive package (Table 8-7). Furthermore part of the cost of the program would be borne by the farmers (interest on borrowed capital). A Given the prevailing conditions (lack of labor and capital and the need for farmers to produce other crops) the real strategy to increase rice production may lie in a combination of credit and research. The productivity of labor should be increased through higher yields. In- creasing the hectarage of rice under manual cultivation can only be done at the expense of other crops. Table 8-8 shows how farm income and cultivated area of rice vary with three levels of increase in yield. These levels are 10, 20 and 30 percent. The results are respectively yield 1, yield 2 and yield 3. Hectarage of rice and farm income are more sensitive to increase in yield in the case of tractor cultivation. But even when there is no 226 TABLE 8-7. Summary of Impacts of the Different Policies on Area of Rice and Farm Income Percent of Percent of Policy Run Change in Change in Area of Rice Farm Income Output pricing MANPRICE l - 48.2 - 3.1 MANPRICE 2 - 48.2 + 5.2 MANPRICE 3 - 48.2 + 7.3 MANPRICE 4 - 48.2 +13.4 TRACTPRICE 2 + 6.6 +12.7 TRACTPRICE 3 + 6.6 +16.0 TRACTPRICE 4 + 11.2 +26.2 Credit MANCREDIT l + 4.5 + 4.9 MANCREDIT 2 + 42.7 - 7.8 MANCREDIT 3 + 5.9 - 1.5 MANCREDIT 4 + 5.9 + 2.6 MANCREDIT 5 + 5.9 +15.8 TRACTCREDIT l + 79.2 +10.2 TRACTCREDIT 2 +136.1 + 4.2 TRACTCREDIT 3 + 68.0 + 6.8 TRACTCREDIT 4 + 79.2 + 8.2 TRACTCREDIT 5 + 58.9 +18.9 Input subsidy MANSUB l + 47.3 - 2.9 MANSUB 2 + 47.3 +24.2 MANSUB 3 45.4 +24.4 MANSUB 4 45.4 +25.2 MANSUB 5 45.4 +28.6 TRACTSUB l + 17.8 -l4.5 TRACTSUB 2 +157.3 +38.2 TRACTSUB 3 +157.3 +38.2 TRACTSUB 4 +157.3 +38.2 TRACTSUB 5 +114.l +42.l Source: Models results. 227 .Napzmoc Noooz Noogzom N.NN «.ou o N.NN o o omocopooz-ooNc NNNON NN NNNNNN N N.NN N.NN o.m + m.m~+ m.mN+ «.w+ osoocN :N omcozu a NNNNNN NNN«N« NNNNNN NNN«NN NNNNN« NNNNN« NNNNNN N««NNN NNNNNN ELNN NN.N «N. 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