Wheat consumption in sub-Saharan Africa: Trends, drivers, and implications for food security and...
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Transcript of Wheat consumption in sub-Saharan Africa: Trends, drivers, and implications for food security and...
Wheat consumption in sub-Saharan Africa: Trends, drivers, and implications for food security and policy
Nicole M. Mason, T.S. Jayne, & Bekele Shiferaw Michigan State University & CIMMYT Addis Ababa, Ethiopia 8 October 2012
0
5
10
15
20
25
30
35
40
45
Per
ca
pit
a co
nsu
mp
tio
n (
kg)
Wheat Maize Rice (milled equivalent)
Wheat consumption in SSA rapidly
2000-09: 650,000 MT/year (4.2%)
Source: FAOSTAT Commodity & Population databases
Per capita consumption, SSA
-20
-15
-10
-5
0
5
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Net
exp
ort
s (m
illio
n M
T)
Wheat Maize Rice (milled equivalent)
Growing structural deficit - 3 main staples
Source: FAOSTAT Trade database
dependence on imported staples +
world prices =
import bills
Net exports, SSA
Rising importance of wheat in SSA staple food diets possible dilemma
A major pathway for broad-based economic growth is structural transformation; key part is rural-urban synergies
BUT, urban consumers’ demand for wheat met mainly by imports or production from large-scale commercial farms (excl. Ethiopia)
– Minimal rural/urban synergies
OUTLINE
1. Introduction
2. Trends in net imports & food consumption – key differences across regions
3. Expenditures on wheat vs. other staples
4. What is driving rising demand for wheat?
5. Conclusions & policy implications
The “big 5”: 53% of wheat net imports
5 countries – most of SSA wheat imports (2000-09)
1. Nigeria (23.0%)
2. Sudan (10.7%)
3. Ethiopia (8.2%)
4. South Africa (6.6%)
5. Kenya (4.9%)
Source wheat mainly from US (34%), Argentina (15%), Australia (8%)
– Severe droughts, wheat prices
64% of total consumption
44% of population
25.6
21.4
19.0
7.8
0
5
10
15
20
25
30
Per
ca
pit
a w
hea
t co
nsu
mp
tio
n (
kg)
East
Southernexcl. RSAWest
Central
Sources: FAOSTAT Commodity Balances & Population databases
Per capita wheat consumption
Trends in wheat consumption
P.c. consumption except in South & North Africa
167.9
60.9
0
20
40
60
80
100
120
140
160
180
200
Per
cap
ita
wh
eat
co
nsu
mp
tio
n (
kg)
NorthAfrica
SouthAfrica
Sources: FAOSTAT Commodity Balances & Population databases
Per capita wheat consumption
Trends in wheat consumption
P.c. consumption except in South & North Africa
Supplies of main staple grains faster than population since early 1990s
P.c. wheat & rice consumption
Marginal , if any, in p.c. maize consumption ( in West Africa)
Good news for food security (availability)
– Wheat playing important role
0%
10%
20%
30%
40%
50%
60%
70%
1 2 3 4 5 Total
% o
f w
he
at +
mai
ze +
ric
e e
xpe
nd
itu
res
Consumption quintile
Wheat
Maize
Rice
Wheat becoming #1 staple in many places in SSA Lusaka, Zambia – 2007/08
Source: Mason & Jayne (2009)
0%
10%
20%
30%
40%
50%
60%
70%
1 2 3 4 5 Total
% o
f w
he
at +
mai
ze +
ric
e e
xpe
nd
itu
res
Consumption quintile
Wheat
Maize
Rice
Wheat becoming #1 staple in many places in SSA Lusaka, Zambia – 2007/08
Source: Mason & Jayne (2009)
Similar patterns: Kitwe, Zambia Nairobi, Kenya
Maputo, Mozambique
0%
10%
20%
30%
40%
50%
60%
70%
80%
Urban poor Urban non-poor
Rural poor Rural non-poor
% o
f w
he
at +
tef
f +
mai
ze +
so
rgh
um
ex
pen
dit
ure
s
Location/income group
Wheat
Teff
Maize
Sorghum
Wheat dominates (slightly) among rural non-poor in Ethiopia 2004/05
Source: Berhane et al. (2011)
Wheat expenditure shares in ESA: general patterns (excl. Ethiopia)
Non-poor > poor
Urban > rural
Potential drivers of rising wheat demand
1. wheat prices relative to other staples
2. incomes
3. Population growth
4. Urbanization
5. opportunity cost of time, esp. women
6. Food aid
0.35
0.40
0.45
0.50
0.55
0.60
0.65
0.70
0.75
0.80
Wo
rld
wh
ea
t/rice
price
ra
tio
1.0
1.1
1.2
1.3
1.4
1.5
1.6
Wo
rld
wh
ea
t/m
aiz
e p
rice
ra
tio
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
World wheat/maize World wheat/rice (right scale)
wheat prices relative to other staples?
Trends in price ratios – world & retail 9 countries
World price ratios
Source: IMF Primary Commodity Prices database
wheat prices relative to other staples?
Ratio of wheat price : other staple prices
Declining: Nigeria, Kenya, Mozambique, Cameroon
Rising: South Africa, Ethiopia, DRC, Zambia
No significant trend: Mauritania
Rising incomes?
p.c. GDP relative to retail wheat prices – 8 countries
400
600
800
1000
1200
1400
1600
1800
2000
2200
2400
Lo
ave
s o
f b
rea
d p
er
GD
P p
er
cap
ita
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Nigeria Zambia Kenya
Bread purchasing power
No significant trend in other 5 countries
Factors driving wheat consumption in SSA
Regression analysis
45 countries
1980-2009
Dependent variable: total wheat consumption
Zambia Daily Mail
Factors driving wheat consumption in SSA: key findings World prices: Not significant
GDP (income): US$1 million 1.9-4.8 MT (elasticity 0.09-0.22)
Total population: 1,000 people 30-50 MT – 670,000-1.12 million MT increase/year 2010-20
– 770,000-1.28 million MT increase/year 2020-30
Urbanization: Not significant
Ratio of female-to-male labor force participation: 1 percentage point 5,000-6,200 MT
Food aid (1-3 year ago): 1 MT lagged food aid 0.69 MT consumption
Conclusions & policy implications
1. SSA faces deepening staple food deficit
– Much of gap being filled by imported wheat
2. Wheat consumption in SSA rapidly
– population, incomes, women’s opp. cost of time
– Imported or large-scale commercial farms (excl. Ethiopia)
– Unlikely to generate rural-urban synergies or broad-based economic growth
Policy options for meeting domestic grain demand
A. Neutral – no tariffs, protection, taxes, etc. on imported staples
– Large imports of wheat/rice continue
– Pros
• Food prices capped at import parity
• Consumer sovereignty
– Cons
• Drain on foreign exchange
• Minimal rural/urban synergies
Policy options for meeting domestic grain demand B. Trade policy (tariffs, protection) to increase
relative price of imported staples – Goals
• Shift consumption toward domestically produced staples • incentives for domestic staple food production • rural/urban synergies
– Pros • IF supply AND demand domestic staples synergies • government revenue (tariffs)
– Cons • IF ONLY supply OR ONLY demand negative effects on net
sellers or net buyers • food bills for consumers of imported staples (non-poor) • consumer sovereignty
Policy options for meeting domestic grain demand C. Promote domestic production through non-
distortionary measures
– Rural infrastructure, irrigation, ag R&D, extension, market information
– Pros
• IF supply AND demand domestic staples synergies
• Investments promote agricultural growth & poverty reduction
• Consumer sovereignty
– Cons
• IF ONLY supply prices negative effects on net sellers (non-poor)
• Time lag
Policy options for meeting domestic grain demand D. Promote value addition/processing of staples
grown by smallholders to improve convenience – Key driver of wheat demand: opportunity cost of time
– prep time, convenience of coarse grains
– Blending domestic staples w/ wheat flour
– Pros • Potential for rural/urban synergies (incl. urban
employment?)
• Consumer sovereignty
– Cons • Consumer demand uncertain
• Investors willing to take risk?
Policy options for meeting domestic grain demand
Not mutually exclusive (or exhaustive)
Policymakers – identify objectives and weigh pros/cons for different types of HHs
Reuters/Barry Malone
Thank you! Questions?
Nicole Mason ([email protected])
Acknowledgements Funding support from USAID/Zambia & CIMMYT
Research assistance from Arthur Shipekesa (IAPRI)
Price data and information on wheat market conditions in various countries: Henry Akaeze, Antony Chapoto, Cynthia Donovan, Francis Karin, Marlene Labuschagne, Mary Mathenge, Asfaw Negassa, Sonja Perakis, Solomon Tembo, & Lulama Ndibongo Traub