Do Domestic Food Producers In Food Deficit Countries Benefit From International Trade? Evidence From Rice Markets In Five West African Countries

Motivated by the negative impact of the 2006-2008 food crises on rice consumer prices and welfare, the impact of international trade on producer prices of rice in food deficit countries was examined using data collected from five randomly selected West African countries and analyzed with econometric GARCH estimation procedure. The finding shows that domestic rice producers in food deficit countries benefit from international prices in countries where market liberalization is not significantly associated with instability in domestic producer prices. Further evidence leads to the conclusion that: urbanization results into preference for imported rice and low producer prices in some areas; market information system, market access infrastructure and integration of domestic markets with regional and global types are poorly developed; official development assistance (ODA) is an important policy tool for development of rice sector in these areas; and that policy efforts in these countries at controlling producer price volatility during the 2006-2008 food crises were largely effective. The study suggests that in order to ensure a competitive domestic rice market, curb producer price volatility and benefit from international trade, a concomitant heavy public investment in agriculture, development of market access infrastructure, market information system as well as market integration are necessary policy actions in these countries.