A Study on Agricultural Production Policies in Senegal for Food Self-Sufficiency

Abstract

Senegalese agriculture relies mainly on seasonal production activities marked with low productivity. This contributes to high dependency on imports as far as food self-sufficiency is concerned. This dependency on cereal imports, primarily of rice, wheat and maize has increased gradually due to their low incentive to produce in comparison with cash crops (e.g., peanut and cotton), inappropriate policies and failures in improving agricultural productivity. Domestic agricultural production of cereals in Senegal covers approximately 40% of countrys demand. And it is characterized by a low level of fertilizer application and low accessibility of inputs such as seeds and fertilizer. Reflecting these obstacles, the dependency of rice and maize on imports in Senegal reaches up to 80% and 50%, respectively. Given the shortage of cereal production, a number of agricultural policies has been implemented to lessen countrys dependency rate on imports and to improve agricultural productivity in a sustainable fashion. For example, policies such as one targeting to regulate and strengthen agricultural institutes, building agricultural infrastructure, providing easy access to production factors (e.g., certified and improved seed, improved land, fertilizers) and stabilizing a producer price have been implemented. The Senegalese agriculture is well known for its over-provision of agricultural policies, which generates many problems including a lack of consistency, inadequacy and ineffectiveness of agricultural policies in Senegal. This contributes to high dependency of cereal production on imports, low productivity, and a small share of agriculture in GDP. The purpose of this dissertation is to investigate the current status of Senegalese agriculture with a focus on aforementioned agricultural productivity issues. This contributes to build up future prospects of Senegalese agriculture. To do this, main efforts are given to (i) investigating yield gap (current vs. potential), (ii) estimating factors affecting yield of rice and maize in Senegal River Valley area, (iii) testing market integration between rural and urban areas and (iv) providing policy tools for a potential international agricultural cooperation between Korea and Senegal. The findings from this research are summarized as follows: 1) At the country level, the gap between current and potential yield is estimated to be 49.75% and 79.75% for rice and maize production, respectively. But in Senegal River Valley, these yield gaps are found to be less severe

they are 37.9% and 58.8% respectively. These yield gaps are caused by many factors including biophysical, socio-economic and institutional factors. Among them, problems associated with harvest and post-harvest hindrances need to be addressed. And, as domestic financial support for loosening up these constraints is not easy because of a lack of financial capacity of government and farmers, one must look for financial support from overseas. Without funding from outside, many governmental agricultural projects targeting to boost up domestic agricultural production are under a danger of failure. 2) The stochastic production function estimates of rice and maize in Senegal River Valley demonstrate the possibility to reach self-sufficiency of rice in Senegal. Nonetheless, its fulfillment requires many accompanying measures in rice and maize production. These measures include all upstream and downstream activities related to agricultural production for their efficiency and sustainability in rice and maize production to maintain the countrys comparative advantages and competitiveness. Then priorities should be given to agricultural infrastructure building, establishment of credit markets, and providing an easy access of production factors (e.g., improved land, fertilizers, improved and certified seeds, as well as agricultural machines). Furthermore, policy makers should provide a larger incentive in terms of producer price to encourage farmers to increase considerably their outputs, thereby farmers face smaller risk of having non-sold outputs. And during an early harvesting period, appropriate policy measures are in need to prevent farmers from dumping their products under severe social and economic pressures such as children schooling and loan payment, etc.. 3) In the market sector, we found a weak correlation relationship between the Free On Board (FOB) price of rice and domestic price (i.e., import price + government subsidy + transportation costs) of rice (coefficient of correlation = 0.3189) as well as between FOB price of maize and domestic price of maize (coefficient of correlation = 0.4436). These results are due to subsidy policies on rice and Senegalese preference of local maize, respectively. In the area of Senegal River Valley, local prices of rice and maize are found to be highly correlated in Saint-Louis market, which is located in an urban area (a coefficient of correlation = 0.7025) and in Mpal market as well, which is located in a rural area (coefficient of correlation = 0.6852). This implies rice and maize are substitutes in Senegal. In addition, Granger-causality test results reveal that the causality direction is from urban area to rural area for the price of rice and from rural area to urban area for the price of maize. These results suggest that the amount of subsidy on rice imports needs to be redirected toward productivity and quality increase to shift the consumption of rice from imported rice to domestically produced rice. For maize, policy attention should be given to the increase of productivity of domestic maize given Senegalese preference for local maize. This effort would increase the supply of domestic maize with which the price of domestic maize in a rural market would decline. Given Granger-causality test results for maize

this would signal a downward pressure on the price of imported maize in an urban market where imported maize is mainly consumed in a livestock sector and agri-industry. 4) South Korea agriculture development is backed by many combined factors such as R&D, continual technological innovation as well as financial resources availability and accessibility. Nonetheless, land constraint handicaps Korea to fulfill its duty to satisfy the countrys domestic demand in many grains except rice. Then in order to achieve the objectives of self-sufficiency and food security, Korean government stipulated its willingness to support Korean investors to access to overseas arable lands which led to the creation of several international agricultural cooperation projects around the world. The establishment of such win-win cooperation between Korea and Senegal may develop and sustain Senegals agriculture through infrastructure building, training of agricultural agents and transfer of technology. This in turn helps solve food self-sufficiency problems of Senegal. In conclusion, the concept of improving agricultural sector has to consider all the components of overall sector which range from downstream to upstream for its efficient and substantial consolidation. For that, policies must be designed to simultaneously consider farmers living standards, consumers requirements and environment protection improvement, satisfaction and sustainability. Only the achievement of these combined objectives can move Senegal from its vicious circle (low income, low savings and low domestic production) to a virtuous circle (satisfying domestic demand and achieving Senegals sustainable economic growth).

Keywords: Agricultural Production Policies, Food Self-sufficiency, Yield Gap, Stochastic Production Function, Granger-causality Test, Senegal River Valley