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Importation of Rice : India Restricts its Capacities

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Importation of Rice : India Restricts its Capacities

Beyond its socio-cultural aspect, rice cultivation plays a crucial geopolitical role, similar to wheat. While being a staple for many Africans, the volume of rice imports far exceeds local production. Indeed, Benin, Togo, Guinea, and Burkina Faso rely on India for over 80 % of their rice imports.

Context of India’s rice export restriction

India ranks second globally in terms of rice production, generating approximately 121 million tonnes of paddies annually. Since 2019, the country has maintained its status as a leader in the global rice trade, accounting for 40 % of exports. This outstanding performance translates to an average of 45 million tonnes (Mt) of rice exported each year.

On average, Africa imports 18 million tonnes of Indian rice, with 16 million tonnes going to the Sub-Saharan region. In 2022, Africa spent 3.9 billion USD on importing 11 million tonnes of Indian white rice. This volume represents only about 27 % of the total consumption of this essential commodity on the African continent.

India regulates the export of non-Basmati rice

According to the Ministry of Consumer Affairs, Indian exports of non-basmati rice saw a significant increase of 35 % in the second quarter of 2023. This surge in external demand is a result of the suspension of the cereal agreement in the Black Sea and climate disruption. The price of rice has reached an unparalleled peak in nearly 15 years. To alleviate pressure on domestic market prices, the Indian Government has restricted exports by banning those of non-basmati rice.

Following the fundamental principle of supply and demand, restricting exports leads to an excess supply in the domestic market. If rice exhibits sufficiently low elasticity, this should result in a decrease in prices. India previously implemented this strategy in response to the subprime crisis in 2010-2011. This approach proved effective in mitigating the rise in prices in the domestic market. However, it is essential to emphasize that, at that time, exports were considerably lower. Therefore, the consequences on the international stage differ from those observed currently.

The Indian Authority’s decision impacts a quarter of the country’s total rice shipments. This regulation applies to several categories of rice demanded in the international market, with the exception of basmati rice, which remains free from any ban. This category, representing the majority of Indian rice exports, allows farmers to maintain attractive prices in the global market.

Consequences for African countries importing Indian rice

In general, export bans on rice lead to unfavorable consequences, both in the short term for local communities and on an international scale.These restrictions increase global market prices, which raises concerns about food insecurity for millions of Africans.

Furthermore, the head of a United Nations agency stresses that this restriction increases the risk of political instability in Africa. In an interview in New York on September 21, Alvaro Lario, leader of the International Fund for Agricultural Development, warns of the risk of unrest related to rice shortages in Africa. The current regulation brings back memories of the global rice crisis in 2008. At that time, Vietnam and India had restricted their exports, jeopardizing the food security of 100 million people, mainly in sub-Saharan Africa. However, we applaud the Indian government’s decision to partially lift this ban for 5 African countries, including Madagascar, for non-basmati rice in early 2024.

Indian rice shortage poses risk to West Africa

Rice is one of the main sources of food energy in West Africa and Madagascar. The mismatch between the limited production of the rice sector and local demand is the primary reason for the dependence on imports of Indian rice. A potential rice shortage would exacerbate food insecurity in West African countries and Madagascar, possibly leading to hunger-related riots.

Approximately, the restriction on non-basmati rice exports affects 20 % of India’s total rice exports. This proportion represents a decrease of around 3.2 million tonnes for Sub-Saharan Africa. The reduction in import volume could potentially lead to an increase in rice prices, thereby exacerbating poverty and social inequalities.

Furthermore, population growth, urbanization, and evolving consumer preferences consistently contribute to the rising demand. This leads to a potential rice crisis. Moreover, local demand is already experiencing an annual increase of 6 %, surpassing the growth of any other food commodity on the continent. This combination of factors underscores the urgent need for sustainable solutions to ensure food security and mitigate potential risks associated with rice scarcity.

African countries’ adaptation strategies for shortages

Faced with the restriction on the export of broken rice and non-basmati white rice from India, African nations must seek alternatives to fill this gap. However, a 20 % tax impacts parboiled rice shipments, while a floor price of 950 USD applies to each ton of basmati rice imported from India. The Rice Exporters Association (TREA) emphasizes that these restrictions will remain in effect until the upcoming legislative elections scheduled between April and May 2024.

Local initiatives addressing the rice shortage

The option of sourcing rice from other suppliers such as Thailand, Vietnam, or Pakistan is also available. However, this may not be sustainable in the long term since these countries already account for 30 % of global rice exports. A significant increase in demand could lead to higher rice prices and impact their domestic markets. Additionally, these suppliers may follow India’s example by imposing restrictions on their own rice exports.

Thus, Sub-Saharan African countries should adopt local and resilient solutions to increase rice production, following the example of Benin. It is important to note that among the 54 countries on the continent, 40 engage in rice cultivation, which is the primary source of income for over 35 million small-scale farmers. Despite this, local production can only meet about 60 % of the current demand in the Sub-Saharan region. This deficit between local rice production and demand results in annual imports of 14 to 15 million tonnes, representing a cost exceeding 6 billion USD.

Another alternative is to diversify the sources of supply by increasing the purchase of cereals such as wheat, corn, barley, or sorghum. However, it is essential to note that this approach involves a significant shift in the dietary habits of several West African countries and Madagascar. Unfortunately, this change may negatively impact economic growth by increasing poverty levels.

Measures taken by international organizations to support rice cultivation

Various initiatives have already improved rice yields and management in several African countries. One notable example is the introduction of the NERICA rice varieties developed by AfricaRice. This program has reduced poverty and food insecurity for 8 million people in 16 countries across the continent. NERICA seeds have increased yields by 23 %, an undeniable success in the field.

The integration of smart valley technology in West Africa offers significant benefits and agricultural advances in Africa. This approach, developed by AfricaRice, allows farmers to increase their yield by 0.9 tons per hectare (t/ha) and net income by 267 USD/ha. The food consumption score shows that this innovation has enabled women to contribute more to improving food security than men.

Other applications of a similar nature developed by AfricaRice have also brought specific benefits to several African countries :

  • In Nigeria, RiceAdvice improved rice yield by about 0.55 t/ha and increased profitability by around 250 USD per hectare.
  • In Benin, the GEM rice parboiling technology enabled users to achieve a significant profit of 392 USD per ton of parboiled rice.
  • In Côte d’Ivoire, the lowland rice variety, WITA 9, demonstrated a yield of 0.7 t/ha and a substantial increase in income of 91 USD/ha/season.

Future Perspectives : Towards Food Independence in Africa

The rice sector emerges as a potential solution to poverty in Africa. Rice availability and prices are important factors in the well-being of many Africans, especially the most vulnerable. The increasing dominance of rice in the diets of African consumers makes it a political component. This sector has the potential to exert significant influence on the political, social, and economic stability of nations on the continent. This sector has the potential to exert significant influence on the political, social, and economic stability of nations on the continent.

Sub-Saharan Africa has the human, physical and economic resources to achieve food self-sufficiency through sustainable production of high-quality rice. Also, the sector has the potential to create jobs for 17 million young people each year.

It’s worth noting that rice cultivation relies predominantly on women in African riverine ecosystems. Women farmers undertake the majority of the steps in rice cultivation, from seed sowing to weeding, harvesting, processing, and marketing. This observation highlights the central role of women in the development and sustainability of this agricultural sector.

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