Promoting Ethiopia’s Rice Industry for Import Substitution

Posted on May 11, 2018 by Lesley White - FAC blog

Opening speech, HE Dr Kaba Urgessa, State Minister, MoANR

Prepared by Dawit Alemu

With the considerable increase in rice consumption in Africa, sourced mainly from imports, and the burden this is creating on meagre foreign currency reserves, a number of initiatives are currently being implemented by African countries with support from development partners to reverse this situation. At continental level, the main initiative is the Coalition for African Rice Development (CARD), predominantly supported by the Japanese government which aimed to double domestic rice production in Africa from 2008 to 2018. A second phase of CARD is currently being planned.

Rice consumption in Ethiopia has also increased considerably in recent years, and although domestic production has increased, imports have also had to rise to meet demand. Recognising the importance of rice in Ethiopia and the need to review the status of rice R&D, a policy seminar entitled “Rice Industry Promotion and Import Substitution in Ethiopia” was held on March 26, 2018 at the Ethiopian Institute of Agricultural Research. The seminar was organised by the Ministry of Agriculture and Natural Resource (MoANR) in collaboration with the Japan International Cooperation Agency (JICA). The objectives of the event were to: (i) share experiences from Asian countries, especially in relation to the green revolution; (ii) discuss the status of rice R&D; and (iii) deliberate on possible intervention options for the sector’s development in light of the observed challenges and opportunities.

The first presentation was on the Asian experience in rice sector development by Professor Keijiro Otsuka from Kobe University in Japan, while a second focused on the importance and comparative advantages of rice in Ethiopia based on APRA background research work “A historical analysis of rice commercialisation in Ethiopia: the case of the Fogera plain” by APRA Ethiopia Team represented by Dawit Alemu. The third presentation was by Shiratori Kiyoshi from the EthioRice project on the status of the national rice research and training center, and the last was made by Melese Liyhe from SasaKawa Global 2000 (SG 2000) on the organisation’s experiences of introducing rice and associated technologies to new areas in Ethiopia.

The advantages of rice, and observed trends in domestic rice production, imports and the level of self-sufficiency that the four presentations highlighted, enabled participants to discuss what needs to be done to fully exploit the opportunities rice provides in Ethiopia. The key advantages of rice are: (i) the existence of suitable agro-ecologies for rice production, which could help to address food insecurity and utilise resources more efficiently; (ii) the compatibility of rice with local farming systems and traditional foods, especially with the production of ‘ingera’ (a sourdough flatbread); (iii) the economic incentives of rice production due to its higher yield and higher unit price than other popular cereals, such as teff; and (iv) the possibility of import substitution, which would reduce rice imports and the associated burden on foreign currency reserves.

However, although domestic rice consumption has increased, overall self-sufficiency has been declining considerably over recent years. The data from APRA’s research indicates that the extent of rice self-sufficiency decreased from about 70% in 2008 to about 30% in 2016 (Figure 1).

Figure 2: Tends in production, imports and self-sufficiency in rice (2008 – 2016)

Source: , In Press

The rate of increase in rice consumption has outweighed the rate of increase in domestic production, which has to be met by rice imports. For a country like Ethiopia, which is dependent on exports of agricultural products to generate required foreign currency, the burden rice creates is a serious challenge. Data from the Ethiopia Revenue and Customs Authority indicates that rice imports increased from 22,500 tonnes in 2008 to 311,827 tonnes in 2016, which is financially an increase from US$12.07 million in 2008 to US$170.69 million in 2016. In addition, the proportion of poor quality rice imports (broken rice) is increasing. In 2016 poor quality rice was estimated to make up about 20% of total rice imports, and as a result of its low cost is posing a serious challenge for domestic rice competitiveness.

The seminar concluded with the following key recommendations:

To conduct research to generate information about the key factors that determine the competitiveness of domestic rice, the extent of smallholder farmers’ commercialisation and its determinant factors, and the key challenges and opportunities in the development of the rice value chain; and
The need to develop domestic capacity in rice R&D. The immediate operationalisation of the National Rice Research and Training Center at Fogera was agreed to be a top priority and the Director General of the Ethiopian Institute of Agricultural Research (EIAR) was assigned to lead a committee that will follow the mobilisation of resources and immediate operationalisation of the centre in collaboration with MoANR.

Partial view of participants

In this regard, the APRA research plans in Ethiopia were found to be very relevant, especially in documenting: (i) the trends in rice commercialisation; (ii) its contribution to agrarian transformation in the Fogera plain; and (iii) the policy and development related factors which play a crucial role in enhancing commercialisation of the rice sector, and advancing socially inclusive livelihoods, in order to inform policy makers and development practitioners. The APRA Ethiopia team will organise a similar national policy dialogue once their research outputs are complete.

Note: The seminar was attended by the State Minister of MoANR, HE Dr Kaba Urgessa; the Deputy Chief of Mission of the Embassy of Japan, Mr Akira Uchida; the Chief Representative of JICA, Mr Ken Yamada; the Director General of EIAR, Dr Mandefro Negussie; country director of SG 2000, Dr Abera Debelo; senior directors of MoANR; senior researchers of the Ethiopian Development Research Institute (EDRI), EIAR and regional agricultural research institutes; and private actors (rice seed producers, processors and traders).

Dawit Alemu, Agajie Tesfaye, Abebaw Asaye, Degu Addis, John Thompson, and Rachel Sabates-Wheeler

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