Determinants of Rice Marketed Surplus in Togo: A Heckman Two-Stage Selection Approach
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Date
2013
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Abstract
This study examines the dynamics of rice consumption and production in Togo, a country where rice ranks third in consumption after maize and sorghum, constituting 3% of the total GDP. Despite a 17.40% growth in rice production from 2005 to 2008, consumption has outpaced domestic production, resulting in significant imports costing $7.5 million annually. The inefficiency of agricultural production efforts without a robust marketing system is highlighted.
The research employs the Heckman 2 Stage Selection Model to analyze the major determinants of rice marketed surplus in Togo, with a particular focus on the impact of transaction costs. Data from the Consumer Preferences Survey (2010) conducted by the AfricaRice Center, involving 253 randomly selected rice producer households from five main regions, informs the analysis.
The two-stage model involves a probit estimation to determine market participation factors and an Ordinary Least Squares (OLS) estimation to analyze marketed surplus. Results indicate a 76% market participation rate and an average marketed surplus of 2 tons. Factors such as household characteristics (schooling, gender, age, family size), market-related characteristics (paddy production, farmer-trader status, paddy price), and social network participation influence market outcomes. Region-specific effects and the Inverse Mill Ratio are also considered.
The findings suggest that government interventions in the Maritimes and Kara regions have positively impacted market participation. However, considerable imperfections in the rice market chain, compounded by transaction costs, hinder efficient price transmission to farmers. The study underscores the importance of addressing market imperfections alongside efforts to boost rice production. The government and development agencies are urged to target these issues to enhance the overall effectiveness of interventions.
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Keywords
Rice, Food security, Markets