What's the Case for Self-Sufficiency in Rice Production?
By Harry Greaves, Jr
July 25, 2000

The whole basis of Geepu Nah Tiepoh's article [The Rice Import Liberalization Agenda in Liberia: Some Critical Policy Issues] in the April/June 2000 issue of The Perspective rests on the false premise that a desirable policy goal should be self-sufficiency in rice production for Liberia. In this, as in countless other renditions I have read and heard, there is a lot of emotion-laden cant, hype and theology about the need for Liberia to be self-sufficient in rice, but nary a reasoned argument based in quantitative analysis to support this position. The underlying sentiment seems to be that because rice is the country's staple, ipso facto any Liberian administration worth its salt should have as its priority self-sufficiency in production of the crop. But there is no economic law which stipulates that a country has to be self-sufficient in its staple. Indeed, if we applied this logic to every nation on God's green earth, then we would all have to return to subsistence farming, with very little international trade in food commodities. Thus, the Japanese (great consumers of beef) would have to herd their own cattle and eschew Texas beef, the British would say good-bye to New Zealand lamb, and of course Liberians would have to rein in their appetite for pussawa.

The reality, of course, is quite different. Ever since man traded in his bearskin and club for more gentle forms of human interaction, he has engaged in commerce with his fellow man, exchanging those things he liked but did not, could not, or would not produce in sufficient to assuage his appetite with things which his neighbor produced. Sometimes he paid for his neighbor's output with goods which he produced and his neighbor wanted. Other times, he paid using a medium of exchange (currency) to which he and has neighbor mutually agreed to ascribe a certain value.

We are now in a global economy in which the easy accessibility and relatively low cost of information has made trade amongst peoples over vast expanses of geography a snap. As a consumer, I can log on to the Internet from my perch in Monrovia, and in an instant get quotations from rice producers as far afield as Thailand, Vietnam and Louisiana to enable me to make an informed decision as to whether I would be better off to buy my rice from a farmer in Tappita or from one of foreign competitors. We are in an era in which the consumer is king and producers who want to play the game will be forced to compete for his business by offering their wares on the best terms the consumer is willing to accept. Those countries that understand this basic truth will be the ones most likely to succeed in this new global economy.

What that means for Liberia is that we can no longer afford to adopt policy prescriptions purely on the basis of emotion. In the context of the rice debate, that means asking some tough questions about resource allocation. The opportunity cost of investing significant sums of money in rice production is denying that investment in some alternative economic activity, such as cocoa or coffee or some other crop. The appropriate question asked is, where can the country get the biggest bang for its buck? And the answer to that question lies in research and analysis, not in ideology. I for one will remain skeptical about the wisdom of devoting large amounts of capital to rice production until someone shows me data which demonstrates that Liberia enjoys such a comparative advantage in rice production (compared to other parts of the world) that the Liberian consumer would be better off buying rice from a local producer as opposed to importing it.

Harry Greaves, Jr. is a management consultant with KPMG International

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