Research On The Factors Influencing Rice Cultivation In Sierra Leone: A Supply Response Model Approach

Rice, as a staple food of the vast majority of Sierra Leoneans, is eaten on a daily basis by every household in the country. As the most important food crop, rice is widely grown in Sierra Leone. In its recent report, Statistics Sierra Leone(SSL) noted that rice crop contributes the largest to agricultural GDP of Sierra Leone while at the same time provides employment for more than 70% of the labor force in Sierra Leone. Local supply of rice has significant implications for food security and food self-sufficiency in Sierra Leone. Despite its importance as a staple food, rice cultivation in Sierra Leone has been declining in recent years. Sierra Leone was not only independent in terms of rice, but was also a net exporter of rice until the 1970 s. Due to continuous long-term negligence by state authorities, Sierra Leone’s importation of rice steadily grew after the 1970 s as local production increasingly lagged behind consumption demand. The drop in rice production in Sierra Leone is evident in the widening supply-demand gap for the crop in the country. This has resulted in the sequential use of scarce foreign reserve to impo rt rice that can otherwise be efficiently produced locally at lower cost. Furthermore, the decline in local cultivation of rice has had myriad socio-economic implications for Sierra Leone; including balance of payment deficit, skyrocketing consumer prices and bulging foreign debt.The purpose of this study was to evaluate the influential factors of rice cultivation(rice supply) using a rice supply response model approach. Two sets of hypotheses were tested in this study, these are the price factor(su ch as rice producer price) and non-price related factors(such as the yearly public investment, rice and cassava acreages, rural population shift, quantity of rice imported, fertilizer consumption and annual rainfall). It was hypothesized that non-price related factors have influential role in determining rice cultivation or supply of rice grain in Sierra Leone and second, it was hypothesized that price factor play a major role in the Sierra Leone ’s rice cultivation(rice supply). Production variables for the rice supply model obtained from the literature, which are capable of evaluating the stated hypotheses, were identified and selected in relation to data availability. The Autoregressive Distributed Lag(Bounds test) method was selected as the most fitting methodology for conducting the statistical analyses of time series data for this supply response model. This technique was selected due to the fact that it capable of differentiating between short-run and long-run supply elasticities, and the fact that th e ARDL method does not anyway impose restrictive assumptions on the selected variables included in the model.The results revealed that the producer price of rice is a main supply shifter(factor) for rice cultivation and hence its supply in Sierra Leone. An increase in the producer price affects rice cultivation(rice supply) positively in the long-run. Results also exposed that the yearly quantity of imported rice has a negative effect on rice cultivation both in the short-run and long-run. Public investment has a negative effect on rice cultivation(rice supply) only in the short-run. Increase in rice acreage has a positive influence on rice cultivation both in the short-run and long-run, and rainfall has a negative effect in the short run only. Hence, it can be resolved that the hypotheses, which stated that price related factors influence rice cultivation(rice supply) has been confirmed by this study. The supply response result also indicated that climatological factors such as rainfall, has a significant effect on rice cultivation in Sierra Leone. An increase in rainfall may have positive influence on rice cultivation in the long run, but negative in the short run. Therefore, the hypothesis which stated that climatological factors play a major role in t he Sierra Leone’s rice cultivation activities has also been confirmed by this study. Furthermore, the long-run elasticities have a contrasting effect on rice supply relative to the short-run elasticities.Results revealed that the error correction term shows the speed of adjustment back to the equilibrium state when the system is in disequilibrium. This error correction coefficient shows that 68.1% of the previous year’s deviation from the real long-run equilibrium is corrected in the current year. This is an effective measure of the system’s responsiveness to change s in the factors influencing rice cultivation(rice supply).