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Research Article
Production Expansion, Competitiveness and Comparative Advantage of Upland Rice Production: Case of Fogera and Libokemekem Plain in Ethiopia

Yalfal Temesgen, Daniel Tilahun and Bayuh Belay

The International Journal of Applied Economics and Finance, 2014, 8(2), 43-50.

Abstract

Assessing the comparative advantage in upland rice production is of a major academic interest as well as policy significance because upland rice production competes for key production inputs land, labour and water which could have been used in alternative production activities. The introduction of rice in the Ethiopia were in early 1970s and early 1980s and production of upland rice under shifting cultivation system is an important economic activity in the Fogera and Libokemekem plain of northern western Ethiopia. The demand for rice combined with increasing land pressure in the lowlands, upland rice varieties is expanding very fast and the production competes for key production inputs land, labour and water which could have been used in alternative production activities. The gross income of paddy production was 16153 ETB per hectare and the cost benefit production of paddy per hectare shows that production of paddy was profitable. The Policy Analysis Matrix (PAM) methodology was used to determine the level of economic competitiveness in the production of upland rice crops in the Fogera and Libokemekem plain. The results indicate there is negative divergence between private and social profits indicating an expansion of the production of upland rice was profitable at farm level but not competitive at country level. This was because net effect of policy intervention is to reduce the farm level profitability of upland rice in area. The results show up the need for removing existing policy distortions in the structure of economic incentives to enhance economic efficiency and to attain coutry level competitiveness in upland rice production.

ASCI-ID: 18-99

Cited References Fulltext

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