Impact of Rising International Market Prices of Rice on Welfare and Poverty in Senegal

Abstract

This study assessed the impact of rising international market prices of rice on real household income and poverty in Senegal. Net benefit ratio indicator developed by Deaton (1989) to assess the impact of a change in the international rice price on household welfare were used in the analysis. The data came from the second poverty monitoring survey in Senegal. Using two indicators: (i) per capita spending and (ii) expenditure per adult equivalent, the results showed that rising international rice prices negatively affect real income and poverty. This negative effect were more pronounced in urban areas and in areas with high rice consumption. Poverty also increased by 3.5% when the first indicator was used. However, it increased by 4.25% when the second indicator was used. Statistics showed that 37% of the richest households consume rice compared to 7% of the poorest households. In addition, urban households allocate 25% of their budget to rice consumption, compared to 24.4% for rural households. To reduce Senegal’s vulnerability, governments need to take steps to limit the country’s dependence on rice imports. Therefore, it would be essential to invest more in the production and consumption of local rice.