Economywide effects and implications of alternative policies

The objective of this chapter is to assess the potential economywide effects of rice-sector policies on sector output growth and competitiveness with imports, changes in the sector and overall food prices, rural income growth, and overall economic performance. More specifically, we ask the following questions: (1) Which policies are likely co increase rice production and substantially reduce rice imports? (2) What are the characteristics of such production growth? (3) How will these policies affect production in the agricultural sector generally, food price inflation, food consumption, and other economywide effects? We use an economywide multimarket (EMM) model developed for Nigeria to analyze these questions. The chapter also briefly discusses the potential opportunity costs of pursuing a rice import substitution policy, in order to provide some partial insights into the cost of implementing key policies identified through the model's simulations.