the Symposium on Wheats for More Tropical Environments - cimmyt

303V. EconomicsWheat in <strong>the</strong> Tropics:Economic and Policy IssuesD. Byerlee, Economics Program, CIMMYT, Islamabad, PakistanAbstractInterest in wheat production in <strong>the</strong> warmer tropics stemsfrom rapidlyincreasing wheat consumption and imports in many tropical countries. Onebillion people in <strong>the</strong> tropical belt (23 ON to 23°5) now consume over 22 milliontons of wheat, 83% of which is imported. In many tropical countries. wheat(usually bread) has become <strong>the</strong> staplefood. especially of urban consumers.Wheat consumption has increased because ofconsumers' rising incomes andinterest in conveniencefoods and a diversified diet. More importantly.governments have encouraged rapid increases in wheat consumption throughfavorable pricing policiesfor bread. including subsidies in many countries.Exporting countries have also promoted wheat consumption through exportpromotion andfood aid. Large-scale investments in capital-intensive milling andbaking industries have entrenched interest in continuing wheat imports.Governments concerned about rising wheat imports should consider policyalternatives as part ofan integratedfood policy analysis that includes consumerprice policiesfor bread and competing staples. cereal import andfood-atdpolicies. removal of incentives to <strong>the</strong> milling industry. promotion of nonwheatfood staples. including compositeflours. and increased domestic agriculturalproduction. Domestic wheat production is only one alternativefor increasingagricultural production. The comparative advantageframework enables anassessment of <strong>the</strong> real returns to <strong>the</strong> country of resources used in wheatproduction versus alternatives. These returns are likely to be highest wherewheat enables an increase in cropping intensity. using available land. labor.water and mechanical services to a fuller capacity. The place of wheat in <strong>the</strong>farming system also needs to be carefully evaluated. with particular attention to<strong>the</strong> needfor timely planting. which is criticalfor successful wheat production in<strong>the</strong> warmer tropics. These economic issues should be addressed at an earlystage in any proposed wheat consumption/production program.Most people in <strong>the</strong> industrializedcountries begin <strong>the</strong>ir day with a cup oftea or coffee. whose major ingredientsoriginated on a small farm or plantationin one of <strong>the</strong> tropical countries. such asBrazil. Ivory Coast or Sri Lanka. At <strong>the</strong>same time. <strong>the</strong> people of <strong>the</strong>se tropicalcountries. especially those in urbanareas. are likely to begin <strong>the</strong>ir day withbread for breakfast. bread made fromwheat grown on <strong>the</strong> fanns of one of <strong>the</strong>industrialized countries. At first sight.this may appear to be a reasonableexchange. but closer examination raisesa number of disturbing questions.Unlike tea or coffee. bread has becomea basic food staple to many people in<strong>the</strong> tropics. proViding a significantproportion of <strong>the</strong>ir calories. not only forbreakfast but also for lunch and.sometimes. dinner as well. Wheatimports by many tropical countries aregrOWing very rapidly. and nowconstitute a significant proportion offoreign exchange expenditures. Whilepeople in <strong>the</strong> tropical countries may notbe "addicted" to bread in <strong>the</strong> same wayas are <strong>the</strong> coffee and tea drinkers. <strong>the</strong>yare increasingly dependent on bread for