the Symposium on Wheats for More Tropical Environments - cimmyt

313in areas where wheat yields arerelatively low, but where <strong>the</strong>re are fewalternatives. (The rapid expansion ofwheat in Bangladesh on residualmoisture after rice illustrates thispoint). A similar issue arises in thosetropical countries with limited highlandareas suitable for wheat, but where<strong>the</strong>re are a number of alternative landuses with high returns (4).Third, <strong>the</strong> greatest potential for wheatin <strong>the</strong> tropics is likely to be as a secondor third crop after a main crop, such asrice or cotton. An early variety of wheatthat fills a gap in <strong>the</strong> cropping calendarand enables increased croppingintensity may also allow more efficientuse of farmers' labor, land and waterresources.Fourth, <strong>the</strong> economic profitability ofwheat in many countries is criticallydependent on transportation costs from<strong>the</strong> producing region to <strong>the</strong>consumption center. For example, in1979, it was estimated that transportcosts for wheat from <strong>the</strong> north ofNigeria to Lagos were about usa 65/tonat <strong>the</strong> real exchange rate. Assuming aelF price of wheat of about $200/t, <strong>the</strong>cost of imported wheat in <strong>the</strong> northwould have been about $265/ton(200+65), while <strong>the</strong> real·value ofdomestically produced wheat at Lagoswould be about $135/ton (200-65), oronly half of its value in <strong>the</strong> north. Given<strong>the</strong>se wide margins, it may have beenprofitable to produce wheat for localconsumption in <strong>the</strong> north, but quiteunprofitable to substitute it for wheatimports in Lagos. In some countries,this issue is fur<strong>the</strong>r complicated by <strong>the</strong>location of flour mills on <strong>the</strong> coast forimported wheat. If wheat is to beproduced in <strong>the</strong> interior for localconsumption, <strong>the</strong>re may be a need toestablish small-scale wheat mills in <strong>the</strong>prodUcing area (6).Farmer compatibUityThe key issues in <strong>the</strong> acceptance ofwheat production by farmers areprofitability, risk and compatibility with<strong>the</strong>ir current farming systems. The lasttwo are related: one of <strong>the</strong> most criticaldeterminants of wheat yields in <strong>the</strong>tropics will be timely planting. Hence, itis essential to examine <strong>the</strong> currentfarming system and <strong>the</strong> extent to which<strong>the</strong> farming calender and availableresources will allow planting during <strong>the</strong>optimal period. Expected yields underfarmers' conditions must be carefullyevaluated through extensive fieldtesting Within <strong>the</strong> cropping system andresources available to farmers. Severalwheat development projects have beenwildly optimistic about expected farmeryields. Even where wheat fits well into<strong>the</strong> cropping system, <strong>the</strong>re is always alearning curve for <strong>the</strong> adoption of a newcrop.Profitability depends on both <strong>the</strong> inputand output prices facing farmers. It isnot difficult to make wheat productionprofitable. The phenomenal expanSionof wheat production from a very smallbase in Saudi Arabia reflects highsubsidies on water, machinery andfertilizer, and <strong>the</strong> highest producerprice in <strong>the</strong> world, over usa 1,000/ton.The issue is to find that combination ofprice incentives which promotes anefficient industry. The basic gUidelinesfor setting a domestic wheat price willbe <strong>the</strong> price of imported wheat(adjusted for exchange rateovervaluation) and <strong>the</strong> price ofcompeting agricultural products.Once a domestic producer price hasbeen set, a mechanism will be neededto ensure that this price is actuallyreceived by farmers. In most countries,wheat millers enjoy a degree ofmonopoly power. They also prefer <strong>the</strong>status quo of using only importedwheat, whose supply and quality ispredictable and which can be handledin volume. In <strong>the</strong> initial stages, <strong>the</strong>government food procurement agencywill probably have to act as a wheatbuyer, since it will be in a much betterposition to negotiate with <strong>the</strong> millers.