Wheat in the tropics: economic and policy issues.

Interest in wheat production in the warmer tropics stems from rapidly increasing wheat consumption and imports in many tropical countries. One billion people in the tropical belt (23 degrees North to 23 degrees South) now consume over 22 million tons of wheat, 83% of which is imported. In many tropical countries, wheat (usually bread) has become the staple food, especially of urban consumers. Wheat consumption has increased because of consumers' rising incomes and interest in convenient foods and a diversified diet. More importantly, governments have encouraged rapid increases in wheat consumption through export promotion and food aid. Large-scale investments in capital-intensive milling and baking industries have entrenched interest in continuing wheat imports. Governments concerned about rising wheat imports should consider policy alternatives as part of an integrated food policy analysis that includes consumer price policies for bread and competing staples, cereal import and food-aid policies, removal of incentives to the milling industry, promotion of nonwheat food staples, including composite flours, and increased domestic agricultural production. Domestic wheat production is only one alternative for increasing agricultural production. The comparative advantage framework enables an assessment of the real returns to the country of resources used in wheat production versus alternatives. These returns are likely to be highest where wheat enables an increase in cropping intensity, using available land, labor, water, and mechanical services to a fuller capacity. The place of wheat in the farming system also needs to be carefully evaluated, with particular attention given to the need for timely planting, which is critical for successful wheat production in the warmer tropics. These economic issues should be addressed at an early stage in any proposed wheat consumption/production program.