Like many other
African countries, Senegal was sorely hit by the rice price crisis of 2007 and
2008. However, in November 2008 — just 6 months after the global rice price
peak and in the wake of the government’s Grande Offensive Agricole pour la
Nourriture et l’Abondance (GOANA) to achieve self-sufficiency in rice by 2015 —
the price of local Senegal River valley (SRV) rice dropped sharply.
The reason? Like many
productivist attempts in the past, the GOANA plan had increased production of
local rice, but there was no commensurate increase in demand.
“Historically, the
Senegalese government has invested more in rice production — fertilizer,
finance and infrastructure — than in rice processing and marketing,” says
AfricaRice agricultural economist Matty Demont.
In colonial times,
cheap broken rice was imported to feed the labor force employed to grow
groundnut for export. Since independence in 1960, rice consumption has grown at
a staggering 7% per year.
Senegal has one of
the highest rates
of urbanization in Africa — urbanization that fuels rice
consumption and demand. Rice overtook millet and sorghum as the preferred
staple in Senegal’s urban centers in the 1980s and 1990s.
The reasons for the
city-dwellers’ adherence to imported rice are perfectly valid: a survey
conducted by AfricaRice and its partners before the food crisis showed that 40%
of urban rice consumers did not know that there was any domestically produced
rice!
Others complained that it was
unavailable (42%) and poorly marketed (40%); while a quarter of urban dwellers
said that the local rice is of inferior quality to the imported rice. Given
that urban dwellers comprise 65% of all rice consumers in the country, SRV rice
has a long way to go if it is going to replace the imported commodity in the
drive for self-sufficiency.
With the issues of delivery and
acceptance coming to the forefront as domestic rice production increases,
Demont and former visiting research fellow Amy Rizzotto suggest that the
government and other value chain stakeholders need to sequence policy actions
to effect the required changes needed for SRV rice to lead the self-sufficiency
‘offensive’. And this based on the assumption that value chains need to be
buyer-driven, if local rice is going to deliver self-sufficiency.
“We drew on a lot of data and
information,” explains Demont. “We conducted semi-structured interviews with a
broad range of SRV rice stakeholders from farmers, extension agents, processors
and traders, to consumers and restaurateurs, and even the top three rice
importers. We organized a stakeholder workshop to brainstorm in groups on
marketing SRV rice. There were the pre-food crisis survey data, and information
from the experimental auctions conducted in 2010 and 2011.”
From careful study of all this
information, Demont and Rizzotto distilled some generic ‘policy-sequencing
lessons’ that should be applicable on a wider scale than just Senegal alone.
1. Rice quality needs to be tailored
to consumer requirements as expressed in market demand. In the drive for
self-sufficiency in Africa, this will usually be driven by the large and often
import-biased urban markets.
2. This should be followed by
large-scale investment in rice productivity.
3. Processing and distribution
also need to be scaled up through investment in aggregation and storage
infrastructure.
4. Once local rice of the
required quality is available in marketable quantities, it should be branded
and advertised. This is to raise awareness and expectation among consumers, so
that the new brands capture a share of the market, otherwise it may be
impossible to modify long-term consumption habits and reverse the import biases
in urban end-markets.
5. Quality control and generic
promotion and advertising strategies need to be established and maintained, so
that the brands become credible products and their market share in urban end-markets
is maintained.
The application of these lessons
will differ in different value-chain contexts. “For example,” says Demont,
“Burkina Faso has the luxury of having an urban consumer base which is more
than willing to swap imported rice for local rice at the currently available
quality. Here, the priority is to increase production to meet consumers’ needs
in terms of volume.” Moreover, the sequencing of the policies is not as simple
as (1) followed by (2) followed by (3).
“All actions need to be initiated
more or less synchronously due to lags between investment and impact,” says
Demont, “but some actions can only be effective if certain milestones in
previous actions are attained.” In particular, step (5) shows that maintaining
the quality of the new brands and maintaining their profile in the public arena
is an ongoing process.
In Senegal, the whole value chain
is skewed by historic and current investments in increasing productivity and
production without similar investments in processing and marketing.
“For Senegal, we propose a
three-stage approach,” explains Demont. “First, ‘we’ should look at adding
value to the local rice. This will involve improving the quality so that it
matches that of imported brands; facilitating contractual arrangements between
adjacent links in the value chain to ensure quality — for example, between large
buyers in Dakar and farmers.” This step also includes labeling and branding.
A second step for Senegal would
be to increase the supply of the branded product through productivity
enhancement and scaling up of the infrastructure to enable aggregation and
storage. “Of course, productivity enhancement is already a major theme for the
Senegalese government,” says Demont.
“The difficulty might be
persuading farmers to keep increasing their production, when they have
historically been punished by the market in terms of price at harvest. This is
where contracting may play a crucial role.”
The third step is to raise demand
for quality SRV rice through generic promotion and advertising. It also
involves building the customer base by reaching potential new consumers, and
ensuring that the product delivers what the publicity says it will. “Each
‘step’ is really just a milestone,” indicates Demont. “The activities of each
step will continue even as the next step starts – overlap and ongoing
commitment.”
“The good news,” says Demont, “is
that, since the stakeholder workshop, the private sector has made its own moves
to upgrade the value chain.” For example, 14 rice importers launched a joint
venture with producers and processors – the Société de Promotion et de Commercialisation
du Riz Sénégalais (SPCRS) – to buy, mill and market SRV rice to Senegalese
consumers, controlling quality through contracts with millers and farmers.
Other value-chain initiatives involve high-quality and medium-quality SRV rice,
targeting different market segments.
“New aromatic rice varieties that
have been recently introduced in the SRV are promising,” says Demont. “They may
trigger further value-chain development such that the SRV will henceforth be
able to reach demanding consumer segments in Dakar which were previously
inaccessible for local rice.”
Thanks to generic promotion of
SRV rice by the Senegalese government and many development partners, the
continued high price of imported rice, and the quality increases already
evident in branded SRV rice based on AfricaRice varieties, there has already
been positive uptake of SRV rice by urban consumers.
“The awareness of SRV rice in
Dakar has risen dramatically,” says Demont. “The latest round of experimental
auctions in the capital (conducted in April 2012) showed an awareness level of
93% – just eight people out of 120 were not aware of SRV rice. That’s a big
leap from 60% in 2006–2007!”
Generalizing
from the SRV-specific case, upgrading rice value chains is complex – many
synchronous actions are needed and the challenge for policy makers is finding
(i) the optimal mix between supply-shifting (productivity-increasing),
value-adding (quality, labeling, branding) and demand-lifting (promotion,
advertising) strategies, and (ii) the optimal sequence in which these actions
need to take place.
Related Journal Articles
1.
Demont, M.,
Rutsaert, P., Ndour, M., Verbeke, W., Seck, P.A. & Tollens, E. 2013.
Experimental Auctions, Collective Induction and Choice Shift:
Willingness-to-pay for Rice Quality in Senegal. European Review of Agricultural
Economics, in press.
2. Demont,
M. & Rizzotto, A.C. 2012. Policy Sequencing and the Development of Rice
Value Chains in Senegal. Development Policy Review, 30(4):451–472.
3. Demont,
M., Rutsaert, P., Ndour, M. & Verbeke, W. Reversing Urban Bias in African
Rice Markets: Evidence from Senegal. World Development, under review.
