Upgrading Rice Value Chains in West Africa
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By: Sara Gustafson

In the wake of the 2008 food price crisis, many policymakers and development practitioners shifted their focus toward enhancing the capacity and resilience of domestic food value chains. In West Africa, this new focus centered on rice. Since rice constitutes a leading staple food source in the region, it was hoped that increased investment in this area would increase domestic rice production and reduce reliance on imports, thus improving food security.

According to a new study published in Global Food Security, however, the success of the development of West African rice value chains has varied from country to country. In addition, the region continues to face significant challenges in terms of effective policies, financial mechanisms, and technologies to upgrade rice value chains. Further research and investments will be needed to help domestic rice value chains in West Africa compete with imports in  terms of quality, efficiency, cost, and scale.

The study examined public and private investments in upgraded rice processing facilities, contract farming schemes, and vertical integration in 15 West African countries. In a review of recent rice production and consumption trends, the report found that the average annual growth rate of domestic rice production in the study countries was 10.1 percent between 2009 and 2019. The highest rate of growth was seen in Nigeria, Senegal, Mali, Ghana, and Côte d’Ivoire, which averaged between 9.1 percent and 19.4 percent per year. This growth stemmed mainly from increased rice area rather than increased yields.

Despite this increased production, however, West Africa has continued to experience a rice deficit over the past decade. In fact, the study found that the region has become increasingly more, not less, reliant on rice imports. In the 1960s, the share of imported rice in the region’s overall consumption was 20 percent; in 2009, that share reached 46 percent. Rice imports declined slightly in Senegal, Mali, Mauritania, and Guinea-Bissau between 2009 and 2019 but rose in all of the other study countries during this period. Today, West Africa is the world’s second largest importer of rice after China.

The dangers of this overreliance on rice imports became glaringly clear during the 2008 food price crisis, when rice prices in the region rose threefold within a matter of weeks. In response, West African policymakers established the Coalition for African Rice Development and developed targeted National Rice Development Strategies (NRDS) designed to upgrade domestic rice value chains to help meet domestic demand and enhance food security. These strategies have focused on technical and organizational changes in order to decrease production costs and increase the amount of rice produced. Policies have included increasing access to improved inputs (seeds and fertilizers) to help smallholders increase paddy production and investing in land development to increase the amount of area planted to rice. Stakeholders, both public and private, have also invested in industrial milling technologies designed to improve the quality of domestic milled rice.

Based on a series of outcome indicators, the study classified each of the 15 countries in terms of its value chain upgrading: (a) dynamic, (b) moderate, or (c) nonexistent. Nigeria and Senegal were classified as dynamic; Ghana, Mali, Côte d’Ivoire, Burkina Faso, Liberia, Niger, Sierra Leone, Benin and Togo were moderate; and Guinea, Mauritania, The Gambia, and Guinea-Bissau were classified as nonexistent.  

Several factors were identified as key components in countries’ upgraded rice value chain status. The study found that value chain upgrading tends to be more dynamic when foreign direct investment (FDI) is higher. Importantly, cultural barriers to consumption of domestic rice (i.e., consumer preferences) were found to play a significant role in levels of FDI, while physical barriers (i.e., landlocked status) were not. Vertical coordination, such as contract farming, also appears important to successful value chain upgrading; in Senegal and Nigeria, vertical coordination schemes improved millers’ ability to source high-quality paddy rice through providing high-quality seeds, fertilizers, and technical advice to farmers. However, contract farming schemes themselves are not widespread; across all 15 study countries, only eight countries had established contract farming in rice value chains, those programs reached only an estimated 9 percent of the rice-growing population.

The paper identifies several recommendations for West African policymakers to help address their rice value chains’ specific challenges in order to stimulate more successful and sustainable upgrades. First, the structure of contract farming and vertical integration schemes needs to take into consideration farmers’ preferences for factors such as the timing of inputs and payments. These schemes also need to emphasize improvements to farmers’ livelihoods in order to increase buy-in. Contracts should also focus on paddy quality, not just on the quantity of rice procured for milling. Finally, systems for monitoring and enforcement of contracts need to be put in place to increase both farmers’ and millers’ incentives to abide by the contract.

Second, increased investment is needed to help millers successfully adapt to and use new technologies. This includes investing in local training and support services, as well as in local availability of spare parts and maintenance capabilities.

Third, West Africa’s rice sector needs more robust and readily available financing mechanisms for both farmers and millers. This hampers broader take-up of both contract farming and vertical integration schemes, thus reducing opportunities for value chain upgrading. Increasing farmers’ and millers’ access to credit could increase involvement in more profitable value chains.

Finally, rice value chains in West Africa consist of both smallholder producers and large-scale operations. Policymakers need to enact policies that benefit and are equitable for all of the region’s value chain actors.

By investing in further research into optimal policies, coordination and finance mechanisms, and inclusive technology support chains, West African policymakers could help the region’s domestic rice value chains compete against global rice imports. This could help the region reach its goals for phase 2 of the NRDS, which calls for the doubling of rice production in Africa south of the Sahara by 2030.

Sara Gustafson is a freelance writer.

Photo credit:Jeremy Weate