Market information and decision making : the case of the «Observatoire du Riz» in Madagascar. Patrick RASOLOFO Nicole Andrianirina Hélène David Benz

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1 Market information and decision making : the case of the «Observatoire du Riz» in Madagascar Patrick RASOLOFO Nicole Andrianirina Hélène David Benz Agriculture MIS in Africa. Renewal & Impact ; March 29-31, 2010

2 Main points Importance of the rice in Madagascar PCPRice (Rice consultation platform for the steering of rice commodity chain) OdR Making decision process Limits

3 Importance of rice in Madagascar 12% GNP of Madagascar 43% agricultural GNP of the country 55% cultivated area, 87% of rural households Staple food Average consumption : 125 kg/capita/year Production doesn t meet national consumption : imports since 1970 Rice is highly strategic (political issue: avoid shortage, free distribution during election period or after a catastrophe)

4 Consultation and monitoring Plateform on Rice (PCP) and Rice Information System (OdR) Created in 2005, after a domestic market crisis in % increase of consumer prices, - Contradictory information about prices and availability between Min. of Agriculture and Mini. of Commerce - Announcement of public imports - delayed - Faced to this uncertainty, importers hesitated to import rice => shortage of rice

5 Consultation plateform for rice commodity chain steering Main objectives - Favour dialogue between different categories of stakeholders, - Favor circulation of market information (transparency), - discuss and propose measures to develop rice sector, - orient rice policy decisions

6 PCPRice members 8 stake-holders groups : 1-Producers 2- Rice millers (industries and small ones) 3- Intermediaries (transporters, collector, traders ) 4- Technical advice institutions 5- Credit institutions 6- Administration 7- Consumers 8- Researcher/ university - Status : association - Mandate of the board: 2 years - Board: elected representatives from each stake-holders group -President from private sector, elected by the members of the board ; Vice -President from administration - Executive secretariat: employee

7 L Observatoire du Riz (OdR) Institutionnal home: EPP/PADR (steering team of the Rural Development Plan, Prime Minister Departement) Missions: - Running the Rice MIS in all the districts of Madagascar - Providing up-dated informations and analysis to PCPRiz, in the frame of public/private consultation

8 INFORMATION FLOWS Collecte Infos receuillis Produits diffusion Utilisateurs Collecte des prix dans chaque marché hebdo du district Internet, Douanes, Commerce Finances Agriculture Réflexions, constat, recommandation Cours mondiaux, Prix de pétrole, Taux de change, Prix du riz local Importation, Variation climatique, etc. Tableaux et cartes des prix par district, Analyse temporelle et spatiale Prix du riz Notes H O R I Z O N Info Hebdo Base de donnée Réunion Courrier Journaux Mailing liste Radio SMS PCPRIZ MINISTERES LARGE PUBLIC INSTITUTIO NNEL Diffusion limitée par l accès aux supports ACTEURS DU MARCHE Diffusion limitée par l accès aux supports

9 Prix moyen /Kg Improvement of rice market stabilization capacity Stabilisation du marché du riz grâce à l analyse spatiale et temporelle de l Info-hebdo 1500 EVOLUTION DES PRIX MOYEN DU RIZ LOCAL Moyenne Riz local 2008 Moyenne Riz local 2009 Moyenne Riz local 2006 Moyenne Riz local S1 S3 S5 S7 S9 S11 S13 S15 S17 S19 S21 S23 S25 S27 S29 S31 S33 S35 S37 S39 S41 S43 S45 S47 S49 S51 Semaine

10 Concertation & anticipation process In 2006 & 2007 (cyclones) Monthly meetings of PCP + OdR, leaded by the Prime Minister OdR data-base and information network used to: Identify area affected by cyclones, Identify traders in these areas, Orient traders towards these areas PCP members estimate the needs and share the markets among them => Ease the satisfaction of local needs across the country and avoid sudden increase of prices in affected areas

11 In 2008 (World food crisis + «Green Revolution» national policy) Crisis anticipation OdR warning : from Sept. 2007, OdR alerted the PCP about the risk of sharp increase of world prices Measures recommended by OdR and PCPRice : Importation of rice before the price pick Constitution of stock negotiation of tones of rice with the Indian government

12 Crisis management OdR : deeply involved in the monitoring of international and domestic markets during all the crisis period Frequent briefing notes prepared by OdR (send to PCP members + Gvt, and discussed during PCP meetings) Frequent meeting of PCP + OdR + Gvt : Measures recommended (and implemented) Removal of Import Taxe and Value Added Taxe Temporary exportation ban Food for Work program for the most vulnerable Results: No need to import rice when prices where at their highest level Contributed to a very limited impact of World food crisis on Madagascar domestic market

13 In 2009 (political crises) Context : looting of several large stores + large whare-houses Dismantling of the President business on wholesale food products 10% inflation in few weeks = > new Gvt set low consumer price to gain popularity (lowered from 1000 to 500 Ar/kg) Suspension of «Green Revolution» program set by the previous government OdR + PCP : Several meetings with the Ministry of Commerce and new President team Measures recommended by OdR and PCPRiz : Stop the sales of subsidized rice (depressive effect on local rice), Encourage local rice buyers, Secure and ease transportation (removal of local transport tax ; military escort to secure transportation) Priority of rice imports despite the import limitations (due to restriction of currency expenses) Results : Low prices during the first 3 month of marketing season, but return to normal level and stabilization afterwards

14 By the Government: Use of OdR information To reassure urban consumers (ex : about rice availability) ; effet d annonce Justify undertaken actions To decide the needed incentives to regulate markets By the PCPRIZ: Defend points of view and interests of members By the food security donors & NGO group: Staple availability and accessibility for vulnerable population

15 LIMITS OdR : Exclusion of poor farmers (telephone, radio, education, literacy needed) PCPRice : Focused only on market stability issues but not on production issues No room for farmers (officialy members but rapidely ousted) The influence of PCPRice is used by head members for personnal advantage : market access, gain positions as advisors of ministries

16 CONCLUSION Success: - Market regulation and decision making tool (price stability, crisis management, warning) Limits: - Government and large operator s tool, but producers and small-scale operators excluded - Dependent on donors support