Developing Sustainable Rice Value Chains in Senegal: The Role of Policy Sequencing. International Consortium on Applied Bioeconomy Research (ICABR)
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1 Developing Sustainable Rice Value Chains in Senegal: The Role of Policy Sequencing Matty Demont and Amy C. Rizzotto Africa Rice Center, SaintSaint-Louis, Senegal 15th Annual Conference on Sustainability and the
2 Introduction 2008 food crisis prices skyrocketed Senegal develops GOANA program Ambitious Self-sufficiency in rice in ,000 t in Mio t in 2015 Focus on irrigated rice in Senegal River Valley (SRV) Productivist No end-market focus
3 Introduction However, recent surveys indicate that a substantial share of urban consumers is unaware that SRV rice even exists. Those who are aware perceive grain quality of SRV rice to be inferior to that of imported broken rice (Fall et al., 2007) Burning question: If production does increase at the rates prescribed in GOANA plan, who will buy the rice?
4 Introduction FC CFA/kg Month/year Imported broken rice Conventional SRV rice
5 Research hypothesis Senegalese policy makers failure to develop competitive value chains for SRV rice can be partly explained by poor policy sequencing following the abrupt liberalization of the rice sector in the early nineties Policy sequencing = the order in which either macroeconomic policy actions or specific reforms are introduced
6 Rice value chains VC = strategic vertical alliance between independent business organizations within the supply chain Strategic concept chain competitiveness (e.g. local versus imported rice chains) Governance (e.g. quality), catalytic firms VC upgrading = key to competitiveness Participatory stakeholders involvement End-market focus
7 Experimental auctions Starting from the end-market Measuring consumer surplus (value, willingness-to-pay) in end-markets of new products or quality attributes new marketing strategies (standards, certification, labeling, branding, g eneric promotion) Hypothesis = can trigger value chain development or strengthen value chains
8
9
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11 non-purified rice from SRV 11
12 imported Thai 100% broken rice 12
13 quality SRV rice 13
14 quality SRV rice labelled Rival 14
15 40% 35% 30% 25% 20% 15% 10% Imported Thai broken rice +17% 5% 0% Breakdown of the average price premiums paid by consumers for alternative broken rice types relative to conventional SRV rice
16 40% 35% 30% 25% 20% 15% 10% Imported Thai broken rice +17% FCFA/kg % 200 0% Month/year Imported broken rice Conventional SRV rice Breakdown of the average price premiums paid by consumers for alternative broken rice types relative to conventional SRV rice
17 40% 35% 30% 25% Unlabeled quality SRV broken rice +15% 20% 15% 10% Imported Thai broken rice +17% FCFA/kg % 200 0% Month/year Imported broken rice Conventional SRV rice Breakdown of the average price premiums paid by consumers for alternative broken rice types relative to conventional SRV rice
18 40% 35% Labeled quality SRV broken rice +6% 30% 25% Unlabeled quality SRV broken rice +15% 20% 15% 10% Imported Thai broken rice +17% FCFA/kg % 200 0% Month/year Imported broken rice Conventional SRV rice Breakdown of the average price premiums paid by consumers for alternative broken rice types relative to conventional SRV rice
19 Policy lessons from Senegal Investment in local rice quality tailored to end-market standards should precede any large-scale investments in agricultural productivity in order to efficiently channel the generated surplus to end-markets where it has to substitute for rice imports and enter the long-term consumption habits of urban consumers
20 Policy lessons from Senegal JICA Rice Initiative: launched SENRIZ in 2005 failure, label was not picked up due to lack of scaling-up and advertising PINORD Platform: launched Rival in tons 6,200 tons (< 1%) in 2010: slow scaling-up
21 Policy lessons from Senegal Investment in rice quality, certification, and branding should precede but timely be followed by scaling up and advertising in order to timely capture and secure a profitable, competitive and sustainable share of rice in urban end-markets Scaling up (in space) and stabilizing (in time) supply are important prerequisites before rice branding and advertising investments can impact large urban end-markets
22 Conclusion Policy sequencing = necessary for upgrading SRV rice value chains Proposed three-stage policy sequence for upgrading SRV rice value chains: Quality enhancement, certification, quality contracts, labeling, branding Value-adding Quantity increase, scaling up, aggregation and storage infrastructure Supply-shifting Advertizing and generic promotion, extending reach, increasing value Demand-lifting Governance Governance?
23 Experimental stakeholders workshops Gather representatives from each stakeholder in the value chain Divide in groups containing complete representation of value chain Design a virtual enterprise whith principal objective = market a quality rice brand Design strategy to achieve this objective Define partnerships, roles for stakeholders, governance, role of the government
24 Results: Stakeholders workshop SRV rice value chain, Dakar, 10 March 2010
25 Results: Stakeholders workshop SRV rice value chain, Dakar, 10 March 2010 ddd 15th Annual Conference on Sustainability and the
26 Rice sector development hubs Partnerships that involve large groups of farmers (3-5,000 farmers) and other value chain actors, such as rice millers, input dealers and rice marketers to enhance the productivity, competitiveness and sustainability of rice-based value systems Testing grounds for new rice technologies Following reverse-research approach, i.e. starting from the market
27 Rice sector development hubs Proof of concept approach to rice value chain development Based on innovative approaches to collective action and governance Objective = produce rice or rice-based products that respond to consumer preferences in urban and rural markets in quantities that are of interest to rice traders, who would usually import such products
28 Rice sector development hubs Represent key rice ecologies and different market opportunities across African countries Linked to major national or regional rice development efforts to facilitate out-scaling The first Hubs are being established in the Senegal River Valley and the Bagré irrigation scheme in Burkina Faso with funding from the Syngenta Foundation
29 Consumption Figure 1: Value chain map of imported and SRV rice Consumers Retail Retailers (boutiques) Wholesale/ distribution Large informal traders/wholesalers (grands commerçants) Durabilis Terral Formal traders/wholesalers (grossistes) Trading (milled) Importers N=8 International brokers N=12 SPCRS Small informal traders Bana- (bana-banas) Banas Separation Research & extension Milling Trading (paddy) Storage Production Land management Imported rice Q=800,000 MT Imported rice Service Mills storage Private operators N=1,922 (2003/04) Q=75,544 MT (2008/09) 12,859 ha (2008/09) Industrial mills N=2 operational & 2 non-operational (2008/09) semiindustrial mills N=19 op l & 4 non-op l (2003/04) storage Service mills (predominantly small and informal) N=351 operational & 112 non-operational (1996) Public irrigation schemes (consisting of autonomous production groups) N=908 (2003/04) Q=147,550 MT (2008/09) 24,560 ha (2008/09) PINORD Rival Soc ciété de Promotion et de Commerc cialisation du Riz Sénégalais Seed supply Commercialized SRV rice self-multiplied seed Seed multipliers self-multiplied seed
30 Thank you! Merci! Center of Excellence for Rice Research
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