Clarisse Blancher, Cecilia D’Alessandro and Fabien Tondel, ECDPM blog, 31 January 2020
Representatives of the Economic Community of West African States (ECOWAS) and actors from the private sector will convene in Abuja on 4 and 5 February to discuss national and regional strategies to boost the rice sector in West Africa. Rice value chains can contribute to economic growth, job creation and food security. That is why, back in 2014, ECOWAS launched the Rice Offensive, an ambitious initiative aiming to sustainably realise West Africa’s rice production potential and fulfil its consumption needs.
Domestic production of rice has increased considerably in West African countries since the food price crisis of 2008 thanks to favourable market prices and also to the implementation of farm and industrial support measures. However, the region remains highly dependent on overseas rice imports, which fulfill about 50% of the consumption needs of ECOWAS countries.
Driven by strong consumer demand, especially in growing urban areas, booming rice imports have exposed West African countries to international price fluctuations and have drained foreign currency reserves. Although in many countries national policies have promoted local production effectively, governments have not paid sufficient attention to the obstacles to the marketing of locally produced rice and to consumer preferences.
Six years after the launch of the Rice Offensive, the capital of Nigeria is hosting a meeting to revive the initiative. While participants are expected to review achievements and challenges, the meeting is a precious opportunity to tackle thorny issues around the regulation of rice markets.
Early findings from an ongoing research project on rice marketing and trade in West Africa, done jointly by ECDPM and the Senegal-based think tank Initiative Prospective agricole et rurale (IPAR), offer clues on how trade and markets could better serve the purpose of this regional initiative.
Generally, tariff protection of the rice sector in West African countries is modest. Besides, it is neither well targeted at different types of rice products, nor uniformly applied, thus reducing its effectiveness. Customs duty exemptions are frequent, hardly rule-based and very often unpredictable. Differences in import tariffs and trade regulations across West African countries result in large trans-shipments of rice, often smuggled, between Benin and Nigeria for example.
This reality needs to be placed in a broader international context where major rice-exporting countries such as Thailand and India provide sizable public support for producers, which indirectly boost their exports. West Africa is a major outlet for these countries’ exportable surpluses and sometimes for old rice stocks to get rid of.
While rice yields in West Africa often compare well to international benchmarks, the efficiency of rice processing and distribution is still too low. At the same time, the lack of regulatory frameworks to set and enforce product market standards hampers the establishment of quality assurance mechanisms. That, in turn, makes West African rice much less competitive than imported rice, which is usually not only available in ample, steady quantities and affordable, but also of good quality.
Rice imported from Asia is supplied in large quantities in West African food markets. Photo by R. Raman, AfricaRice.
Furthermore, while some cross-border marketing channels for locally produced rice have emerged in several parts of the region, the development of mutually beneficial intra-regional trade is hindered by high transport and logistics costs between producing areas and consumer markets, including harassment and illegal payments along roads. This trade potential is overlooked by policymakers.
Yet, not everyone is interested in tighter regulation of rice trade. Besides market drivers, a range of private actors in the overseas rice importation and distribution sectors benefits considerably from multiple loopholes. In addition to the legitimate concerns of policymakers about populations’ access to rice and structural differences between West African countries, strong vested interests in the private – as well as in the public – sector make it difficult to change the current trading system.
Although the situation might seem inextricable at first sight, there are instances where the politics surrounding the rice sector are changing. Senegal is a case in point, with the government encouraging the structuring of the domestic rice market in combination with stricter conditionality of overseas importation.
Following discussions held during a workshop organised by ECDPM and IPAR in Abidjan last October on the approach to tackle challenges arising from the weaknesses of rice trading systems, three main areas of reform can be outlined.
The regulation of extra-regional imports, coordinated at the ECOWAS level, is the first concern. Using trade policy to provide an enabling environment for local rice value chains should not be reduced to a simple increase in tariff protection. It must be more fine-grained, using a range of instruments, more transparent and effective. A ‘floating’ tariff could be considered, that is, a variable tariff protection based on international price levels, to help stabilise prices in domestic and cross-border markets. In addition, effective safeguard measures could be useful to avoid sudden surges in imports and to counter international dumping. The use of exemptions from customs duties and other taxes must be cautious, limited as much as possible, predictable and transparent.
The second area concerns domestic market structuring and the promotion of West African rice. It includes commitments by distributors of imported rice to procure more locally produced rice, accompanied by the implementation of quality, food safety and environmental norms as well as mechanisms guaranteeing viable, fair and steady pricing for all actors along the value chain.
The third area is the facilitation of intra-regional trade, which is actually already a component of the Rice Offensive. Making regional trade easier and less costly, particularly within sub-regional trade basins, would allow for better exploitation of complementarities in production across countries. The map below illustrates actual trade flows of locally produced rice in a particular corridor, the central trade basin, between Burkina Faso and Mali.
Rice surplus and deficit areas, trade flows and markets (assembly, wholesale and retail) contributing to supply chains for locally produced rice. Sources: Adaptation from FEWS NET maps and authors’ own research. To download, please click here.
The relevance and effectiveness of particular measures to promote rice sector reform depend significantly on contextual factors. Pursuing the development of the rice sector will require considering its political economy in different national and cross-border contexts, to identify actors in favour of change and appropriate modalities of intervention.
The three policy areas mentioned above show potential synergies. A multi-sectoral approach is needed to ensure that agricultural, industrial, trade and consumer-oriented policies, are elaborated jointly, with a common purpose, instead of undermining each other.
Lastly, the structuring and regulation of markets rest not only on state intervention but also on the involvement and the corporate responsibility of the private sector. Sustained dialogue and coordination among diverse actors is necessary for a better understanding of key challenges and intervention opportunities, and for gathering broader support for reform. The Abuja meeting on the Rice Offensive will hopefully lead the way towards solving this puzzle.
The opinions are those of the authors and not necessarily those of ECDPM.
Photo courtesy of CTA ACP-EU via Flickr.
Intern Sustainable Food Systems | Economic and Agriculture Transformation".
Junior Policy Officer Sustainable Food Systems | Economic and Agricultural Transformation Programme
Policy Officer Sustainable Food Systems | Economic and Agricultural Transformation Programme