It is rice harvesting time in the Hambol Region of central Côte d’Ivoire, and Sali Soro is making sure this important day goes off without a hitch. A female member of Coop-CA Hambol, a regional rice cooperative in the Lopé lowlands, Sali managed to rent one of the few threshers available in the area. Workers brought the machine to her plot in the early morning and the rumble of the thresher has filled the air ever since.
At the end of the day, Sali will bring the harvested paddy rice to the nearby mill in the small town of Katiola. It’s a mill she is quite familiar with: Throughout the rice production cycle, Sali received not only seeds and fertilizers from the mill but also in-person agronomic advice from an extension agent.
When Sali sells her paddy rice to the mill, she’ll be reimbursing for these inputs in kind—an arrangement she agreed to contractually at the start of the season. And when she brings her harvest to the mill, Sali hopes to be paid on the spot for any rice that exceeds the value of the inputs she received from the miller.
For rural farmers, cash is king
That goal is not always attainable. One key challenge faced by most rice mills in Côte d’Ivoire, is the ability to pay farmers like Sali for her paddy rice at the time of the harvest as promised.
That’s because most mills here start processing paddy rice when they have an immediate demand for white rice from a distributor. And mills like Katiola typically don’t get paid until a distributor has sold the processed rice on the market, a transaction that can take up to two months.
The arising liquidity constraint not only makes it difficult for mills with limited working capital to pay farmers at harvest, but also prevents them from buying bigger volumes of paddy rice to access larger, and potentially higher value markets in urban areas.
As a result, the main competitors for paddy rice, according to Katiola mill director Zié Coulibaly, are not competing millers from the same region, but traders who come all the way from Bouaké, 55 kilometers south. These traders come with large amounts of cash and although they offer prices well below the ones paid by local mills, farmers in immediate need of cash to make ends meet are tempted to sell.
Consequently, they don’t reimburse the mill for the fertilizer, seeds and other inputs they received. Moreover, because of the difficulties they face in accessing agricultural inputs and the low prices they fetch, smallholder farmers feel discouraged to grow rice. It shows.
Over the last two decades, Côte d’Ivoire has been importing more than half of its growing demand for rice. At the same time, there is a huge potential for local rice mills to access new markets, especially in urban areas where consumers prefer local rice but buy mainly imported varieties.
One can’t go at it alone
The challenges faced by the different actors within the rice value chain in Côte d’Ivoire while distinct, are also interconnected. How could we address these constraints so that the chain can reach its full potential and contribute to poverty reduction through more and better jobs?
Our work in similar contexts has given us some ideas. An integrated approach that simultaneously addresses several of the constraints is key.
This is the first post in a blog post series exploring why and how developing the rice value chain can improve job opportunities for the rural population in Côte d’Ivoire. It draws from the literature as well as extensive consultations with public and private stakeholders of the rice value chain and field visits in Côte d’Ivoire.
Follow the World Bank Jobs Group on Twitter @wbg_jobs.
Rising with rice in Côte d’Ivoire 2: More and better jobs by connecting farmers to markets
Rising with rice in Côte d’Ivoire 3: The contours of a pilot project
Rising with Rice in Côte d’Ivoire 4: Rice in Côte d’Ivoire is Big Business That Depends on Small Firms