The second post of this blog series illustrated the potential for poverty reduction through value chain development (VCD) in Africa. This is an approach that Côte d’Ivoire hopes will work for its rice farmers. During the 2008 world food crisis, rice prices tripled in a matter of months, and the Government of Côte d’Ivoire got to work on a National Rice Development Strategy. With more than half of the country’s rising demand for rice being met by imports, which could in principle be produced locally, the strategy aims to create self-sufficiency when it comes to rice production.
The strategy lays out a VCD approach driven by the private sector, with the rice mills as entry points. It focuses on strengthening market development while at the same time improving the productivity of rice farmers and the quality of rice processing. This should allow the domestic rice value chain to produce higher volumes of quality white rice to meet the unmet urban demand.
Rice as food and cash crop
The rice value chain has a high potential for inclusive employment and income generation. Rice is grown across the country, including by the poorest households. Rice cultivation is labor-intensive, and large differences in net returns per hectare in similar agro-ecological conditions across Côte d’Ivoire suggest substantial room for productivity gains. Also, developing the rice value chain can create new off-farm jobs, including in input provision, machinery services, at the rice mills, in marketing and in distribution. But VCD is more difficult for staple crops. In the case of rice, smallholder farmers are unlikely to uphold a contract they have signed with millers if farmers are not directly paid at harvest or if other buyers pay higher prices at harvest. Similarly, mills may opt not to honor the prices stipulated in the contract when the market price drops.
A pilot project in Côte d’Ivoire hopes to tackle the question of what an effective VCD intervention could look like for rice, especially when trying to link poorer farmers to expanding markets. The pilot, which will begin this spring, simultaneously supports rice mills and smallholder rice farmers. Mills will be granted access to working capital on a commercial basis by a bank to provide farmers with credit to buy inputs, and to buy their paddy rice in cash at harvest. Mill owners, managers and employees receive management training to improve their operating procedures, commercialization practices and financial management and strengthen their market linkages.
The combination of these interventions will allow the mills not only to meet local demand for white or processed rice, but also to serve the more demanding, larger urban markets. To reach these higher value markets, however, the mills require a steady supply of quality paddy rice from famers. So to boost productivity, the pilot also provides extension services to farmers to help them apply modern agronomic practices. With their productivity increasing, farmers will see their food security and incomes grow.
Reaching the poorest
VCD is not just uncommon for staple crops. This pilot is also novel in the way that it is explicitly targeting the poorest rice farmers. Research shows that cash transfers to poor households increase their expenditures for food, education and other basic items. But cash transfers alone are not enough. Smallholders also need support measures that increase their productivity and access to markets that are developed enough to buy their products. The pilot anticipates helping these farmers jumpstart a process out of poverty by combining cash transfers and VCD.
Future blog posts will keep you posted on how the intervention unfolds in practice, how it affects smallholder rice farmers’ earnings, and what this means for poverty reduction strategies in Africa.
This is the third post in a blog series exploring why 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. The pilot will be undertaken by a consortium of actors, including the Productive Social Safety Net project of Côte d’Ivoire, the National Rice Development Agency (ADERIZ, Agence pour le développement de la filière riz), the International Development and Research Center (CIDR, Centre International de Développement et de Recherche), the Center of Micro-Industry Promotion and Rural Development (Centre de Promotion de la Micro-Industrie et du Développement Rural, CPMI-DER), the microfinance institute UNACOOPEC-CI, the Catholic University Leuven, and the Jobs Group of the World Bank.
Follow the World Bank Jobs Group on Twitter @wbg_jobs.
Rising with Rice in Côte d’Ivoire 1: How local farmers and millers are leading the way
Rising with Rice in Côte d’Ivoire 2: More and better jobs by connecting farmers to markets
Rising with Rice in Côte d’Ivoire 4: Rice in Côte d’Ivoire is Big Business That Depends on Small Firms