As COVID-19 threatens rice imports from Asia, West Africa has an opportunity to reignite its ambitions of a regional value chain. But this would require coherence in policies and collective action.
As the COVID-19 pandemic reaches African shores, countries are grappling with questions of food security. This seems to confirm a longstanding concern among many countries to reduce their reliance on food imports. Take the example of rice in West Africa. In the Economic Community of West African States (ECOWAS) up to half of the regional rice consumption needs is met through imports. This external reliance is what led ECOWAS countries to agree to a ‘Rice Offensive’ in 2014, to boost production in the region. It is also behind the Nigerian border closures seen last year.
Regional value chains have often failed to take off because national interests trump regional agendas. But at extraordinary times like these, there is a case to give precedence to regional strategies rather than narrowly focusing on national responses.
Expect rice shortages
Most West African rice supplies come in from Asia, but with COVD-19, rice exports are stranded due to labour shortages and logistical disruptions following lockdown measures. While there is enough production, the challenge is getting the food to where it is most needed. Moreover, some countries are resorting to export restrictions and domestic stockpiling to guarantee their own supply in the turbulent months to come. The negative supply shock may persist, as some farmers in Asia switch to other, less labour-intensive crops, that depend less on lockdown-affected migrant labour.
Disruptions in the supply have sent rice prices to a seven-year high, fast approaching the levels observed in 2008 (see World Bank data), and it seems likely that there will be shortages in the rice supply for some time to come. Effects of a higher price will especially be felt in ECOWAS countries, who together spent around US$4 billion in importing their rice in 2018, according to data calculated by ITC. With limited inventories in these countries, prices will come under pressure. In several countries, food availability is decreasing while prices increase, with rice prices in some countries like Senegal up by 16%. The Consumer Price Index for food in the eight-country West African Economic and Monetary Union (or UEMOA – a sub-group of ECOWAS countries) is at its highest since 2008. Keen to avoid a repeat of the 2008 food price crisis which saw widespread protests and social unrest, leaders are scrambling to find solutions.
The West African story
Local varieties like Gambiaka rice are competitive relative to imported rice of similar quality. Demand for local varieties is not lacking – urban consumers are even willing to pay a premium on local rice, should quality improve. West Africa is also showing the beginnings of a regional rice value chain. For instance, some locally produced Burkinabe paddy as well as parboiled rice is regularly, but informally, exported across the border to Mali and Ghana. This is not an isolated case, as several such cross-border flows exist in the region (see map below prepared by my colleagues from their ongoing research).
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 ECDPM research. To download, please click here.
However, the levels of regional trade remain much lower than imports from Asia. Tapping into the regional market would require a significant jump in production. West Africa also loses out due to low efficiency of rice processing and distribution. These are in addition to logistics constraints and unfavourable trade policy that make the development of a regional value chain challenging.
Rice is a staple in West Africa, and a food security issue – a high, and rising, proportion of people are undernourished (over 56 million people, or 15% of the region’s population). According to several studies, the rice quantities that are currently imported, could be grown and processed within the region. Regional production has been rising – by an estimated 11% in the 2020 agricultural season – though it is unevenly distributed.
As the Rice Offensive approach recognises, rice holds significant potential as an import-substituting regional value chain where complementarities could be sought so that local or regional processing matches the burgeoning demand. Equally important would be the facilitation of cross-border trade so that rice from surplus areas can be traded with the deficit regions.
But rice imports have also been a source of rent extraction and powerful importers have influenced policymaking. With these imports drying up and the price of imported rice mounting, however, the local rice sector may receive a boost. Interests could be aligned so that regional rice processing flourishes. But what measures can the region take to boost production and processing of the regional staple in the immediate future?
Measures for supply response – work together and build on available capabilities
Paddy production needs to be boosted to use the full processing capacity at the regional level. This would finally allow the region’s processors to benefit from economies of scale. National processes will precede such regional coordination. Beyond communicating the message to farmers before the next planting season begins – ideally through some type of purchase guarantees – it would also be essential to ensure that they also get the necessary inputs for production such as seeds and fertilizers. How can this be ensured?
Countries have been innovative in finding solutions to problems they face given their particular context. For instance, in Senegal, a memorandum of understanding between several stakeholders, both public and private, is used as a basis to promote the marketing of locally produced rice while ensuring improvements in quality standards. Collective action, by building on the strengths of each actor, will be necessary to overcome rice supply constraints faced regionally. This would require specific and credible pacts between the different actors that take the entire value chain into account. Governments may want to discuss solutions with traders on how best to distribute inputs and ensure a smooth flow of paddy for processing locally or regionally. Formulation and implementation of product standards can enhance the quality of processed rice. Moreover, processed rice also needs to reach the market at the right time. Promotion of and support for private investments in the value chain will be necessary to meet these goals. How countries achieve this may vary from one country to the next depending on relations between the different stakeholders, and needs further research.
Dangers of a lack of regional collective action in times of crisis
The negative effects of the COVID-19 pandemic may be further amplified by national policy responses to the initial health crisis. In Nigeria for instance, there are reports of rice paddy not reaching domestic milling facilities as a result of unclear communication regarding restrictions on movement. Coordination between states is even more challenging. Countries have been swift in announcing border closures, but there are also calls for the movement of essential goods to continue across borders unhindered. Countries with rice deficits will face extraordinary pressure on price if their access to markets is curbed.
Currently restricted movement across borders may disrupt cross-border trading of both rice and inputs, posing a threat to the development of a regional value chain. In the absence of cross-border markets, local producers and processors along border areas could go out of business. More importantly, blocking these supply chains can actually exacerbate food insecurity. Instead, these complementarities need to be fully exploited.
As every country faces very real and serious risks to food security, now, more than ever, is the time to come together and find a common solution. National strategies, which can vary from country to country, can feed into regional ambitions.
Photo courtesy of Jelle Goossens via Flickr.