Rice farmers' organisations gain access to a significant share of institutional markets

Challenges

Mali is the second largest rice producer in West Africa after Nigeria. Rice accounts for 30% of total cereal production in the country and represents 5% of GDP (CPS/SDR, 2021). On the contrary, Burkina Faso's rice production is estimated at 0.31% of GDP, but only 1/5 of the land suitable for production is used (PNSR II 2016). Market opportunities remain to be exploited. Despite the differences, both countries share a common challenge: they can't meet their internal demand for rice.

Rice has become a strategic economic crop, and the governments of both countries have prioritised policies to promote the domestic market. However, public agricultural subsidies don't always translate into higher yields and/or better incomes for farmers because the links between farmers' organisations and the market are too weak. L'Initiative Riz (The Rice Initiative), launched by the Malian government in 2008, did not place enough emphasis on commercialising production.

We have therefore supported the national rice platforms UNPR-B (National Union of Rice Producers of Burkina) and PNPR-M (National Umbrella Organisation of Rice Producers in Mali) to access institutional markets.

In 2016, PNPR-M signed a contract with CSA/OPAM (Food Security Committee / Office of Agricultural Products of Mali) to replenish the national food security reserves for more than €2 million. In 2015, UNPR-B farmers' organisations sold 7,000 tonnes to the Ministry of Education (MENA) for the benefit of school canteens in three regions. As a result, a decree (Arrêté n°2017-002/PM/CAB) was issued by the Prime Minister in favour of local production, stating that "State structures such as school and university canteens, vocational training centres, military barracks, hospitals and prisons, among others, must give priority to the purchase of local products for their food supply".

State structures such as school and university canteens, vocational training centres, military barracks, hospitals and prisons, among others, must give priority to the purchase of local products for their food supply

Arrêté n°2017-002/PM/CAB | Prime Minister - Burkina Faso

‍

Despite these achievements, manychallenges remain to be met:

• ‍Building synergies with other actors in the valuechain, such as banks, to ensure the financial sustainability of the process and to overcome the lack of working capital of the farmers'organisation.  ‍
• Regularity: the farmers' organisation must guarantee compliance with contractual clauses, both in terms of quantity and delivery times. On theother hand, public institutions should implement an effective destocking andrestocking strategy.
• Increase transparency and participation to build long-term business relationships. All parties should be involved from the very start of the process to define their respectiveneeds.
• Develop a differentiationstrategy: farmers cannot rely on a single marketing niche. ‍
• Advocate for the formalisation and consolidation of institutionalbusiness exchanges and the development of favourable public policies.

Strategy

Farmers' unions become key players in institutional purchasing

To strengthen the role of PNPR-M and UNPR-B in their respective markets:

• In Mali, we'll help PNPR-M to better coordinate the participation of farmer organisations in the purchasing process by coaching and supporting their leaders in stock management, institutional purchasing procedures, contract negotiation and advocacy.
• A market study will be carried out to identify other institutional business opportunities. A similar study conducted in Burkina Faso after the initial experience with SONAGESS has guided and encouraged the development of new partnerships.
• In Burkina Faso, we'll focus on creating a business model between local farmers' organisations and UNPR-B's recently acquired hulling unit, the management of which has been entrusted to an independent technical team. To date, the unit doesn't have any formal contracts with FOs in the region. Thanks to the Link methodology, we're going to define and develop the services needed to ensure the unit's continued operation and the availability of sufficient and better quality stocks (broken rice <5%) to meet the needs of institutional buyers.
• Following the ministerial decree transferring responsibility for supplying schools to the municipalities, competition in the market has increased. In fact, better-equipped traders and importers have found a fertile ground for their own business. We're strengthening the negotiating skills of UNPR-B farmers' organisations to maintain or increase their share of the institutional market.

Digitalisation for a more structured supply

It can be very difficult for farmers' associations to identify and assess farmers' rice stocks because they are scattered over a large production area. We'll create a stock database by equipping and training farmers to collect and transfer data to a free data collection tool. Having accurate statistics on stock availability will facilitate negotiations between farmer organisations and their clients. As the data is analysed beforehand, negotiations are conducted on a more objective and transparent basis. Data collection will also facilitate the establishment of a traceability system, which will facilitate quality control management.

Access to finance

In Mali, we're focusing on building banking relationships so that farmer organisations can access credit in time to build their stocks. Trials have shown that timely access to credit is essential for the success of institutional purchasing by farmer organisations.

Capacity building for school cooks

In Burkina Faso, we're also organising capacity building to strengthen cooking skills. School cooks often don't know the right techniques for cooking local rice and turn to imported rice.

Advocate for government action to promote local rice.

We support the unions to persuade governments to take more permanent measures to promote local rice. For example, making the Burkinabe decree a permanent measure and ensuring access to institutional markets for school canteens. We will do this by facilitating dialogue and sharing advocacy efforts on multi-stakeholder platforms with other actors in the rice value chain. We'll also capitalise on our experience and raise the visibility of the initiative through public conferences, workshops and technical notes on project results.

Results

In Mali...

• the proportion of farmer organisations participating in institutional purchasing increased from 25% at the beginning of 2017 to 70% in 2019 and 60% in 2020, with an average turnover of €2 million per year. Farmers sold all their stocks and benefited from an average overall price increase of 17% (from 250 CFA/kg to 275-310 CFA/kg).
• FOs gained the trust of banks by providing guarantees for the supply contracts with institutional buyers. A credit line of 800 million CFA was set up by Orabank for all institutional suppliers, covering 80% of the needs of the members of IFRIZ (an inter-professional organisation of the rice sector, of which PNPR-M is a member). At the start of the project, only 10% of their financial needs were covered.
• A centralised rice collection process was implemented and tested by IFRIZ to ensure better coordination of the supply chain. The model has inspired others as the interprofessional body for maize.
  In Burkina Faso

In Burkina Faso...

• The UNPR-B hulling unit is entirely supplied by producers from the region.
• 37 communes have signed supply contracts with UNPR-B, up from six at the start of the project, for a total of more than 24,000 tonnes sold (+75%).  UNPR-B members have received marketing training and improved their stock and collective purchasing management.
• UNPR-B and CIRB (a rice sector inter-branch organisation of which UNPR-B is a member) have developed a draft law to respond to the Prime Minister's decree and formalise institutional procurement. A multi-stakeholder dialogue was organised with 76 participants to evaluate the results of the project and define a joint advocacy strategy, also in relation to the implementation of the second phase of the National Rice Development Strategy (NRDS II 2020-2030)

Overall, the interests of farmers' organisations are better taken into account in contracts, and umbrella organisations have become more reliable partners in the eyes of institutional buyers. Indeed, institutional procurement promotes dialogue between actors and strengthens the legitimacy of the umbrella organisation in the sector as a whole.