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BURKINA FASO: High rice prices despite tripled harvest

08 Dec 2008 19:37:06 GMT
Source: IRIN

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• Food and hunger

OUAGADOUGOU, 8 December 2008 (IRIN) - Despite a 2008 rice harvest over three times that of 2007, local rice prices remain out of reach for many consumers.

The 2008 local rice harvest was 235,800 tonnes of grain versus just 69,000 tonnes in 2007, according to the Ministry of Agriculture, Fisheries and Water Resources. The sharp rise is due largely to considerable government assistance and a favourable rainy season.

But despite the production increase, at 62 US cents per kilogram in November 2008, local rice prices were still 30 percent higher than in November 2007, and are not sufficiently lower than imported rice prices to encourage urban consumers to turn to local.

"I think [local] rice farmers are demanding too much," said Henry Ilboudou, a resident of the capital Ouagadougou who recently switched from local to imported. "Why do I need to buy local rice when it is just as expensive as imported rice?"

Imported rice, at 84 cents, costs some 50 percent higher than in November 2007, according to World Food Programme (WFP) figures.

Burkina Faso, like many African countries, was hit by violent demonstrations early this year due to food price hikes.

Government proposed 'fixed price'

With such high imported rice prices the Agriculture Ministry is trying to encourage people to eat local rice by making its price more competitive. Though local rice is currently cheaper than imported rice and is of high quality, Burkinabe urbanites favour imported South-east Asian rice – they consume some 450,000 tonnes a year – partly because it is easier to access than local rice, according to WFP monitoring officer Maria Luigia Perenze.

Meanwhile local rice producers tend to sell their rice to neighbouring countries and consume local cereals, millet and sorghum and fonio, Perenze told IRIN.

To spur competition the Agriculture Ministry in October issued a proposal to set a price of 22 cents per kilogram for all local rice. The proposal is being discussed and no decision is expected before 2009.

This is a sign of a new era of government intervention, following the liberalisation of rice markets in the 1990s, said Bassiaka Dao, chairman of the confederation of peasant farmers, (CFP) the country's biggest farmers' union.

Officials based the figure on a calculation that farmers spend 16 cents to produce one kilogram of rice once they've covered fertilisers, labour, transportation and pesticides, so they estimate 22 cents would give them an adequate profit margin, according to the Agriculture Ministry.

"We have made all these calculations so the product could reach the consumer at an affordable price," Agriculture Minister Laurent Sedogo told reporters at a November press conference.

Farmers unimpressed

While consumers might welcome the government-proposed fixed price for local rice, farmers are for the most part unimpressed according to the CFP's Dao. At a two-thirds price drop, such prices would put farmers off from producing rice at all, he told IRIN.

"With high fertiliser, fuel and pesticide costs, farmers are so in debt at the end of the growing season, they have to keep prices high just to make ends meet," he said. "They require a higher minimum price as an incentive."

Georges Kienou, chairman of a rice producers' association in Dedougou, western Burkina Faso, says the government can fix rice prices only if it buys at a price that works for farmers and subsidises this price to sell onto consumers. "The government needs to protect us by setting higher import taxes on rice, buying our production and selling it at lower prices to consumers," he told IRIN.

But Agriculture Minister Sedogo is adamant that lowering local rice prices will do just that – protect indigenous farmers by creating a bigger internal market for their product. "We have no reason to spoil farmers," he told IRIN. "We just need to be realistic taking into account the international context."

The ministry this year injected $13,790,000 to subsidise seeds and fertilisers, which, combined with a long, heavy rainy season, helped produce a record harvest, according to Robert Ouédraogo, director-general of production at the Agriculture Ministry.

According to Ouédraogo, even arid northern parts of the country such as Ouahigouya produced rice this year.

Introducing more competitive pricing is particularly important, Sedogo said, given that imported rice prices are projected to drop in coming months because of surplus production in Thailand, a drop that was confirmed by WFP's Perenze.

"The only way to boost the local [rice consumer] market is to fix a price that works for both producers and consumers," Sedogo said.

bo/aj/np

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