Will the Government of Burkina Faso buy up the rice harvest at knock-out prices* ?
The clash seems inevitable. A week ago we reported on the launch of the Campaign for Economic Justice . On this occasion rice growers and women in charge of processing gave their views on the marketing of local rice. The Ministry of Agriculture had been invited but deigned not honour the invitation. Perhaps understandably, since the Ministry has its own ideas on the marketing issue. Its proposals and those of rice growers and women processors are very far apart.
Before commenting on the Government’s position as a follow-up of abc Burkina 302 , let us first look at the message from the women involved in parboiling. The message was read out at Bama on October 16th by the president of the Parboilers’ National Union, Mrs Ramata Soré. She started by introducing herself as the mother of several children of school age – to indicate that she needed an income to pay their school fees.
“We have had some difficult years, when nobody wanted to buy the paddy rice our husbands are growing. It is we, the women, who have manage to find a market. Through our own work we have produced parboiled rice which has sold well, because everybody has found it very good. We encourage you to eat more of our rice.
Our rice is even sold to Mali! But we have had to work hard and have only had our own cauldrons to boil in.
Today we are happy, because we can see that everybody takes an interest in our rice. With a little bit of help we can do more and better. We can do more, because we are now organised in Bama, Bazon, Mogtédo, Sourou and Bagré. We want to process all the paddy rice from our fields and with your support we will be able to do it. We only need some real help.
a) We wish to make sure that not one single kilo of paddy rice leaves our rice fields unprocessed, just as we formerly did not want to let one ear of millet get our of our village! To succeed, we need a loan, to enable us to buy all the paddy rice available and to store it (the stocks will serve as a collateral for the loan). We will pay back by weekly instalments. This will allow us to take out the corresponding quantity of rice from the stocks. We then parboil it and sell it. Thus we can pay back another instalment and take out some more rice and continue our work. Our profits will cover the things we need for our families …
b) To be able to parboil all the available paddy rice, we need several modern stoves. With these we can handle several tons of paddy rice a day. If , in addition to that, we can find sorting grids, drying units, canvases, and attractive packaging bags, clearly labelled, for all to see that they contain rice from Bama, parboiled by our association – then we are certain that soon everybody in Burkina will want our rice.
If we can buy paddy rice at 175 CFA francs/kg, we can promise customers very good parboiled rice for 340 francs/kg. Just give us a hand in finding the necessary tools of our trade, worthy of modern Burkina.”
Some of the Government proposals
These proposals are extracts from a document produced by the Ministry of Agriculture: “Information note on the organisation of the marketing of rice of the 2008/2009 harvest” .
1. The good news
For the first time the Government mentions the introduction of a minimum price for paddy rice.
2. The bad news
Whilst rice farmers have demanded to be guaranteed a minimum price of 175 francs/kg, the government wants to impose 115 francs.
What is then the significance of such a minimum price, when the same document recognises that farmers already at present can sell their paddy rice for 150, 175 or even 190 francs/kg?
This strangely reminds us of the words of Thai rice farmers last year: “The government is indeed setting a minimum price. But it is of no help to us. It is far too low. It is made up in agreement with the banks and the traders! Not with the farmers!"
3. Some more good news
The government recognises the important contribution of the women workers in processing paddy rice, collected and bought from the farmers by co-operatives and proposes setting aside a quota for them.
4. Some more bad news
The government does not pledge the necessary support to the women so that they will actually be able to buy the quota! Which is a mandatory 15%! In spite of the fact that the women of Bama would like to transform all the rice from their district themselves. In Sourou, where the women workers have organised themselves more recently, they nevertheless has set as their target the processing of half the rice produced in the area. Moreover, nowhere in the document is there a reference to the higher nutritional value of parboiled rice as compared to white rice. Nevertheless, it is that same government which keeps repeating to all and sundry that it wants to fight poverty in the rural areas. Giving support to these women would indeed help their dependants, 15 to 20 000 families, or soon twice as many, if their organisations keep growing at the present pace. That would really curtail poverty in the rural world. But to give support to traders means helping no more than 15 families. The government is making a bizarre choice here.
An amazing analysis
Page 10 of the Ministry’s document (click here to download) is most interesting. First there are three simulation models, based on the buying price of paddy rice on markets in three different regions of the country. The results are given in a table. The medium case, based on the assumption that traders/transformers buy paddy rice from farmers’ co-operatives at 180 CFA francs/kg (compared with the 175 francs the farmers propose), results in a selling price to the consumer of 19 990 francs/50kg of white rice. (or 17 500 and 20 750 in the two other examples)
The document concludes (in bold in the original text):
An analysis of the price structures seen in the table above, show that if the minimum price for paddy rice bought directly at the field, were to be indexed along the prices on the national market of October 2008, white domestic rice would not be competitive versus imported rice.
All seems to indicate that the Government is intent on forcing farmers to sell their paddy rice at 115 francs/kg.
How can they say that the current price is not competitive, when farmers already and easily find buyers for their rice?
How can they say that these prices are not competitive when Thai rice, less than two years old, is sold at 37 500francs/50 kg in the shops? And when old imported broken rice costs 22 500/50 kg? As for white rice, one of the big traders in the centre of town says that he has not even got any!
Reading through this 20 page document fills me with anger and indignation. The overwhelming impression is that the Government has linked hands with business and traders to rake in all they can from the rice farmers. It thus risks harming a process already in motion, which would quickly lead to self-sufficiency in rice. It would be amazing, if farmers will let the State strip them of their harvest at knock-out prices, when the cost of imported rice now makes domestic rice profitable.
Koudougou, October 27th 2008
* Knock-out price = selling or purchasing price, far below the true value of the goods