Th3_Comparative analysis of rice milling strategies: Evidence from rice millers in Benin
3rd ARC on
“Rice Science for Food Security through Smallholder
and Agri-business Development in Africa”
Comparative analysis of rice milling strategies:
Evidence from rice millers in Benin
Data and Methods
Conclusions and recommandations
Vincent Flifli, Economist
Promoting domestic rice production is seen today as an effective means to reduce
food insecurity in West Africa. And since 2008 rice crisis many agricultural policy
measures focused on promoting of domestic rice production strategies.
But, the quality of locally produced rice obtained after milling does not match
often with consumers’ preference, because it contains many chips and color
Besides, recent studies have emphasized in many African countries on the
importance of post-harvest activities, especially milling activity, in increasing rice
Different milling strategies are used by millers in their business. The main strategies
include fee-based milling services and paddy buying-milling-selling.
Background continues & research questions
Furthermore, a previous sturdy underlined that rice millers who purchase paddy have
a direct control on the type of paddy they process and bear the risks of selling a type of
rice that does not respond to market’s requirements and that the issue of rice quality is
actually only relevant to them (Combiners).
Unfortunately, most of the millers do not systematically combine milling with trading
(i.e. purchase paddy and sell milled paddy) but milling paddy for a fee (i.e. a service
provider), (Lançon et al, 2003:2).
This situation involves the following questions:
why millers do not purchase paddy and process it with a required care for selling?
Which one of the both types of activities increases better millers’ welfare?
Said in another word, what are the factors that determine the economic attitude of
millers and therefore the level of purchased paddy milled?
Determine factors that could explain in one hand the economic behavior of millers
faced with the alternative types of activities such as “providing only milling service
for a fee” and “purchasing paddy and mill it for selling” and in the other hand the
level of purchased paddy they mill.
Specifically it aims at:
Identifying factors that influence the millers’ decision as to the question whether
to buy paddy and sell milled rice or to provide only milling service on fee basis.
Identifying factors that influence the level of quantity of purchased paddy milled.
Computing the gross profit of rice milling activity for both categories of millers
and compare them.
Data and method
AfricaRice, INRAB and NASS
sample included communes 16
• gross profit of both
types of activity
Data and method continues
The selection equation of Heckman two-stage model
, i 1, 2,....n (1)
1if , y 0
0if , y
P revioussalary activity
trade as main activity
The Regression equation (OLS)
per day operationtime
Profit calculation of milling activity
Gross profit V C
nitial cost - Salvage cost
Figure1. Map of millers’ characteristics
Table 2 Estimate results from Heckman two-stage model
Coefficients and SE effects
Length of service
Previous salary activity 8.110701***
Trade as main activity
Per day operation time
Standard errors in parentheses SE : Standard Errors
*** p<0.01, ** p<0.05, * p<0.1
The profit computation
Table 3 operating accounts
Parboiled rice Qty (kg)
Non-parboiled rice Qty (kg)
Price of parboiled rice (USD/kg)
Price of non-parboiled rice (USD/kg)
Milling fee (USD/kg)
Depreciation costs (USD)
Repair and maintenance costs (USD)
Expenditure in purchasing paddy (USD) 44441.74
Balance (for total Qty)
Source: own elaboration, NC: not concerned
The quality of locally produced rice remains far below the expected quality more
exigent that urban consumers are seeking
There are two types of millers in milling sector in Benin: miller-traders and millersonly.
We suggest the organization an upgrading from time to time for processors in order
to allow the new comers to have the required knowledge.
Any policy that create an enabling environment for easy access to capital needed is
to encourage so to allow processors to invest in improved technologies.
Finally, It is also necessary to create an incentive environment especially financial
one to bring millers to start purchasing paddy.
Thanks for your
Vincent Flifli, Economist