3rd Africa Rice Congress Theme 3: Rice processing and marketing Mini symposium: improving rice processing technologies in Africa Author: Flifli et al.

1. 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
plan
 Background
 Objectives
 Data and Methods
 Results
 Conclusions and recommandations
Vincent Flifli, Economist

2. Background
 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
mixing rice.
 Besides, recent studies have emphasized in many African countries on the
importance of post-harvest activities, especially milling activity, in increasing rice
quality.
Different milling strategies are used by millers in their business. The main strategies
include fee-based milling services and paddy buying-milling-selling.

3. 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?

4. Objectives
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.

5. Data and method
AfricaRice, INRAB and NASS
sample included communes 16
northwest
•
Notheast
(MCA)
•Heckman two-stage
model
• gross profit of both
types of activity
Centre
South

6. Data and method continues
The selection equation of Heckman two-stage model
Yi
Xi
i
i
, i 1, 2,....n (1)
*
i
*
i
1if , y  0
(2)
0if , y
O
Yi
Xi
P revioussalary activity
Modern tec
hnology
trade as main activity
Constant
The Regression equation (OLS)
Qi
zi
i
i
machine capacity
lenghtof service
(3)
i
i
N (0,
i
N (0,1)
corr (
i
,
i
)
Zi
per day operationtime
modern technology
Constant
)
Profit calculation of milling activity
n
Gross profit V C
PQ
pi qi
i
Depreciation cost
nitial cost - Salvage cost
Machine life

7. Results
Figure1. Map of millers’ characteristics

8. Results continue
Table 2 Estimate results from Heckman two-stage model
First stage
second stage
Regression equation
Selection equation
Paddy purchase
Exogenous variables
Quantity milled
Marginal
Coefficients and SE effects
Exogenous variable
Machine capacity
0.2983588***
(0. 0175215)
Length of service
Previous salary activity 8.110701***
1.572335 ***
(0.6043054)
Modern technology
7.667977***
Trade as main activity
8.119137***
(0.673198)
Per day operation time
1.501033***
(0.5602881)
1.571992 ***
0.1060519
8.904778
(90.4356)
Modern technology
737.239
(894.287)
(0.5893665)
constant
2.629266***
Constant
(0.2861096)
793.5082
(933.5542)
0.3888559*
(0.1816568)
Standard errors in parentheses SE : Standard Errors
*** p<0.01, ** p<0.05, * p<0.1
rho

9. Results continue
The profit computation
Table 3 operating accounts
Processors
Miller-traders
Millers-only
Items
Parboiled rice Qty (kg)
11600
41476.57
Non-parboiled rice Qty (kg)
62080
49842.29
Price of parboiled rice (USD/kg)
0.69
NC
Price of non-parboiled rice (USD/kg)
0.68
NC
Milling fee (USD/kg)
NC
0.04
Depreciation costs (USD)
11.1
6.21
Repair and maintenance costs (USD)
362.71
728.02
Expenditure in purchasing paddy (USD) 44441.74
NC
Balance (for total Qty)
5226.154
2918.52
Balance (USD/kg)
0.071
0.032
Source: own elaboration, NC: not concerned

10. Conclusions
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.

11. Thanks for your
attention
Vincent Flifli, Economist