This webinar on Oct. 27, 2020, organized by the CGIAR Research Program on Policies, Institutions, and Markets (PIM) and Food Security Portal, presented findings from the recent CGIAR research on food value chains in three regions. Full recording and more details available at https://bit.ly/341JAiO

1. W E B I N AR
Strengthening food value chains
October 27, 2020 / 10:00 – 11:00 AM EDT
PRESENTERS:
Matty Demont, International Rice Research Institute (IRRI)
Trent Blare, International Maize and Wheat Improvement Center (CIMMYT) / University of Florida
Tanguy Bernard, International Food Policy Research Institute (IFPRI) / University of Bordeaux
MODERATOR:
Nick Minot, IFPRI
DISCUSSANT:
Frank Place, CGIAR Research Program on
Policies, Institutions, and Markets (PIM)

2. RICE VALUE CHAIN UPGRADING IN WEST AFRICA 11
Value of rice production in US$/ha (Nelson, 2010)
Matty Demont,
CGIAR Research Program on Rice Flagship Leader “Upgrading rice value chains”
International Rice Research Institute (IRRI), Los Baños, Philippines
WEBINAR “STRENGTHENING FOOD VALUE CHAINS”, CGIAR RESEARCH PROGRAM ON POLICIES,
INSTITUTIONS, AND MARKETS (PIM) AND FOOD SECURITY PORTAL, 27 OCTOBER 2020.
Rice value chain upgrading in West Africa

3. 2RICE VALUE CHAIN UPGRADING IN WEST AFRICA
Global Context
y = 774x + 8.15
R² = 0.92
0
100
200
300
400
500
600
0 10 20 30 40 50 60 70 80
Ricepaddypercapita(kg)
Percentage of total crop area harvested to rice
Malaysia
Philippines
Indonesia
Myanmar
Cambodia
Lao PDR
Thailand
Vietnam
PHP/kg milled rice
Philippine
s
Indonesi
a
Thailan
d
Vietnam
Drying cost 0.26 0.62 0.33 0.52
Transport cost 2.09 2.22 1.08 1.76
Milling cost 1.38 1.22 0.89 0.93
Storage cost 0.19 0.40 0.20 0.23
Packaging cost 0.45 0.24 0.14 0.22
Cost of working
capital 0.27 0.28 0.09 0.11
Total marketing cost 4.63 4.97 2.73 3.78
Returns above major
cost 4.43 0.65 2.54 0.77
Gross marketing
margins 9.06 5.61 5.27 4.55

4. 3RICE VALUE CHAIN UPGRADING IN WEST AFRICA
West Africa
Competitiveness of domestic vis-à-vis imported rice
Coton…
Bohic…
Malanvi…
Abuja
Makurdi
Lafia
Abidjan
Gagnoa
Daloa
Freetown
Makeni
Bamako
Sikasso
Koutiala
0%
20%
40%
60%
80%
100%
0 200 400 600 800 1000 1200 1400
Marketshareof
localrice(%)
Distance to sea port (km)
0 1000 2000 3000 4000 5000 6000
Guinea-Bissau
Gambia, The
Sierra Leone
Niger
Guinea
Ghana
Senegal
Quantity (thousand tonnes)
Production
Gap between demand and
domestic supply

5. 4RICE VALUE CHAIN UPGRADING IN WEST AFRICA
West Africa
Comparative advantage in demand

6. 5RICE VALUE CHAIN UPGRADING IN WEST AFRICA
National Rice Development Strategies
Coalition for African Rice Development
(CARD)

7. State of rice value chain upgrading in 15 countries in West Africa, 2009–2019
Country
Number of investments in
industrial and semi-industrial
mills that were operational in
2019
Aggregate
upgraded
milling
capacity
(t/h)
Origin of
investment
s
Vertical coordination Import exposure
Average annual
rice supply
2009–2018 (103
tons)
Contract
farming
(producers)
Vertical
integration
(ha)
Import
barriers
2008
import bill
(106 US$)
Nigeria 24 industrial mills 177 FDI, DPI >3,000 >20,400 None 772 3,512
Senegal
15 industrial & semi-
industrial mills 60 FDI, DPI 3,500 3,590 None 645 438
Ghana
1 industrial mill
3 semi-industrial mills 26 FDI, DPI 4,000 750 None 216 333
Mali 4 industrial mills 20 FDI, DPI n.a. 3,200
Physical &
cultural 66 1,360
Côte d’Ivoire
2 industrial mills
1 semi-industrial mill 15 PI, DPI
10 (experi-
mental) – Cultural 472 1,024
Burkina Faso
1 industrial mill
1 semi-industrial mill 7 DPI 140 – Physical 56 194
Liberia 2 semi-industrial mills 4 DPI, PI – – None 75 174
Niger 2 semi-industrial mills 4 PI – – Physical 126 194
Sierra Leone 1 semi-industrial mill 2 DPI – 1,300 Cultural 85 668
Benin 17 ESOP – DPI 140 – None 185 132
Togo 15 ESOP – DPI >100 – None 9.3 86
Guinea – – – – – Cultural 153 1,248
Mauritania – – – – – None 77 119
Gambia – – – – – Cultural 28 36
Guinea-
Bissau – – – – – Cultural 10 107
OUTCOME INDICATORS DRIVERS
1
2
3

8. 7RICE VALUE CHAIN UPGRADING IN WEST AFRICA
Conclusion
• We captured heterogeneity in investment in rice value
chain upgrading among 15 West African countries
through the following outcome indicator: aggregate
milling capacity of upgraded industrial and semi-
industrial mills (t/h) (total in West Africa = 315 t/h)
• Heterogeneity in upgrading can be explained for 89%
through two drivers and an enabling factor:
• Driver 1 = Supply: Average annual paddy supply (2009–
2018): One million ton more of milled rice availability
increases upgraded milling capacity by 34 t/h
• Driver 2 = Demand: 2008 import bill: A 100 million US$
higher import bill increases upgraded milling capacity
by 6 t/h
• Enabling factor = limited comparative advantage in
demand: Geographical or genealogical proximity to rice
cultural heritage preserves indigenous preferences for
local rice and decreases upgraded milling capacity by 23
t/h
• Landlockedness: No significant effect
• Policy makers need to find an optimal mix between
encouraging productivity, demand and value chain
upgrading to foster crowding-in of private investment
(e.g., FDI)

9. RICE VALUE CHAIN UPGRADING IN WEST AFRICA 88
Value of rice production in US$/ha (Nelson, 2010)
Matty Demont,
CGIAR Research Program on Rice Flagship Leader “Upgrading rice value chains”
International Rice Research Institute (IRRI), Los Baños, Philippines
Webinar “Strengthening Food Value Chains”, CGIAR Research Program on
Policies, Institutions, and Markets (PIM) and Food Security Portal, 27
October 2020.
Thank you!

10. Trent Blare – University of Florida, formerly CIMMYT
Jason Donovan – CIMMYT
Marina García-Medina: CIMMYT
The right tortilla for the right occasion:
Variation in consumers’ willingness to pay
for blue maize tortillas based on utilization

11. Blue maize markets
• 60% is consumed locally (few
external markets) & processed by
women
• Growing interest in Mexico to
consume traditional products &
growing international markets
• Opportunity to increase income from blue
maize production
• Bring more farmers into blue maize VC
• Both in gourmet sector & agro industry
• Little knowledge of what happens
to native maize once it leaves the
farm – especially of consumer’s
preferences & role in the VC

12. Research Questions
•Which consumers are
willing to pay more for blue
maize tortillas?
•What limits access to blue
maize tortillas?

13. Data collection
• 3 locations (market & two shopping centers)
in peri-urban Mexico City from May-June
2019 with 630 consumers
• Blinded taste test of machine white,
handmade blue & handmade white tortillas
• Choice experiment of three different
scenarios: in-home daily use, in-home
special event, and out-of-home
consumption

14. % More Consumers’ Willing to Pay for
Blue Maize Tortillas
Variable
In-home daily In-home special event
Out-of-
home
WMMT to
BHMT
WHMT to
BHMT
WMMT to
BHMT
WHMT to
BHMT
WHMT
to BHMT
Overall preference 30.78 --- 42.00 --- 41.60
Women --- 3.58 ---- ---- ----
Post-secondary --- --- 62.26 6.55 57.37
Mid income --- --- 31.64 --- ---
High income 39.85 --- ---- --- 51.90

15. % Faced Following Difficulties in
Accessing Tortillas
Difficulty White Blue
Lack of trust in the quality 29 71
Too expensive 37 63
Unaware of sales points 38 62
Too little product 38 62
Too few sales points 41 59
Sales points too far away 49 51

16. Conclusions
• Consumers, in general, prefer and are willing to pay
more for blue tortillas - especially women & more
educated
•Price may not be the primary factor that limits the
purchase of blue maize
• Consumers seek out products but cannot find them
•Failure for demand signals to transmit down the VC
• Choices depend on use & context

17. Thank you!
Trent Blare: tblare@ufl.edu
Jason Donovan: j.donovan@cgiar.org
Mariana Garcia-Medina: m.garcia@cgiar.org
Blare, T., Donovan, J., and Medina-Garcia, M.
2020. The right tortilla for the right occasion:
Variation in consumers’ willingness to pay for
blue maize tortillas based on utilization.
Journal of Food Products Marketing.

18. Contracting and quality upgrading:
Evidence from an Experiment in Senegal
PIM Webinar, October 27, 2020
Tanguy Bernard (Univ. Bordeaux & IFPRI),
with Joshua Deutschman (Univ. Wisconsin-Madison) & Ouambi Yameogo (IITA)

19. Motivation
• Linking producers to export markets can improve income and welfare (e.g. Minten et al. 2009; Reardon et al.
2009; Atkin et al. 2017; Barrett et al. 2020)
• Requires to meet international quality standards – often a major entry barrier (e.g. Ferro et al. 2015;
Fontagné et al. 2015; Fernandes et al. 2019)
• Implies producers to change practices or invest in new technologies
• Farmers’ changes of practices/uptake of new technologies are constrained by market imperfections
• Credit alone cannot unlikely relaxes adoption constraint (e.g. Karlan et al., 2014)
• Insurance provision, suffers from limited uptake (e.g; Cole et al. 2014; Cai, 2016; Elabed and Carter,
2015)
• Output market reforms may not sustain lobbying efforts from local traders (e.g. Bernard et al. 2018)
→ Suggests bundling interventions together to address several of these constraints (Abate et al., 2018;
Deutschmann et al., 2019)
• Contract farming arrangements can help address market imperfections and increase productivity or quality
(Arouna et al., 2019; Macchiavello and Miquel-Florensa, 2019).
• Can be difficult in contexts with limited institutional capacity (Fafchamps, 2004; Bellemare, 2010;
Mujawamariya et al., 2013)
• Effectiveness depend either effective institutions or informal relationships (Brown et al., 2004; Michler
and Wu, 2020).

20. This study
• Context
• Aflatoxins control recognized as a key public health challenge
(Partnership for Aflatoxin Control in Africa, 2015)
• Small-scale producers in Senegal’s peanut bassin, face stringent
Aflatoxins’ requirement to export on European market
• Aflasafe: an affordable and effective bio-control technology
developped and promoted in Africa by IITA
• Research question
• To what extent are bundle contract arrangements more/less
effective at promoting uptake of Aflasafe, a brand new
technology ?
• Subsequent question: which contract features (and
combination) matter most ?
• Test of a new contractual offer which bundles:
• Credit for the purchase of Aflasafe
• Extension for the use of Aflsafe
• Price premium for low-aflatoxins groundnuts
• Randomized control trial
• Work with two partner groundnut coops,
each working in > 50 villages
• Randomly select 40 villages, 10 farmers per
village. Final sample = 396 farmers
• Assign 20 villages to new contract offer, 20 as
controls, stratified at commune-level
• Timing
• June-July 2019 : Baseline survey and
treatment assignement
• August 2019: Access and extension for use of
Aflasafe
• December 2019 – January 2020: test of
samples
• June 2020: endline survey

21. Treatment and compliance
• Outcomes of interest
• Uptake of technology (purchase of Aflasafe)
• Output quality (satisfies EU standards)
• Fulfillment of contract (share sold to coop)
Treatment Control
Information
Health hazard of aflatoxins yes yes
Agronomic potential of Aflasafe yes yes
Availability
Coupon to redeem 10kg of Aflasafe from coop shop yes yes
Payment of Aflasafe (10 000 CFA ~20 USD) credit cash
Extension
Demo video yes yes
Field demo yes maybe
Price premium
40 CFA/kg guarranteed maybe

22. Uptake of new technology (Aflasafe)
• Large effect of treatment on on
uptake of new technology – much
larger than effects of non-
bundled interventions in existing
literature.
• Heterogeneity:
• Treatment effect mostly driven by
risk-averse individuals

23. Effect on quality – compliance with EU standards
• Aflatoxin contamination is indeed a problem in the
groundnut basin of Senegal: more than 30 percent
of farmers in the control group exhibited
contamination exceeding European Union import
standards.
• Positive but relatively small (12 percentage point)
effect of treatment on average
• Important heterogeneity: farmers in high-risk of
aflatoxins areas who receive a contract offer,
produce groundnuts is 44 percentage point (138%)
more likely to comply with international standards.

24. Fulfillment of contract – sales to coops
• Supply to cooperative: relatively large
positive effect on extensive and
intensive margin (anout twice the size
of the loan for Aflasafe)
• Heterogeneity:
• Effect of treatment nearly three times as
large for high-reciprocity farmers
• Effect is twice as large for new farmers and
lead farmers

25. Follow-up
• Could a cheaper contract with fewer contract elements provide similar
benefits?
• Possible general equilibrium effects of such contracts on quality
composition of groundnuts traded in local markets

26. Q&A
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