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Comparative Advantage in Demand and the Development of Rice Value Chains in West Africa

Matty Demont (), Rose Fiamohe and A. Thierry Kinkpé

World Development, 2017, vol. 96, issue C, 578-590

Abstract: National rice development strategies in Africa are often supply-focused and implicitly assume that consumers will readily substitute imported for domestic rice. However, due to increasing import dependency, urban consumer preferences for rice have become biased toward Asian export quality standards, against which African rice has difficulties to compete. Anecdotal evidence suggests that this import bias is higher in cities close to the port and remote from the geographical centers of cultural heritage where African rice was domesticated more than 3,000years ago. We purposely select a sample of five West African urban markets which are supplied by both foreign and domestic rice value chains and which are located at varying distances from the nearest ports and centers of cultural heritage, and conduct framed field experiments based on auctions to analyze the drivers of urban demand for domestic rice with upgraded quality characteristics. We find that West African rice has increasing difficulties competing against imported rice on urban markets the more consumers appreciate characteristics of imported Asian rice, the closer to the port, and the further the geographical and genealogical distance from rice cultural heritage. These challenges provide crucial insights into value chain upgrading in policy makers’ struggle to achieve rice self-sufficiency in West Africa. Our findings suggest that the optimal portfolio of investment in value chain upgrading is a function of the targeted end-market and its distance from the port and rice cultural heritage. The closer the end-market is located toward the port, the more investment is needed in lifting demand of domestic rice through quality upgrading, branding, and promotion to enable it to compete against imported rice. Proximity to centers of cultural heritage, on the other hand, endows rice value chains with a “comparative advantage in demand,” requiring less investment in demand-lifting and leaving more room for supply-shifting investments.

Keywords: demand analysis; value chain upgrading; experimental auctions; competitiveness; cultural heritage; West Africa (search for similar items in EconPapers)
Date: 2017
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