The right price for rice
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CTA. 2006. The right price for rice. Spore 123. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/48070
Internet URL: http://spore.cta.int/images/stories/pdf/old/spore123.pdf
In Madagascar and Mali, rice farmers have come up with two different strategies for making sure they get a fairer deal for their crops....
In Madagascar and Mali, rice farmers have come up with two different strategies for making sure they get a fairer deal for their crops. The rise in world rice prices has helped Malagasy farmers realise the real value of their produce, and made them determined not to carry on selling it off cheaply to collectors as soon as it is harvested. To avoid being at the mercy of traders, more and more small-scale producers in isolated areas are banding together under the umbrella of mutual funds to store their rice in village community warehouses. In the region of Mahitsy, some 30 km from the capital, the number of such warehouses managed by the Savings Bank and the mutual agricultural credit fund CECAM more than doubled in the space of a year, rising from 86 in 2004 to 227 in 2005. It takes just three people to set up a warehouse, enabling them to wait for prices to rise and, above all to borrow money from a mutual fund. Stocks of rice stored here serve as guaranty to agricultural mutual funds, which lend the equivalent of 75% of the crop s value. Thanks to this system, many rice farmers have been able to diversify their output, moving into poultry keeping or vegetable production. In Mali, producers working plots of land managed by the Office du Niger, an organisation which manages the country's largest irrigated area, have this year decided not to sell their rice for any less than 200 F CFA a kilo ( 0.30). They calculate that if they receive anything less than this, they will not cover their production costs and will be unable to pay the water charges to the State-owned body, which may evict them as a result. The coordinator of the Observatoire du marché agricole (OMA), which monitors commodity prices at markets in Mali, disapproves of this single price system, and instead recommends setting up a system of credit which allows farmers to meet their most pressing needs without having to sell their crops straight after harvest.