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CATHOLIC UNIVERSITY OF CAMEROON CATUC - BAMENDA
FACULTY OF BUSINESS AND MANAGEMENT SCIENCES
DEPARTMENT OF PROJECT DESIGN, MANAGEMENT AND IMPLEMENTATION
A VALUE CHAIN ANALYSIS OF THE COMPETITIVENESS OF
RICE PRODUCED IN NDOP PLAIN
BY
FUH GEORGE CHEO
Matriculation No. 56411
A Thesis Submitted In Partial Fulfillment of the Requirements for the Degree
of Master of Business Administration in Project Design, Management and
Implementation
Supervisor
Dr SAMA NKWAINAssociate Professor, CATUC- Bamenda. FEBRUARY, 2014
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CATHOLIC UNIVERSITY OF CAMEROON BAMENDA, CAMEROON
CERTIFICATION OF AUTHENTICITY OF STUDY
I the undersigned, FUH GEORGE CHEO, hereby certify that this thesis is the fruit of my
research on A VALUE CHAIN ANALYSIS OF THE COMPETITIVENESS OF
RICE PRODUCED IN NDOP PLAIN under the Supervision of Dr. SAMA NKWAIN,
Associate Professor in the School of Tropical Agricultural and Natural Resources of the Catholic
University of Cameroon, Bamenda.
I further testify that this work is authentic and has never been presented for the award of a degree
anywhere else.
Name and signature of student
FUH George CHEO
Date -----------------------------
Supervisor Head of Department
Prof. SAMA NKWAIN (PhD), Prof. AKALAGBERE (PHD)
Date -------------------------- Date -----------------------
CERTIFIED CORRECTION FORM AFTER DEFENCE
3
This thesis has been reviewed and corrected in conformity with the observations and
recommendations of the jury.
PRESIDENT OF JURY:
Date……………………………….
SUPERVISOR HEAD OF DEPARTMENT
Date……………………. Date……………………..
4
DEDICATION
To my lovely wife
Neh Gladys Fusi
&
Kids
Cheo Fusi Brandon and Cheo Suh Audran
For bearing my absence
as a husband & father respectively
during the period of this course
ACKNOWLEDGEMENT
For Professor Sama Nkwain (Catholic University), I would like to express my heartfelt
gratitude for his devotion in directing my study. His comments were useful in assisting me in the
completion of my thesis. His supervision was essential in confidence building and enabled me to
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complete this study in a timely manner. I am fortunate to have him as my supervisor. Thank you
very much, Professor Sama.
I am also grateful to the management and Staff of the Upper Nun Valley Development
Authority (UNVDA) Ndop, the staff of the Divisional Delegation of agriculture and rural
Development, Ngoketunjia Division who supported and encouraged me during my research,
especially during data collection. My sincere appreciation goes to all farmers, middlemen as well
as processors who were very cooperative during data collection. I will not hesitate to extend my
thanks to Mrs Dorothy Malaa of the Rice Improvement Project of IRAD Yaounde, for providing
me with valuable information.
Finally, I would like to express my sincere gratitude to my family who provided me the
best conditions to pursue my MBA studies.
May God bless them all.
FUH George CHEO, February 2014
TABLE OF CONTENTS
CERTIFICATION OF AUTHENTICITY OF STUDY.......................................................... iii
CERTIFIED CORRECTION FORM AFTER DEFENCE ....................................................iv
DEDICATION........................................................................................................................v
ACKNOWLEDGEMENTS .................................................................................................. vi
TABLE OF CONTENTS ........................................................................................................vi
LIST OF TABLES ..................................................................................................................xi
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LIST OF FIGURES.............................................................................................................. xii
LIST OF ABREVIATIONS .................................................................................................xiii
ABSTRACT ........................................................................................................................xiv
CHAPTER ONE
INTRODUCTION
1.1 Background of the study.................................................................................................. 1
1.1.1 Overview of rice production in Cameroon…………………..…………………………1
1.1.2 Overview of rice production in Ndop Plain…………………………………….………6
1.2 Statement of the problem ................................................................................................. 14
1.3 Research questions...........................................................................................................16
1.4 The objectives of the study......................................................................................... …..16
1.5. Significance of the study...................................................................................................16
1.6. Scope and limitation of the study.............................................................................…….17
1.7 Organization of the thesis...........................................................................................…...17
CHAPTER TWO
CONCEPTUAL FRAMEWORK AND LITERATURE REVIEW
2.1 Value chain Concept .....................................................................................................…18
2.2 Value chain analysis model.............................................................................................. 24
2.3 Mapping the value chain................................................................................................... 27
2.4 Value chain governance............................................................................................... ….22
2.5 Enabling environment and institutional arrangements…………………………….……29
2.6 Analysis of costs and earnings.......................................................................................... 29
2.7 Distribution of revenue cost and profit……………......................................................... 30
2.8 Agricultural value chain ............................................................................................. …..32
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2.9 Value chain Development................................................................................................ 33
2.10 Competitiveness ...........................................................................................................34
2.11Benchmarking………………………...............................................................................35
2.12 Review of Empirical Studies..........................................................................................36
2.13 Limits of the value chain approach ……….................................................................... 39
CHAPTER THREE
3. RESEARCH METHODOLOGY
3.1 Method of Data Collection and Analysis….....................................................................40
3.1.1 Method…………………………………………………………………………….…...40
3.1.2 Data collection…………………………………………………………………………41
3.1.3 Data analysis ……….. ...............................................................................................43
CHAPTER FOUR
PRESENTATION OF RESULTS AND DISCUSSION
4.1 Stages, Actors and Stakeholders of the Ndop rice value chain..........................................46
4.1.1 Ndop rice value chain Stages……………......................................................................46
4.1.1.1 Inputs Supply…. .................................................................................................... 46
4.1.1.2 Farm production…………………………………………………………...................46
4.2.1.3 Collection/Assemblage of paddy rice ………….. ......................................................47
4.2.1.4 Processing………………………………................................................................. 47
4.2.1.5 Marketing (wholesale/retail)………………………………………...................... ….47
4.2.2 Support services…………………………………………………………………...…...49
4.3 Ndop Rice Value chain map; Actors, stakeholders, functions and linkages …………..51
4.3.1 Input suppliers………………………………...………………………………………..53
4.3.2 Producers……………………………………………………………………………….55
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4.3.3 Middlemen……………………………………………………………………………..55
4.3.4 Processors…………………………………………………………………………...…57
4.3.4.1 Activities associated to processing…………………………………………………..59
4.3.4.2 Processed products and by-products…………………………………………………60
4.3.5 Wholesalers and retailers…………...………………………………………………….61
4.3.6 Consumers………………………………………………………………………...…...63
4.4 Ndop rice value chain supporters………………………………………………………..63
4.4.1 Research and Extension Providers…………………………………………………….63
4.4.1.1 Institute of Research for Agricultural Development……………………………......64
4.4.1.2 Ministry of agriculture and Rural Development…………….……………………....64
4.4.2 Upper Noun Valley Development Authority (UNVDA)………………………………65
4.4.3 Ndop Rice Farmers’ Federation……………………………………………………….65
4.4.4 Microfinance Institutions………………………………………………………………66
4.5 Attitude, and practices of value chain actors and stakeholders…………………………66
4.6 Institutional arrangement and enabling environment……………………….…………..67
4.7 Value chain governance and coordination………………………………………………67
4.8 Cost structure and revenue………………………………………………………………69
4.8.1 Production Cost estimate for 0ne hectare of rice ……………………………………...69
4.8.2 Domestic added value, Revenue and profit distribution along value chain……………71
4.9 Benchmarking of performance indicators………………………………………………74
4.9.1 Yield estimates comparison..………………………………….……………………….74
4.9.2 Comparison of prices of white rice from different sources……………………………75
4.9.3 Comparison of Benefit Cost Ratios….………………………………………………...76
4.10 Challenges and opportunities…………………………………………………………..77
4.10.1 Challenges……………………………………………………….……………………77
4.10.2 Opportunities………………….………………………………………….…………..80
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CHAPTER FIVE
CONCLUSIONS AND RECOMMENDATIONS
5.1 Conclusions.................................................................................................................... 81
5.2 Recommendations .......................................................................................................... 82
5.3 Limitations to the Study and Further Research.........................................................…....83
REFERENCES ..................................................................................................................85
ANNEX I: Questionnaires …………………………………………………..……………...90
a) Questionnaire to farmers…………………………………………….…………………. 90
b) Questionnaire for rice collectors /assemblers ………………………………………….92
c) Questionnaire for rice millers…………….…………………………………………….94
d) Questionnaire to wholesalers, retailers………………………………………………….96
e) Questionnaire to consumer………………………………………………………………97
ANNEX II: Ndop Rice cultivation Zones …………………….…………………………….98
ANNEX III: Evolution of Rice yields from various Countries ……………………….........99
Evolution IV: of rice farmers in Ndop..................................................................................99
ANNEX V: Ndop Rice seed producers……………………………………………………100
ANNEX VI: Tables of cost, and added value of actors………………. ………………….101
ANNEX VII Map of the North West Region……..………………………………………..105
ANNEX VIII Relevant information revealed by the value chain actors………………….106
ANNEX VIII Summary of result of focused group discussion…………………………...106
LIST OF TABLES
Table 1: Evolution of rice production in Cameroon…………………………………………. 1
Table 2: Rainfall and temperature data for Ndop…………………………………………….7
10
Table 3: Evolution of Rice farmers’ population…………………..…………………………10
Table 4: Rice farmers and cultivated Areas.......................................................................... 11
Table 5: Distribution of cultivated surface areas………………………………..................12
Table 6: Rice production statistics for Ndop………………………………….................... 13
Table 7: Summary of value chain support services………………………………………. 49
Table 8: Summary of Ndop rice value chain Actors, stakeholders’ functions and output….50
Table 9: Rice seed producers in Ndop………………………………………………………53
Table :10 Fertilizers and pesticide distribution channels and prices……………………….. 54
Table 11: Percentage of Rice production collected by UNVDA…………………………….56
Table 12: Percentage of Rice processed by UNVDA…………….………………………….58
Table 13: Sources of paddy rice purchased by millers……………………………………..59
Table 14: Analysis of activities of millers………………………………………...…………60
Table 15: Products and by-products of Paddy Rice……………………………..…………61
Table 16: Sources of local rice sold by retailers and wholesalers…………………….……62
Table 17: Comparative price analysis for white rice………………………………………..62
Table 18: Consumers’ preference analysis………………………………………. …………63
Table 19: Cost estimate of production of rice on one hectare……………………………….69
Table 20: Domestic added value, revenue and profit distribution…………………………72
Table 21: Comparison of yield estimates…………………………………………...............74
Table 25: Comparison of Price of White rice from different locations……………………75
Table 26: Benefit cost ratio………………………………………………..…………………76
LIST OF FIGURES
Figure 1: Rice production trend in Cameroon………………………………………………..2
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Figure 2: Evolution of Rice production, consumption, and imports and yields in Cameroon..3
Figure 3: Rainfall pattern…………………………………...………………….……….......... 7
Figure 4: Map of Ngoketunjia Division…………………………………….………............ 8
Figure 5: Rice farmers trend…………………………………………………….……….......10
Figure 6: Number of rice farmers and surface areas cultivated………………………. …….11
Figure 7: Repartition of farmlands…………………………………………………………...12
Figure 8: Repartition of cultivated and uncultivated areas………………………….……….12
Figure 9: Rice production trends in Ndop plain……………………………………………...13
Figure 10: Basic model of Porter’s value chain…………………………..………….. …….18
Figure 11: Value chain analytical framework………………………………………………..24
Figure 12: Value chain stages for Ndop Rice………………………………………………..46
Figure 13: Value chain mapping of product flow……………………………………………48
Figure 14: Ndop Rice value chain map………………………………………………………52
Figure 15: Trend of rice collection by UNVDA……………………………………………..56
Figure 17: Cost structure for rice production………………………………………………..70
Figure 18: Domestic added value, cost, revenue and profit distribution ……………….…..73
Figure 19: Comparison of yields per hectare……….……………………………….……….74
Figure 20: Benefit cost ratio……………………...………………………………………….77
LIST OF ABBREVIATIONS
ACDIC………Association Camerounaise pour la Défense d’intérêts des Consommateurs
CEDAC………................Center for studies for the Development of Agriculture in Cambodia
CEMAC…………………..Commission Économique et Monétaire d’Afrique Centrale.
CIG..……………………… Common Initiative Group.
DDARD…………………….Divisional Delegation of Agriculture and Rural Development
FAO ………………………. Food and Agricultural Organization.
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IFAD………………………International Fund For Agricultural Development.
IFDC………………………International Finace Development Company
ILO. ………………………International Labour Organization.
NWR………………………North West Region.
RDARD……………………Regional Delegation of Agriculture and Rural Development
UNIDO…………………….United Nation Industrial Development Organization
UNVDA……………………Upper Nun Valley Development Authority.
USDA……………………..United States Department of Agriculture
VAT………………………Value Added Tax
VCA………………………Value Chain Analysis.
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ABSTRACT
This research aims at investigating the competitiveness of locally produced rice through a value chain analysis of rice produced in the Ndop plain. The objectives are (1) to identify and describe the main actors/stakeholders in the value chain (2) to identify and describe their activities with respect to their functions, linkages, attitudes and practices (3) to assess the current costs and earnings of value chain activities, and evaluate the distribution of revenue, cost and profit along the value chain (4) to benchmark key indicators along the value chain to detect performance gaps and (5) to identify challenges (weaknesses and threads), existing opportunities and entry points available for upgrading the value chain.
The value chain analytical frame work was used to understand the various aspects of the rice value chain. Data collection was carried out during the months of October and November 2013. Appropriate primary and secondary data were collected through literature review, interviews using semi structured and structured questionnaires and key informants. Qualitative and quantitative data analysis methods were employed. System of thematic analysis was used for the data that were collected through focused group discussion, key informant interviews, personal observations and secondary documents. Functional analysis was used to identify the various actors and their roles in the value chain. Partnerships and linkages were analyzed in their historical and contemporary context to understand their strengths and weaknesses. Tools used included chain mapping and actor linkage matrix to depict all activities, actors, and relationships among segments of the chain, and the interactions between producers and intermediaries. The analysis was generally descriptive. Quantitative value chain analysis focused on the amount of money a customer is willing to pay at each stage of the value chain. Fundamental tools for this analysis were the “Production account” and the “Income account” for a given period. Descriptive statistics such as simple measures of means, frequencies, percentages and cross tabulations wereused for the survey data gathered from sampled farmers, middlemen/processors, retailers,wholesalers and consumers. The use of SWOT (strength weaknesses, opportunities, and threads) analysis was also employed.
Research findings showed that the main players in the value chain were the farmers, collectors, processors, wholesaler and retailers who interacted with varying degrees from the supply of inputs to the product attaining the final consumer. The realization of these activities was catalyzed by existing support services that included; extension and training, financial credits, equipment hiring, and input supply. During rice farming, farmers incurred costs on seeds, fertilizers, pesticides, labour, and other miscellaneous items. The highest cost component in production were labour and fertilizers.
While the farmers added the highest value, the millers made the highest profit amongst the value chain actors. Yields obtained in Ndop were higher than those of some countries that export
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rice to Cameroon. Unfortunately, the high cost of production absorbed the gains in yields giving a benefit / cost ratio which is amongst the lowest as compared to other rice producing countries even those with lower yields than Cameroon.
Main challenges and constraints revealed by the study included; the high cost of production, inadequate developed land for rice cultivation, the use of inappropriate processing equipment by local millers, poorly organized markets and inadequate coordination of the activities of value chain actors. The favourable agro-ecology, availability of arable land, the motivating enabling environment, and the existing demand deficit for rice, stood out as opportunities to be exploited.
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CHAPTER ONE
1. INTRODUCTION
1.1 BACKGROUND OF THE STUDY
1.1.1 Overview of rice production and consumption in Cameroon
The demand for rice in sub-Saharan Africa in general and Cameroon in particular is
growing faster than for any other grain. Its production and consumption have generally increased
over the years, from a situation of it being eaten occasionally to being a major staple food. The
substitution of rice for other grains and traditional roots and tubers has increased growth in
demand at an annual rate of about 5% (WARDA 2006; Molua 2010). However productivity
remains low. National production in Cameroon is estimated at 100,000 tons of paddy grown on
44,000 ha each year with average household holdings of less than 0.5 hectare. Imports in 2011
stood at 429,864 tons. The state is dependent on international markets for the rice sector while,
paradoxically, potential for domestic production is huge (MINADER 2009). There are,
specifically, favourable natural conditions that are yet to be tapped.
Table 1 Evolution of Rice production in Cameroon
Market Year Production Unit of Measure Growth Rate
2006 40 (1000 MT) 14.29 %
2007 44 (1000 MT) 10.00 %
2008 55 (1000 MT) 25.00 %
2009 77 (1000 MT) 40.00 %
2010 57 (1000 MT) -25.97 %
2011 64 (1000 MT) 12.28 %
2012 61 (1000 MT) -4.69 %
Source: United States Department of Agriculture (USDA)
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Figure 1: Rice production trend in Cameroon
Source: generated from table 1
Figure 1 indicates that rice production in Cameroon was at its peak in 2009. Since then the
production has been declining with steep drop in 2010. This sitaution can be associated to the
recent global financial crises during which support to production was drastically cutdown.
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Figure 2: Evolution of rice production, consumption, imports and yields in Cameroon.
Source: United state Department of Agriculture - USDA
Figure 2 above indicates that while production is falling, consumption and importation are
increasing. The yields also dropped from 2010, while the area cultivated continue to increase.
18
More land came under cultivation. Imports by the country are growing at a rapid pace. Cameroon
imported about 545,000 tons of rice in 2011 worth about CFAF 145 billion (about $300 million),
up about 55% from 350,000 tons imported in 2010 mainly from Thailand, Pakistan, India and
China (USDA, 2012). In addition, ACDIC (2011) statistics indicate that Cameroon imported
over 450,000 tons of rice mainly from Thailand, Vietnam, Pakistan, and Burma. Rice is the most
consumed food in all regions of Cameroon, mainly because it is cheap. Total consumption needs
are over 650,000 tons. Production of domestic rice is rising slightly due the government and
donors’ commitment to increase local production through a comprehensive rice strategy that has
the financial support of multilateral donors including the World Bank (WB) and the International
Fund for Agricultural Development (MINADER, 2009). The ambitious rice strategy aims to
eventually replace rice imports by increasing local production from 72,000 tons in 2008 to
627,250 tons by 2018 according to the Cameroon Rice growing strategic paper. However, even
if production increases, this does not mean that consumers will buy local rice. Cameroonian
consumers are used to the quality of imported rice and paying a cheaper price for locally
produced rice. Also, due to the landlocked nature of the rice growing areas, rice produced in the
North is already often transported towards Nigeria where prices are higher and the road
infrastructure in the border is generally in good condition. According to the National Strategy for
Rice Growing in Cameroon, rice consumption is estimated at 25.7 kilogram per person and
growing at annual rate of 4 percent per year.
Rice production in Cameroon has weakness a declined by 21% in the last four years,
from about 77,000 tons in 2009 to an estimated 61,000 tons in 2012. In the same period
consumption of rice in the country has gone up 22% from 377,000 tons in 2009 to an estimated
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461,000 tons in 2012. Rice yield has also declined by about 25% from around 2 tons per hectare
in 2009 to below 1.5 tons per hectare in 2012(USDA, 2012).
Government attempts and international collaboration have failed to improve rice acreage
in Cameroon from current levels of around 65,000 hectares and yields of around 1.6 tons per
hectare. The state is dependent on international markets for the rice sector while, paradoxically,
potential for domestic production is huge (MINADER 2010). There are specifically favourable
natural conditions that are yet to be tapped. The government has not been able to utilize the
available 240,000 hectares of agricultural land for rice cultivation to increase domestic rice
production and help reduce the dependency on rice imports. Though Cameroon is a net importer
of rice, spending 125 billion francs importing rice in 2012 (National Institute of Statistics, 2012).
Cameroon still exports rice to the neighboring Central and West African countries including
Chad, Gabon Equatorial Guinea and Nigeria. With huge population and food insecurity made
worst by the lingering effects of the global financial crisis and climate change, a viable option is
to create food surpluses by increasing land productivity (MINADER 2009).
Upland rice is grown as a mono-crop or as in a mixture with other food crops following the
slash-and-burn shifting cultivation. Rain-fed lowland rice is cultivated following traditional
systems with some minimum application of chemical fertilizer and other agro-chemical. In
irrigated areas, support for farmers with regard to input supply has been greatly reduced. Land
preparation in rain-fed lowland areas is done mostly manually, while that in irrigated areas
animal traction has been introduced. Light tilling machines are also employed in certain areas.
Transplanting is the dominant method of crop establishment in lowland systems. Weeding is
generally done manually. Farmers do not have appropriate tools and equipment for harvesting
and threshing of rice. A number of improved rice varieties have been released for cultivation.
20
Millers are also available though the quality of grains remains generally poor due to poor post
harvest handling.
1.1.2 OVERVIEW OF RICE PRODUCTION IN THE NDOP PLAIN
The Ndop rice production basin is found in the North West region of Cameroon.
It is one of the main rice production areas in the country where agriculture is the main
activity occupying about 80% of the population. It has a massive exploitable surface area
of 22,500ha of which only 2984.7 ha are currently being exploited (SEDT 2011). The
soils are ferralitic or hydromorphic and are rich in organic matter and good for rice
production (Ndzeidze 2008).
The Upper Nun Valley Development Authority (UNVDA) is based in this area
and is charged with transforming wetlands (swamps and marshy areas) through drainage
for irrigation purposes. Most Ndop rice farmers are small holders and employ intensive
labour practices in place of mechanization. With huge population and food insecurity
made worst by the lingering effects of the global financial crisis and climate change, a
viable option is to create food surpluses by increasing land productivity (MINADER
2009). Production of rice is carried out alongside other crops like maize, beans and
others. Production of rice is done only for one season, generally starting in June with the
nursery and ending in December with harvest.
Productivity of land used for growing rice is to a large extent determined by soil
and water conditions. There has been rising temperatures and declining rainfall between
2011 and 2012 but since most rice grown in Ndop is swamp, this seems to have had little
impact on yield.
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2. Table 2: Rainfall and Temperature data for Ndop.
Jan Feb March
April
May June July
August
Sept Oct Nov Dec
T° Max. 2012
43.2 43.3 43.2 43.1 43.2 43.2 43.1
48 .1 43.2 43.2 43.1 43.2
T° Max 2011
30.7 37.3 35.9 35 35.5 35.9 35.2
30.9 30.7 32.9 36.3 37
T° Min.2012
13.8 11.5 18.5 19.7 19.3 18.3 17.8
17 17.4 14.5 17.5 15.3
T° Min. 2011
10.3 11.6 12.2 11.6 12.8 12.8 10.5
11 11.1 11.6 10.6 12
Rainfall 2012
0 0 133.5 132.3
177.5
204.1 551.8
124.7
815.2
156.1
56.8 22.7
Rainfall 2011
7 147.5
127 175 392 159 645 370 867 736 44 0
Source: Annual report of DDARD
Table 2 presents rainfall and temperature recorded in Ndop for 2011 and 2012.
Figure 3: Rainfall pattern for (2011, 2012)
Source: Generated from table 2
Figure 6 shows that the rainfall pattern has been consistent for 2011 and 2012 though
lesser amount of rainfall was observed for 2012. This is conducive for rice cultivation
except for its sporadic nature which caused floods in some fields in 2012.
22
The cultivation of rice in the Ndop plain can be traced back to the early 60s, this was
enforced in 1970 with the creation of UNVDA in 1970 as a Mission by Presidential Decree No
70/DF/529 of October 29, 1970 and later transformed into a development authority by another
Presidential Decree No 78/157 of May 11, 1978 (UNVDA, 2012). The Upper Nun Valley
Development Authority (UNVDA) is based in this area and is charged with transforming
wetlands (swamps and marshy areas) through drainage for irrigation purposes. Most Ndop rice
farmers are small holders and employ intensive labour practices in place of mechanization.
Figure 4: Map of Ngoketunjia Division
Source: UNVDA Report
Figure 4 is the map of Ngoketunjia Division. It is made up of three subdivisions and is one of the
seven Divisions of the North West Region of Cameroon.
Production of rice is carried out alongside other crops like maize, beans and others.
Production of rice is done only for one season, generally starting in June with the nursery and
ending in December with harvest Rice varieties cultivated in Ndop include; Tox Thianine,
NERICA L 42, and NERICA L 56 (swamp rice) and NERRICA L 3 (Up-land rice). Ndop rice is
23
grown in the swampy alluvial Ndop plains in the Ngoketunjia Division in the North West
Province of Cameroon. According to official statistics (MINADER, 2012), rice farming currently
occupies approximately 2,500 hectares involving over 8,500 farmers (of whom approximately
50% are women). Yet, this is less than 25% of the land thought to be available in the plains for
rice farming. Rice farming is split between the developed farms and the traditional
(underdeveloped) farms. The developed farms have been prepared by the government rice
corporation, the UNVDA (Upper Nun Valley Development Authority) which was set-up by the
government of Cameroon for the development of the rice sector in Ngoketunjia (in the
catchments of the Noun River). As such during the UNVDA’s 1977 Land Development
Program, over 2,500 hectares of land was developed (of which 1,800 hectares is currently being
cultivated). The land was cleared and leveled and irrigated by a network of canals sourced by a
dam (UNVDA, 2012). However since 1988 the UNVDA’s role changed and the organization in
its original form was liquidated. As such the infrastructure was neglected and the farmers were
not receiving any technical services. It was only in 2006 that the UNVDA resumed its field work
and training. Yet, the UNVDA is chronically under resourced. 12 UNVDA rice inspectors cover
an area of Approximately 2,500 hectares. In contrast the traditional farms are estimated at 700
hectares or approximately 30% of the area used for rice cultivation (UNVDA, 2012). However,
this is the growth venue within the rice farming activities in Ngoketunjia Division and this figure
does not capture some of the newest farming areas. For the traditional farms, the land is prepared
by the farmers themselves. As such the traditional farms may be lacking in basic infrastructure
such as access roads and a well developed irrigation system. For example, the farmers may
irrigate their fields by breaking the banks of connecting farms to the river and thereby by
flooding the entire area. As such the situations may arise where some fields are dry whilst some
fields are over flooded. Water level fluctuates and in some cases the fertilizers get washed away.
24
Furthermore, situations have arisen whereby the river has over flown and broken its banks and
destroyed the farms.
Rice cultivation activities are facilitated in this plain by the existence of means of agricultural
mechanization, transportation facilities (farm roads, farm to market roads) and irrigation and
drainage possibilities especially, with the Bamenjim dam, and numerous rivers and streams that
provide water in the rice fields.
Fertile soils and Favorable climatic conditions, is an asset. Organic soil from neighboring
hills deposited in the plain by erosion water. The amount of annual rainfall is also an advantage.
80% of the population of Ndop is farmers. They benefit from the existence of a large span of
arable land.
1.1.3 Evolution and organizations of rice farming population.
Table 3: Evolution of rice farmers’ population
ProductionYear
Nº of RiceFarmers
2009/2010 108142010/2011 121222011/2012 12303
Source: UNVDA 2013 annual report
Figure 5 Rice farmers- trend
Source: Generated from table 3
25
Figure 5 indicates that there was a drastic improvement between 2009 and 2010. This can be
associated to the revamping of the activities of UNVDA. This however slowed down due to the
slow development of land to accommodate new farmers.
The rice farming population is estimated at 12,303 farmers. At the beginning of 2013, 5,755
farmers were organized in 238 Common Initiative Groups (CIGs). This represents 46.78% of
the total population of rice farmers (6,197 men and 6,096 women). This indicates an increase of
5.81% as compared to 2011/2012 farming season. These Common Initiative Groups have formed
05 Unions of CIGs and a Federation.
41.1.4 Evolution of cultivated area and production.
Table 4: Rice farmers and cultivated area
ProductionYear
Nº of RiceFarmers
Surface area Cultivated (ha)
Average Area per Farmer (ha)
2009/2010 10814 2,634.12 0.242010/2011 12122 2,984.7 0.252011/2012 12303 2970,51 0,24
Source: compiled from UNVDA 2012 annual reports
Figure 6: Number of rice farmers and surface areas cultivated
Source: Generated from table 6
26
Figure 6 indicates that while the farming population is increasing, the land available remains
relatively constant. There is therefore an urgent need for land development. The farmers own
small holdings with average size of 0.24 - 0.25 hectares which is very low hence farmer cannot
benefit from economies of large scale production. While the number of farmers have been
increasing the average area cultivated per farmer has remained relatively stagnant. This indicates
that the increase in developed land has not been able to lead to increase in area cultivated per
farmer.
Table 5: Distribution of cultivated surface area
Potential available land
Cultivated surface areas (ha)
Developed farm by UNVDA
Traditional farms Total
2010 2011 2012 2010 2011 2012 2010 2011 201215,036.86 ha
1, 303.9 1,351.9 1499 1,330.2 1,299.7 1,471.5 2,634.1 2,651.6 2,970.5
Source: UNVDA 2013 Annual report
Occupation of potential land
figure 7: Repartition of cultivated figure 8: Cultivated and potential area uncultivated surface areas in 2012
Source: Generated from table 7 Source: Generated from table 7
Potential
Cultivated
Developed
Undeveloped
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- Figure 7 shows that there is great need for more developed rice fields as 49.54% of the
surface area cultivated in 2012 is undeveloped land. Farmers are developing more interest
in rice production.
- Figure 8 indicates that a greater portion of land allocated to UNVDA is still to be
exploited (12,029.49ha or 80.20%). Consequently a lot of efforts must be directed
towards land development. For gender distribution there is no significant difference.
UNVDA reports show that female producers constituted 50%, 49%, and 50% for 2010,
2011 and 2012 respectively. There is no gender bias.
Table 6: Rice Production in Ndop plain
ProductionYear
Nº of RiceFarmers
Surface area Cultivated (ha)
Average Area per Farmer (ha)
EstimatedProduction (t)
2009/2010 10,814 2,634.12 0.24 10,5362010/2011 12,122 2,984.7 0.25 14,9232011/2012 12,303 2,970,51 0,24 14900
Source: UNVDA Annual reports
Table 6 shows the evolution of rice farmers, surface area cultivated, average area per farmer
and production estimates.
Figure 9: Rice production trend in Ndop plain
Source: Generated from table 6
28
Figure 9 indicates trends for rice farmers, surface area cultivated, average area per farmer and
production estimates from 2009 t0o 2012 farming season. While there was a marked increase in
the number of farmers involved in rice cultivation between 2010 and 2011, form 10,814 farmers
to 12,122 giving 11.8% increase, the situation remains relatively constant between 20011 and
2012 with an increase of 1.5%. This is associated to rehabilitation works started in the rice fields
by UNVDA IN 2010. Close to 350 hectares of land were rehabilitated. Broken dams were
repaired and water canals opened to facilitate water management. Private farmers also carried out
repair works in certain areas.
1.2 PROBLEM STATEMENT
The strategy for the development of rice production in Cameroon spelt out within the
framework of the National Strategy for the Development of Rice Growing (MINADER, 2009)
seeks to improve the productivity and competitiveness of local rice by supporting the acquisition
of agricultural inputs as well as supporting the processing and marketing of rice (among other
things). Much attention is directed to supporting farmers with large farm sizes. However, little if
anything is known about the various actors/stakeholders involved; their roles and influence on
the efficiency of the various stages of the value chain. This may result in limited realizations in
terms of resource use efficiency and level of exploitation of existing potentials. This is confirmed
by (Molua 2010) concluding in his paper on rice yield response to price “that supplies response
could be enhanced by a policy that is directed towards promoting irrigation technology,
development of market-supporting infrastructure, input incentive package and reduction of
production risks”. Not much is known about the economic factors that affect rice production in
Cameroon. As a result policies are often ineffective, production continues to be low and imports
continue to be very high. If agricultural planning is to involve with the improvement of the
29
competitiveness of locally produced rice, it is important that focus should not only be on the
production and productivity but also on the post harvest dimensions and the supportive services
of the value chain by improving on their efficiencies. Given this potential to expand production,
it would seem that there is a good possibility that the growth in the gap between rice
consumption and production could be reversed, and that imports could decline, at least in relative
terms. For it is not at all clear that most of the rice being produced in Cameroon in general and
Ndop in particular can compete with imported rice — not so much in terms of comparative costs
as in terms of quality, availability and other dimensions in which these grains compete.
Considering such huge demand and potential agro-ecology, the state through the Ministry
of Agriculture and Rural Development, the rice development organization UNVDA and various
development organizations, and non-governmental organizations put some effort to introduce
and raise rice production in the area. Yet, farmers are still facing different problems like, input
supply (improved seed and fertilizer), post harvest handling (particularly processing, grading and
packaging), and adapted credit facility. Therefore, this entails a need for more comprehensive
study which will rigorously examine the rice value chain in the study area by investigating its
competitiveness. Value chain is, however, a broad issue. This research, therefore, does not try to
cover all dimensions of the value chain of Ndop rice, but rather it focuses on specific objectives.
The research attempts to identify actors participating in the value chain of Ndop rice, their
functions, roles linkages as well as costs and earnings incurred. The research aims to reveal the
distributions of revenue, costs and profit to different actors in the chain, as well as reasons for
such distributions. The impact of value chain governance, coordination, institutional
arrangements and enabling environment on the competitiveness of the chain will also come
under scrutiny.
30
1.3 Research questions
- Who are the main actors/stakeholders in the Ndop rice value chain?
- How do the roles/functions, linkages, practices and attitudes of actors/stakeholders impact
on the competitiveness of the value chain?
1.4 Objectives of the Study
Main Objective
This work aims at investigating the competitiveness of locally produced rice through a
value chain analysis of rice produced in the Ndop plain. Specifically, the purpose is:
To identify and describe the main actors/stakeholders in the value chain.
To identify and describe their activities with respect to their functions, linkages, attitudes
and practices.
To assess the current costs and earnings of value chain activities, and evaluate the
distribution of revenue, cost and profit along the value chain.
To benchmark key indicators along the value chain to detect performance gap and reasons
for such gaps.
To identify challenges (weaknesses and threads), existing opportunities and entry
points available for upgrading the value chain.
1.5 Significance of the study.
This study will lead to an increased understanding of the reasons for inefficiencies
in the Ndop rice value chain in particular and the existing rice value chain in Cameroon
in general. It provides a holistic picture of existing challenges, opportunities and entry
points in the Ndop rice value chain. The information generated could also help a number
of organizations including; research and development organizations, traders, producers,
policy makers, extension service providers, government and non-governmental
31
organizations to assess their activities and redesign their mode of operations and
ultimately influence the design and implementation of policies and strategies. It could
also help different actors to identify and analyze new ways of tailoring their strategies.
1.6 Scope and Limitations of the Study
The purpose of this study is to investigate the competitiveness of locally produced
rice through a value chain analysis of rice produced in Ndop plain in Ngoketunjia
Division of the North West Region of Cameroon. Due to constraints in time and financial
resource, the study is limited in its depth and coverage to fully address the issues raised in
the study. Furthermore, Since Cameroon has wide range of diverse agro-ecologies,
institutional capacities, organizations and environmental conditions, the result of the
study may have limitations to make generalizations and make them applicable to overall
country. However, it may be useful for areas with similar context with the study area.
1.7 Organization of the Thesis
With the above brief introduction, the remaining part of the thesis is organized as
follows: Chapter 2 presents review of literature on value chain analysis from different
sources. Subsequently, description of the study area and methodologies are presented in
Chapter 3. In Chapter 4, both descriptive and socio economic results are presented and
discussed in detail. Chapter 5 summarizes the main findings of the study and draws
conclusion and appropriate recommendations.
32
CHAPTER TWO
2. CONCEPTUAL FRAMEWORK AND LITERATURE REVIEW
2.1 The value chain concept.
Michael Porter in 1985 introduced the value chain analysis as a technique to evaluate the
internal and external business processes as a competitive advantage versus standard financial
metrics (Profit and Loss, Balancesheet, Cash Flow) (Van den Berg et al 2009). The value paid by
the Customer will be greater than the cost of all value added activities resulting in a profit
(Roduner 2004). Cost advantages and differentiation opportunities are analyzed throughout the
value chain to become more competitive (Brown 2009). Kaplinsky and Morris (2000) define the
value chain as “the full range of activities which are required to bring a product or service from
conception, through the intermediary phases of production, delivery to final consumers, and final
disposal after use”.
Figure 10: The basic model of Porter’s Value Chain
Source: adapted from Van den Berg et al 2009
33
Figure 10 identifies two types of activities: Primary activities and support activities. Primary
activities include inbound logistics, operations, outbound logistics, market and sales, and
services. Support activities consist of infrastructure, human resource management, technological
development, procurement and so on.
In the mid 1980s, Porter developed the value chain analysis as an instrument for
identifying the value of each step in the production process (Figure 4). The concept of value
chain is utilized as a conceptual framework that enterprises can use to detect their sources of
competitive advantage. Porter argued that the sources cannot be detected by looking at a firm as
a whole; rather the firm should be disaggregated in a series of activities. Porter identified (1)
primary activities, which directly contribute to add value to the production of goods and service
and (2) support activities, which have an indirect effect on the final value of the product (Van
den Berg et al 2009). The primary activities are: inbound logistics, operations, outbound
logistics, marketing and sales and services. The goal of these activities is to offer the customer a
level of value that exceeds the cost of the activities thereby resulting in a profit margin (Roduner,
2004).
A value chain describes how producers, processors, buyers, sellers, and consumers — separated
by time and space — gradually add value to products as they pass from one link in the chain to
the next(UNIDO,2009). It describes how the Enterprises are linked by a series of business
transactions in which the product is passed on from primary producers to end consumers.
This business model allows defined customers to be reached using a particular technology
and a particular way of coordinating production and marketing between several enterprises. The
value chain describes all the activities that make up the economic performance and capability of
the firm or industry as a whole. It portrays the activities required to create value for customers of
a given product or service (Pitt and Lei, 2006). It is also a frame work by which stakeholders can
34
determine the strength and weaknesses of each activity vis-a-vis competitors. The term Value
Chain refers to the fact that value is added to preliminary products through the combination of
other resources. It is therefore the entire series of organizational work activities that add value at
each step from raw material to finished products. The value chain consequently can encompass
“the supplier’s supplier to the customer’s customer” (Robbins et al, 2012). Depending on the
issue of interest, values accruing to different groups of economic actors or to different places can
be estimated (ILO, 2006; Kaplinsky and Morris, 2000). It should be noted that increased
globalization of markets, trade liberalization, advances in information technology, consumer
preferences and improved logistics means that the competitiveness of industries in various
regions and countries, as affected by the performance of their value chains, is becoming
increasingly important and will be even more important in the future. The value chain approach
is helpful for analyzing competitors that share a market position based on similar values and cost
drivers,(Walker, 2009). In the value chain approach, the various components are not examined
independently. Katsioloudes (2006) examines this approach and concludes that rather than
simply looking at the organizations as a whole, the interaction of organizational processes should
also be examined. The objective of increasing productivity compared to competitors is to
carryout intervention mechanism that raises value to the customer or lowers cost and leads to net
improvement on the firm’s market position. Walker (2009) identifies two sets of drivers. These
are the value drivers (technology, quality, delivery, breath of services, and environmental policy)
and cost drivers (economies of scale, economies of scope, low input cost, organizational
practices, and vertical integration). Value chain management then comes in as a process of
managing the sequence of activities and information along the entire value chain. In sum, the
concept of value chain provides a useful framework to understand the production, transformation
and distribution of a commodity or group of commodities with its emphasis on the coordination
35
of the various stages of the value chain. Value chain analysis attempts to unravel the organization
and performance of a commodity system. The issues of coordination are especially important in
agricultural value chains, where coordination is affected by several factors that may influence
product characteristics, especially quality. The value chain framework also enables one to think
about development from a systems perspective, similar to the innovation system perspective.
Closely related to the value chain is the value system. Porter in 1988 introduced the ‘value
system’ as an alternative way of approaching the search of competitive advantage (Van den Berg
et al 2009). A value system includes the activities implemented by all the firms involved in the
production of a good or service, starting from basic raw materials to those engaged in the
delivery to the final consumers. The concept of value system is therefore broader compared to
the one of ‘enterprise value chain’ (Van den Berg et al 2009). However, in Porter’s framework,
the concept of value system is mostly a tool for assisting executive management in strategic
decisions. The value chain analysis, according to Porter’s approach, is therefore restricted to the
firm’s level neglecting the analysis of upstream or downstream activities beyond the company
(Fasse et al 2009). A third concept, the “Global Commodity Chain (GCC),” was introduced in
the mid 1990s by Gereffi and others. Gereffi et al (2005) utilized the framework of value chain to
examine the ways in which firms and countries are globally integrated and to assess the
determinants of global income distribution. Global Commodity Chain (GCC) focuses on the
power relations in the coordination of globally dispersed, but linked production systems. Gereffi
and others showed that commodity chains are generally characterized by a leading party or
parties that determine the overall character of the chain. They went ahead to establish four core
elements: (a) input-output structure, (b) territorial (international) structure, (c) institutional
framework, and (d) governance structure. The focus is set on governance referring to
institutional mechanisms and inter-firm relationships (Fasse et al 2009). This concept has been
36
applied in the area of quality assurance procedures such as in coffee (Ponte, 2002). Based on
Gereffi’s GCC, Messner (2002) developed the concept of the world economic triangle.
Messner’s concept is based on the assumption that actors, governance and regulation systems
determine the scope of action open to the regions in the global commodity chains. He determines
six critical aspects in an economic triangle as; actor constellations, interests, power structures,
situational mindsets, action orientation and trust. This approach focuses on upgrading entire
regions or clusters through their integration into chains. Thus the economic triangle theory links
horizontal (cluster development) and vertical approaches (value chain) (Roduner 2004). The
global commodity chain concept has also been further developed into the Global Value Chain
Concept reflecting a more dynamic view of chain governance (Sturgeon 2008, Gereffi et al
2005).
Another concept which is similar in some respects to the value chain is that of the
“filiere” (whose literal meaning in French is that of a “thread”). It is used to describe the flow of
physical inputs and services in the production of a final product (a good or a service). There is
essentially not different from the value stream concept of Porter. The ‘filière concept’ targets a
structured understanding of economic processes within production and distribution systems
(Raikes et al., 2000), except that this is limited to national boundaries.
With the concept of value chain, enterprises are no more treated as a single entity but as a
part of an integrated chain of economic functions and linkages across geographic boundaries
(Gudmundsson, et al, 2006). In any value chain, one member is the buyer of the previous
individual and the supplier for the later member. All members of the value chain share the same
purpose: produce final products that satisfy final customers’ needs and requirements. They are
tied up to work altogether in order to attain such purpose, while maintaining their independence.
They work in cooperation for a long time, discuss and solve problems together. Passing through
37
the chain, the product gains some value. The chain of activities as a whole gives the product
more added value than the sum of independent activities (Raikes et al., 2000). The value chain
exists if and only if all members in the chain cooperate to deliver maximum value at the least
possible total cost to the end customer (Gudmundsson, et al, 2006).
One question could arise when the value chain is studied: Is the value chain and supply chain
different? Physically they are the same because they both overlay the same network of members
who are tied up with each other to provide goods or services to the final customers. The supply
chain, as the name implies, focuses mainly on the costs and efficiencies of supply. The supply
chain is meant to bring materials into manufacturing operation and finished products to
customers smoothly and economically. The notion that a supply chain must “add value” is trying
to blur the distinction between a supply chain and a value chain (Feller et al, 2006). A supply
chain seeks to match demand with supply using the minimal inventory. The driver behind Supply
Chain Management is to remove inefficiencies, excess costs and excess inventories from the
supply pipeline which extends from the customer back through his suppliers and through his
suppliers' suppliers and so on back (Deveshwar and Rathee, 2010). Various aspects of optimizing
the supply chain include liaising with suppliers to eliminate bottlenecks; sourcing strategically to
strike a balance between lowest material cost and transportation, timely implementing techniques
to optimize manufacturing flow; maintaining the right mix and location of factories and
warehouses to serve customer markets, and using location/allocation, vehicle routing analysis,
dynamic programming and, of course, traditional logistic optimization to maximize the
efficiency of the distribution side whereas, the value chain lays its focus on value generation for
customers. Robbins and Coulter, (2012) summarize this by stating that while the supply chain is
internally oriented and focuses on the efficient flow of incoming material (resources to the
organization, value chain is externally oriented and focuses on both incoming and outgoing
38
products and services”. They conclude that “value chain management is effectiveness oriented
and aims at creating the highest value for customers”. Thus, the primary difference between a
supply chain and a value chain is a fundamental shift in focus from the supply base to the
customer (Feller et al 2006).
2.2 Value Chain analysis Model
Value Chain approaches emerged out of a desire to more equitably spread the benefits of
globalization and economic growth. In recent years it has become obvious that while
globalization has brought benefits to developing countries in terms of increased growth and,
often, poverty reduction, it has also brought threats such as increased inequalities between and
within countries (UNIDO, 2007). Value Chain Analysis (VCA) emerged as a new research
technique to answer questions on why this occurs and what constraints face poor people and
places in better contributing to and benefiting from economic growth. Value chain analysis
(VCA) is a method for accounting and presenting the value that is created in a product or service
as it is transformed from raw inputs to a final product consumed by end users (World Bank,
2007).
Figure 11: Value chain analytical framework
Adapted from Kaplinsky R. and Morris M, and modified by Author.ACTORS (Inputs suppliers → Farmers → Traders → Processors → Retailers →Consumers
Extension
services
Transport
ers
Financial OthersResearch
INFLUENCERS (Regulatory framework, policies, infrastructures, etc)
Facilitating services
39
Source: Adapted from Kaplinsky and Morris 2002 Source: adapted from UNIDO (2007)
Figure 11 above depicts basically three levels of value chain participants:
UNIDO (2007), brought out three levels of value chain participants as follows:
Value chain actors: The chain of actors who directly deal with the products, i.e. produce,
process, trade and own them. They include input suppliers, producers, collectors, processors,
wholesalers and retailers.
Value chain supporters: They provide services but never really participate directly but their
services add value to the product at a given level of the chain.
Value chain influencers: They include policies, regulatory framework, infrastructures, and the
operating environment.
Any value chain operates in an environment which is formed by the macroeconomic
landscape, policies and regulations, institutional elements and facilitating services (UNIDO 2007).
These elements of the environment, although not directly involving in the production and
distribution, do influence the performance of the value chain. UNIDO (2007) posited that rules and
regulations govern activities of members of the value chain, and that “rules and regulations can
be set up by actors within the chain as in the case where a buyer who requires its suppliers to
provide high quality materials”; or “they can be established by external actors like governments,
NGOs, and other organizations”. Institutional elements may fall into laws, finance, technologies,
human development, standards, property rights, research and development…. Such elements
influence the performance of the value chain. Finally, facilitating services includes transport,
packing, storage, communications, import and export services…. As its name implies, supporting
services facilitate the operation of the value chain. For instance, transportation is an important
key to the fast and on time delivery of goods which is vital in preserving product quality and
value. An efficient transport system can translate to savings in delivery cost, inventory, quality
40
deterioration and wastage. Information and communications technology is important in attaining
cost efficiency, responsiveness to consumer’s requirements and reliability in delivering the right
kind of product and volume of product required by the market. All activities performed by
members of the value chain as well as its environment together constitute the value chain
analysis model. The interrelations amongst the various actor and components constitute the
linkages. Value chain analyses are a good way to understand relationships and linkages among
buyers, suppliers, and a range of market actors in between. The participants may not be aware of
the linkages between their operation and other upstream or downstream participants. These
relationships amongst value chain participants can be coordinated to improve the overall
competitiveness of the final product.
As Value Chains describe economic production in a way that is closer to real life, value chain
analysis is better able than traditional economic and social analysis to deal with questions of
equity and income distribution (Kaplinsky, 2000). Value chain analysis also focuses on inter-
linkages within the productive sector. It is able to analyze economic activities that are linked
across different sectors (for example, agricultural production, industrial processing and then
distribution through wholesale and retail services). It is also able to analyze linkages between the
formal and informal sectors, as in real life, economic activity is not rigidly separated (Kaplinsky
and Morris 2000). Importantly, value chain analysis is designed to point out the differing
distribution of power and, consequently, value acquisition across the chain. In this way, the main
barriers or problems that inhibit certain segments in getting more benefits from the chain can be
identified and addressed. In value chain analysis, all inputs and outputs carry forward their
inherited value from the previous stage. The analysis consists of identifying chain actors at each
stage and discerning their functions and relationships; determining the chain governance, or
leadership, to facilitate chain formation and strengthening; and identifying value adding activities
41
in the chain and assigning costs and added value to each of those activities (Keyser,2006). The
flows of goods, information and finance through the various stages of the chain are evaluated in
order to detect problems or identify opportunities to improve the contribution of specific actors
and the overall performance of the chain (UNIDO, 2009). Focus is therefore on cost levels at
different stages as a key determinant of international competitiveness. The value that a firm
creates is therefore the profit margin (value created and captured – cost of creating the value =
Margin). By looking at the cost composition at each stage of the value chain and comparing
these costs with world standards, value chain analysis not only shows if the country is
internationally competitive, it also helps identify key stages where costs can most effectively be
reduced.
2.3. MAPPING THE VALUE CHAIN
The value chain analysis starts with the process of mapping out the value chain. Mapping a
chain means creating a visual representation of the connections between businesses in value
chains as well as other market players (ILO, 2009). Making a value chain map is a way of
making what is seen and encountered more easily understood: “A picture is worth a thousand
words” (ILO, 2008). Value chain mapping is meant to provide a broad picture of the value chain
to be studied. “There are many potential dimensions of a value chain which could be included in
the mapping exercise”. “Therefore it is crucial to choose which dimensions are to be mapped,
based on available resources, the scope and objectives of the value chain analysis and the
mandate of the organization” (ILO, 2008).
2.4. VALUE CHAIN GOVERNANCE
Of the three elements of the surrounding environment of a value chain is rules and
regulations. Rules and regulations are the product of value chain governance. The value chain
42
has been transformed into an analytical concept in that the various activities in the chain – within
firms and in the division of labour between firms – are subject to what Gereffi has usefully
termed ‘governance’ (Gereffi, 1994). Humphrey (2006) further described it as the definition and
enforcement of instructions relating to what products are to be produced (product design), how
they are to be produced (process controls) and when (timing). Value chains imply repetitiveness
of linkage interactions. Value chains are governed when parameters requiring product, process,
and logistic qualification are set which have consequences up or down the value chain
encompassing bundles of activities, actors, roles, and functions. (Kaplinsky and Morris, 2000).
Governance ensures that interactions between actors along a value chain exhibit some reflection
of organization rather than being simply random (Kaplinsky and Morris, 2000). It also implies
that transactions between actors in the value chain are organized in a system that allows firms to
meet specific requirements in terms of products, processes, and logistics in serving their markets.
As such, it recognizes that power is not evenly distributed. Governance refers to both “official”
rules that address output and the commercial imperatives of competition that influence how
production is structured (ILO, 2008). In fact, governance refers to rules and regulations which
are set up by actors within the chains or by those who lie outside the chain like governments,
NGOs, and ISO organization. These may be as simple as the requirement imposed by
wholesalers that agricultural products be correctly harvested to prevent damage and degradation.
Conversely, they may be as complex as a foreign government’s enforcement of international
standards regarding permissible levels of pesticide residues on imported products. Kaplinsky and
Morris, (2000) proposed how rules and regulation should be categorized. They brought out two
sets of factors which can be used to categorize different types of rules. The first is the extent to
which they are codified. The standards may be set in legal codes, and subject to fines if
transgressed. They may also be internationally recognized, and widely used, even though they
43
have no legal basis. This recognition may be less than global, but cover a number of product
markets, or they may be firm specific. The second axis is whether the rules cover products or
processes.
2.5 ENABLING ENVIRONMENT AND INTITUTIONAL ARRANGEMENT
While support activities are not directly involved in the production and movement of the
product, these activities have critical impact on the efficiency of production and distribution.
Support activities serve as the value chain’s enabling environment. These support activities
include: (1) Policies, Rules, and Regulations, (2) Infrastructure and Enterprise Development
Facilities, (3) Research and Technology, and (4) Socioeconomic and Cultural Considerations,
Policies, Rules, and Regulations, Laws and regulations to govern the standardization of services
(CEDAC, 2008). The commitment of government to value chain development of the agriculture
sector, in general, can be seen from policy directions as contained in its medium term
development program as well as in the number and quality of laws and regulations that tend to
create a business environment conducive for growth in the value chains. These may include
infrastructure and enterprise development facilities, and transportation infrastructure (UNIDO,
2006).
2.6. ANALYSIS ON COSTS AND EARNINGS
After the value chain is mapped, certain aspects of the value chain could be put into analysis
for better insights. Among them is the analysis on costs and earnings. The analysis on costs and
earnings aims to provide a notion on costs incurred by different actors as well as revenues and
profits they earn in return (Bellù, 2013). Costs are classified into variable or fixed costs
(Wonnacott and Wonnacott, 1982). Variable costs are costs that vary in proportion with level of
output. On the other hand, fixed costs are costs that are independent on the level of output. Not
all costs are easily to categorize into fixed or variable costs. Assumptions in some cases are
44
therefore needed. However, regardless of which choice is made, consistency throughout the
analysis is required. In the analysis, shares of cost components are exhibited, by which activities
causing exceptionally high cost could be singled out. And by comparing revenues with costs, the
analysis reveals how much different actors earn from their businesses (Bellù, 2013).
2.7 DISTRIBUTIONS OF REVENUE, COST AND PROFIT
The revenue (or retail price) is made up of marketing margins belonging to different
actors in the value chain. Therefore, the marketing margin, showed in percentage, reflects the
distribution of revenue to different chain actors. Marketing margin is the difference between
selling price paid by the next stage and purchasing price paid to the previous stage. Marketing
margin must cover all costs needed to transfer the product from one stage to the next and a
reasonable return to those perform the job (Shepherd, 2007)
Contrary to other business development tools that focus on the internal performance of
businesses (e.g. management), value chain analysis about understands the external networks in
which businesses are embedded (ILO, 2009). Value chain analysis is the process of breaking a
chain into its constituent parts in order to better understand its structure and functioning (United
Nations Industrial Development Organization, 2009). It helps to understand how and where
enterprises are positioned in economic processes. It also helps to identify new business
opportunities and possible leverage points for upgrading solutions (ILO, 2008). The analysis
consists of identifying chain actors at each stage and discerning their functions and relationships;
determining the chain governance, or leadership, to facilitate chain formation and strengthening;
and identifying value adding activities in the chain and assigning costs and added value to each
of those activities. The flows of goods, information and finance through the various stages of the
chain are evaluated in order to detect problems or identify opportunities to improve.
45
Another benefit to using Value Chain approaches is that they force stakeholders not only
look at the supply side constraints in a local economy but also at the demand side( World
Bank,2007). The traditional approach to regional development was simply to improve supply
side endowments within a specific territory or productive sector (e.g. infrastructure, human
skills, technology, etc). However markets increasingly have very specific requirements that are
often not known to local stakeholders - hence, their inability to effectively compete. Unless local
enterprises meet market requirements, national and especially international markets will al-ways
remain closed to them (ILO 2007)
Since the value chain concept entails the addition of value as the product progresses from
input suppliers to producers to consumers. The value chain, therefore, incorporates productive
transformation and value addition at each stage. At each stage in the value chain, the product
changes hands through chain actors, transaction costs are incurred, and generally, some form of
value is added. Value addition results from diverse activities including bulking, cleaning,
grading, and packaging, transporting, storing and processing (Anandajayasekeram and Berhanu,
2009). Value chains therefore encompass all of the factors of production including land, labor,
capital, technology, and inputs as well as all economic activities including input supply,
production, transformation, handling, transport, marketing, and distribution necessary to create,
sell, and deliver a product to a certain destination. The final aim is to make the local target sector
more competitive and ensure local value chain operators obtain maximum benefits.
The World Bank (2007) identified indicators that can be used to measure the performance of
a value chain. These include:
1. Cost
2. Time
3. Value added
46
4. Productivity
Cost and productivity are the underlying factors in determining the competitiveness of an
industry. Costs encompass both monetary costs (such as raw material costs, input costs, and
utility costs) as well as transactions costs (such as time delays, red tape, and regulatory barriers)
and Productivity is defined as the ratio of outputs to inputs (Coelli et al 2005). Productivity
depends both on the value of products and services (e.g. uniqueness, quality) as well as the
efficiency with which they are produced ((Anandajayasekeram and Berhanu , 2009)).
2.8 Agricultural value chain
By extension of the definition of a value chain, an agricultural value chain can therefore
be defined by a particular finished product or closely related products and includes all firms and
their activities engaged in input supply, production, transport, processing and marketing (or
distribution) of the product or products. One of the prime arguments put forward for value chain
adoption in the agricultural sector is “the reward for responding to increased specificity in
consumers’ demand” (Boehlje et ale 1999). This is because these customers expect quality
control and products with specific characteristics to be available when desired. The process of
cost reduction, risk reduction, inbuilt sustainability, and consumer responsiveness must be
assured.
Value chain analysis is conducted for a variety of purposes. The primary purpose of
value chain analysis, however, is to understand the reasons for inefficiencies in the chain, and
identify potential leverage points for improving the performance of the chain, using both
qualitative and quantitative data (Boehlje et ale 1999). Actors in a typical agricultural value
chain may include input suppliers, producers, itinerant collectors (small and mobile traders who
visit villages and rural markets), assembly traders (also called primary wholesalers who normally
buy from farmers and itinerant collectors and sell to wholesalers), wholesalers (who deal with
47
larger volumes than collectors and assemblers and often perform important storage functions),
retailers (who distribute products to consumers), and processors (firms and individuals involved
in the transformation of a product.
2.9 Value Chain Development (VCD)
Value Chain Development (VCD), on the other hand, involves taking all the information
generated by value chain analysis and doing something about it. The ILO (2007) defines VCD as
an improvement of cooperation between stakeholders of a particular sector and the coordination
of their activities along different levels of a value chain. This relates to improvements across the
“five triggers "of:
1) System efficiency,
2) Product quality and specifications,
3) Product cost,
4) Social and environmental standards, and
5) Enabling business environment.
This framework helps to identify opportunities and constraints, across the five issues, faced by
farmers, producers, processors, traders and other businesses at multiple levels along the given
value chain and design interventions to address them. This will include a wide range of
interventions such as facilitating access to cheaper or better inputs, strengthening the delivery of
services, enabling the flow of information, facilitating improved market access, or increasing
access to higher-value markets or value-added products.
While Value Chain Analysis offers a simple participatory way to analyze the potentials and
constraints within prominent economic sectors of the locality, Value Chain Development offers a
strategic way to address the opportunities and constraints facing the productive sectors of the
locality and its producers and businesses (Hobson, 2012)
48
2.10 Competitiveness.
Debate continues over the concept of competitiveness. Kagochi( 2007) points out that “no
single measure or definition of competitiveness has gained the universal acceptance of either
economists or management theorists.” There has been a profusion of definitions applied to
different organizational and spatial entities like firms, sectors, industries, regions, and states, and
to other areas such as the balance of payments, market shares, costs, and job creation.
For the nation, competitiveness seems to imply potential to achieve or maintain a high
standard of living based on resource and labor productivity (Enright, et al quoted in Kagochi,
2007). Consequently, there must be efficient allocation of resources and improve productivity.
The competitiveness of value chains depends to an important extent on the development of
business models that link small producers to the global value chain (Pieter van Dijk, 2012).
Productivity and efficiency are often cited as indicators or measures of competitiveness.
Michael Porter in1990 was one of the first to underline the importance of firms’ strategy and
structure in developing their competitiveness (Latruffe, 2010). He went ahead to state that
“competitiveness is revealed by performance indicators such as cost superiority, profitability,
productivity, and efficiency. For a firm, “competitiveness is the ability to produce the right goods
and services of the right quality, at the right price, at the right time (Latruffe, 2010). It means
meeting customers’ needs more efficiently and more effectively than other firms do. The more
value an organization or a firm creates, the more profitable it is likely to be.
Competitiveness in the agricultural sector focuses on the sustained increase in productivity in the
agribusiness sector as the result of better business strategies and improved micro-economic and
macro-economic conditions, (UNIDO, 2009*).
49
Measures of competitiveness in the traded sector include firm profitability, the firm's export
quotient (exports or foreign sales divided by output), and regional or global market share
(UNIDO, 2009). In the non-traded sector, competitiveness is the ability to match or beat the
world's best firms in cost and quality of goods or services (Latruffe, 2010). Measuring
competitiveness in the non-traded sector is often difficult, since there is no direct market
performance test. At the industry level, competitiveness is the ability of the nation's firms to
achieve sustained success against (or compared to) foreign competitors, again without protection
or subsidies (Latruffe, 2010). For a nation, competitiveness is defined as: the degree to which it
can, under free and fair market conditions, produce goods and services which meet the test of
international markets, while simultaneously maintaining and expanding the real income of its
people over the long term (World Bank, 2007). Drawing from the above definitions it can be
concluded that competitiveness is the ability to sell products that meet demand requirements
(cost, price, quality, quantity, availability) and, at the same time, ensure profits over time that can
sustain the firm or industry. This may be within domestic markets (in which case firms, or
sectors, in the same country are compared with each other) or international (in this case,
comparisons are made between countries). Competitiveness is therefore a broad concept with
relative measure. There is no agreement on how to define it, or how to measure it precisely.
2.11 Benchmarking
Benchmarking compares the performance of a value chain to itself at different points in time, to
another value chain in the country, or to a value chain in another country in order to establish the
current baseline position and provide comparative data to guide decisions and actions. Usually
quantitative indicators are used, such as yields, benefit cost ratio, time to market, pricing data,
and others (Webber and Labaste, 2010). Qualitative data can also be used, although such
information is harder to measure clearly and objectively. Secondary data for benchmarking
50
comparisons at regional national and international levels are usually used. In assessing a value
chain’s competitiveness, several key aspects can be usefully examined. First, it is important to
benchmark overall value chain performance, meaning how well the actors in the value chain
deliver products to the final consumer in comparison to other value chains and other countries.
Once the overall value chain is analyzed, it can be broken down into key performance
components, such as yields, transport efficiency, market access, unit price, and many others
(Webber and Labaste,2010).(
2.12 Review of Empirical Studies
Dereje (2007) used value chain approach to study the competitiveness of Ethiopian coffee
in the international market. The study indicates that Ethiopian farmers have low level of
education, large family size with small farmland and get only 3% of the retail price in the
German market. Thus, policy intervention was suggested to improve farmers’ performance.
Value chain study conducted on mango by Dendena et al. (2009) shows that the
subsector faces some challenges. Among others: highly disorganized and fragmented 21 industry
with weak value chain linkages, long and inefficient supply chains, inadequate information flows
and lack of appropriate production are explained as the major problems. The study recommended
institutional innovation to reduce the above challenges
A detailed case studies on value chains carried out in Brazil and Thailand, as well as in three
African counties(Mozambique, Nigeria, and Zambia) in 2009, shows that Africa is extensively
endowed with underdeveloped land resources (World Bank,2009). The study found that there are
substantial opportunities for farmers in Africa to regain international competitiveness and
improve national food security. Success in capitalizing on these opportunities will however,
depend on getting policies right, strengthening institutions, and scaling up investments in
agriculture. The potential competitiveness of agriculture in Mozambique, Nigeria, and Zambia
51
was gauged through value-chain analyses of six commodities well-suited to the Guinea
Savannah: cassava, cotton, maize, rice, soybeans, and sugar. A number of insights emerged from
the analysis. Farm-level unit production costs in the three African countries were comparable to
or lower than those in Brazil and Thailand, despite significantly lower yields per hectare. In
domestic markets, Africa’s producers can compete with imports given that high logistical costs
raise prices of imported commodities and provide “natural protection” upon which African
producers can capitalize. This same high logistical costs that shielded domestic producers are a
significant barrier to exports. African producers must absorb these costs if their commodities are
to compete internationally. Given the high costs of reaching international markets, Africa’s
producers were favorably positioned to serve regional markets. Demand in regional markets was
expected to grow rapidly as a result of population growth, income gains, and accelerating
urbanization. Domestic costs were high owing to deficiencies in transport, processing, and
storage infrastructure
Value chain analysis studies in Cameroon can be traced back to value chain analysis on
maize, cassava, poultry, and plantain carried out by World Bank team in 2008. This study
revealed that Cameroon has good potential to become a major food supplier to the region
because of its competitiveness in cassava, maize, and plantain; and that investments in these
sectors would not only improve food security but also lead to higher incomes. Some pre-
conditions posited include; Interventions to increase access and use of inputs and high-yielding
planting material by family farmers, increase efficiency of assembly and transportation.
The multiplicity of rice value chain studies depicts the importance of rice in the feeding
habits of most communities of the world and its contribution in the maintenance of food security.
A comprehensive value chain analysis on rice has not been carried out in Cameroon. In a study
carried out in the Niger basin of Niger, Mali and Nigeria in 2008, IFDC identified three areas for
52
improvement on the rice value chain in these regions. These include; the availability of credit
facilities, technical assistance to support the efforts to produce greater quality rice and publicity
that will emphasize to potential consumers the value and good qualities of domestic rice. The
study showed that though the benefit cost ratio was 0.33 on average for producers, if they
decided to retain ownership over their crop through the processing stage, their margins would
further be improved. The average profit margin of farmers was lower than what is obtained by
the wholesaler and retailer. Wong (2012) in a similar study in Lao found out that the farmers’
profit margin was higher than what the wholesaler and retailer earned. This was linked to high
yields and low cost of inputs at the farmers’ level. The quality of local rice was also another area
of concern. Rice produced locally in West Africa suffers a significant price discount in
comparison with imported rice. This appears to be at least partly due to perceived differences in
quality. Stryker (2010) affirmed that locally produced rice south of the Sahara generally has
more impurities mixed with it and is not of uniform grain size and color. He went ahead to state
that “The lack of product uniformity leads to longer cooking times and unpredictable
preparation”. He concluded that “cleaning and sorting this rice prior to cooking is time-
consuming and laborious”. There is great disparity in price offered to locally produced rice and
imported rice. While the imported rice is more expensive and available all year round the locally
produced rice is less expensive and floods the market immediately after harvest Stryker (2010).
This is also evident in great rice producing countries like Pakistan. Mehmood et al (2011)
reported that majority of the rice farmers in Pakistan emphasize on quantity rather than quality of
the products due to lack of information about demand and price. Molua (2010) points to a
scenario in Cameroon whereby in spite the increase in the price of imported rice, the quantity
imported continue to serge upward.
53
2.13 Limits of the value chain approach
Bellù (2013) posits some shortcomings of the Value chain approach. These include the fact
that the analysis mostly relies on the build-up of agents accounts to describe technical relations
and it allows for distributional and impact assessments, as well as for competitiveness and
protection appraisals. Hence, it can be considered as an accounting framework and not a
behavioural model, since no particular assumptions are made on agents’ behavior. As a
consequence, agents’ reactions to shocks cannot be anticipated and taken into account, unless
causal relations are borrowed from theory. He continues that another feature of value chain
analysis lies in its lack of a time dimension. Despite being usually carried out with reference to a
specific accounting period (i.e., a given year), it does not explicitly considers the impact of time
on the variables considered. Hence, we call it a “static” framework. He concludes that, value
chain analysis is not a stylized representation of the whole economy, but an in-depth description
of a specific segment of it giving only a partial vision of the economy and requiring a large
amount of data.
54
CHAPTER THREE
3. RESEARCH METHODOLOGY
3.1 METHOD OF DATA COLLECTION AND ANALYSIS
3.1.1 METHOD
The value chain theory is the foundation on which the research is conducted. The value chain
analytical frame work is used to understand the various aspects of the rice value chain with focus
on the identification of actors, critical issues and blockages that undermine value chain
development. This is followed by the identification of business and technological opportunities
that can enhance the performance and competitiveness of actors in the value chain and the
linkages amongst them. The research starts with the exercise of value chain mapping to provide
a glance at the value chain of Ndop rice. The exercise includes (1) mapping core processes, (2)
mapping direct actors, (3) mapping the product flow, and volume of product (4) mapping
institutions and services feeding into the chain, and (5) initial identification of linkages between
actors.
In order to reveal the costs incurred at the farming stage, distributions of revenue, cost
and profit, data on costs and selling prices are required. Benchmarking of key indicators such as
yield, production cost, and benefit cost ratio used data from primary and secondary sources.
Profit, added costs and marketing margins were then calculated. Afterward, the distributions of
revenue, cost and profit to different actors in the value chain were graphed. The research results
were interpreted. Finally, in order to understand the preference for rice (local and imported)
consumers (households, hotels and restaurants) were interviewed. A SWOT analysis was
conducted to reveal the areas of blockages and opportunities for the improvement of the
competitiveness of the value chain.
55
A focused group was built from farmer’s representatives of the Ndop rice federation made
up of 21 farmer representatives and 6 Agricultural Extension staff working in the area. 50
randomly selected rice farmers in the Ndop Rice production basin were targeted but 48
questionnaires were effectively completed and returned. Since the number of input dealers,
collectors and millers was too small, all were targeted for interview. 8 private rice millers out of
9 and 13 rice collectors out of the 16 were interviewed. The 3 other rice collectors not
interviewed could not be reached due to their long absence from the area. Identified 5 input
dealers were reached. A random sampling of wholesalers and retailers was done in Ndop study
area and Bamenda town which is an urban center where both local and imported rice are sold.
For consumers, considering their large number, a random stratified sample was used. This was
drawn from the study site and Bamenda urban center. This involved 15 hotels and restaurants
and 35 households. Key informants were selected from the Divisional Delegation of Agriculture
and Rural Development of Ngoketunjia Division, UNVDA, and Research Center. All the 3
microfinance institutions; MC2, Ngoketunjia Credit Union, The Peoples’ financing were
interviewed. This was through semi structured questions.
3.1.2 Data collection
Ndop plain was purposively selected since it is a rice producing area where UNVDA is
installed. Data collection was carried out during the months of October and November 2013.
Appropriate primary and secondary data were collected and analyzed so as to achieve each of the
stated objective and to answer the research questions of the study.
3.1.2.1 To identify the main actors/stakeholders in the value chain, data was gathered through
literature review, interview with rice farmers in Ngoketunjia Division using semi structured
questionnaires. This was the same case with the middlemen/processors thanks to the
56
collaboration of the staff of UNVDA and the Divisional Delegation of Agriculture Ngoketunjia
who acted as key informants.
3.1.2.2 To identify the activities of the main actors and stakeholders with respect to their
functions, linkages, attitude and practices in the rice value chain, structured questionnaires with
open and closed ended questions were administered at the level of the farmers, collectors and
processors. Semi structured questionnaires were administered to key informants from UNVDA,
Research and the Divisional Delegation of Agriculture Ngoketunjia who provided valuable
information. This was complemented with information gathered during focused group discussion
with farmers and agricultural extension staff.
3.1.2.3 To assess the current costs and earnings of value chain activities, and evaluate the
distribution of revenue, cost and profit along the value chain, data from focused group discussion
and interviews with structured questionnaires administered to collectors/processors, wholesalers,
and retailers. Secondary data from technical reports and accounting documents of UNVDA were
also used.
3.1.2.4 Data for benchmarking of key indicators along the value chain to detect performance
gaps and reason for such gaps, included; production yields per hectare, total cost of production,
total revenue. This was collected during focused group discussion with the farmers and
agricultural extension staff. Secondary data used for comparative purpose emanated from
technical production records of UNVDA, as concerns yields. These were to be benchmarked
against data from other secondary sources obtained during literature review notably; production
costs structure, benefit cost ratio, and yields from other areas and countries.
3.1.2.5 To identify challenges (weaknesses and threads), existing opportunities and entry
points available for upgrading the value chain, data was derived from SWOT analysis carried out
57
during focused group discussions with farmers, information from key informants and personal
observations.
3.1.3 Data analysis
Qualitative and quantitative data analyses are employed. System of thematic analysis was
used for the data that were collected through focused group discussion, key informant interviews,
personal observation and secondary documents. Functional analysis was used to identify the
various actors and their roles in the value chain. Partnerships and linkages were analyzed in their
historical and contemporary context to understand their strengths and weaknesses. Tools used
included chain mapping and actor linkage matrix to depict all activities, actors, and relationships
among segments of the chain, and the interactions between producers and intermediaries. The
analysis was generally descriptive.
Quantitative value chain analysis is focused on the amount of money a customer is
willing to pay for a firm’s output (Keyser, 2006). Fundamental tools for this analysis were the
“Production account” and the “Income account” for a given period. This enabled the computing
of the following parameters:
a) Cost of Production and Gross Margin
Y =∑P1x1 + P2x2 + Px3……..+Pnxn
Where,
Yc= Cost of production
P= Cost price of an item
x= cost item
n= number of items involved
58
b) Profit: This is the difference between the total revenue and the total cost incurred
before tax. This is computed as the selling price minus the total cost of
production at each stage of the value. Marketing margin must cover all costs
needed to transfer the product from one stage to the next and a reasonable
return to those performing the job (Shepherd, 2007).
c) Distribution of added costs (value added), revenue and profit. (Added costs reflect
efforts of different chain actors in adding values to the final product.). Total cost of
the final product sold to the final customer is constituted of added costs incurred by
different chain actors. Added costs reflect efforts of different chain actors in adding
values to the final product. The revenue (or retail price) is made up of marketing
margins belonging to different actors in the value chain. Therefore, the marketing
margin, showed in percentage, reflects the distribution of revenue to different
chain actors (figure 3). Marketing margin is the difference between selling price
paid by the next stage and purchasing price paid to the previous stage. Finally,
profit from selling the final product to the final customer comprises of profits accruing to
different chain actors
d) Benchmarking of key indicators of competitiveness such as yields/hectare, selling prices
production cost and benefit/cost ratio are compared with those of other areas or countries
where rice is produced. Benefit/Cost Ratio Analysis: Benefit Cost Ratio is denoted by
B/C where
B = selling price (revenue) - total cost
C= total cost.
59
Benefit /Cost Ratio can also be expressed as; profit before tax/ Total Cost. This is an indicator
of profitability for benchmarking purposes.
Descriptive statistics such as simple measures of means, frequencies, percentages and cross
tabulations are used for the survey data gathered from sampled farmers, middlemen/processors,
retailers, wholesalers and consumers.
The use of SWOT (strength weaknesses, opportunities, and threads) analysis was also
employed to assess the constraints and opportunities for increasing profitability along the value
chain and to propose a feasible value chain development strategy.
The analyzed data are presented Processing mills have to use more than 1kg of paddy rice to
produce 1kg of white rice, that is, 1.587kg for private mills and 1.539kg for UNVDA mill
considering conversion rates of 0.63 and 0.65 respectively. Thus, purchase price for 1 kg of
white rice is that of 1.587kg and 1.539kg of paddy rice respectively. Therefore, cost per kg and
selling price received by farmers and middlemen have to be re-scaled into cost and price per
1.587kg and 1.539kg of paddy rice respectively using tables, graphs and charts.
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CHAPTER 4
4 PRESENTATION OF RESULTS AND DISCUSSION
4.1 DESCRIPTION OF THE STAGES, ACTORS AND STAKEHOLDERS IDENTIFIED
FOR THE NDOP RICE VALUE CHAIN
4.1.1 Ndop Rice Value chain stages
The main stages of the Ndop rice value chain identified are:
Input supply, farm production, collection, processing, and marketing which are presented in
Figure 12 and further discussed and described.
Figure 12: Value chain stages for Ndop Rice
Source: Generated from Value chain mapping exercise.
4.1.1.1 Input supply: This stage is concerned with the sourcing of raw materials required for
the production, processing, and marketing of rice. They are all procured locally.
4.1.1.2 Farm production: This stage is concerned with primary production and ends with
the sales of paddy rice at the farm gate. These transactions may occur literally at the farm gate or
at some other point where the farmer hands over ownership of the product to the next value chain
participant. Depending on the state of the paddy rice, some type of primary processing (such as
the drying, winnowing and bagging of dry grain) may take place at the farm level
Input supply Farm production Collection Processing MarketingConsumer
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4.1.1.3 Collection/Assembly. This stage involves the collection and bulking of paddy rice from
many farmers and the delivery of the paddy rice to a miller/steamer or UNVDA for processing
and packaging.
4.1.1.4 Processing. The processing stage involves the winnowing, sorting, steaming (in the
case of parboiled rice), hulling, grading and packaging of rice.
4.1.1.5 Marketing (Wholesale/retail). The stage is concerned with the delivery of rice
through wholesalers and retailers to the final consumer. In the case of Ndop rice the consumption
is mostly internal or within Cameroon except for what is smuggled into Nigeria.
4.2 DESCRIPTION OF IDENTIFIED NDOP RICE VALUE CHAIN ACTORS,
STAKEHOLDERS, FUNCTIONS AND LINKAGES
4.2.1 Main actors
The main actors/holders identified in the product flow chain are; the input dealers who
supply inputs to the farmers, the farmers who are located at the production basin, the middlemen
who collect and assemble paddy rice from the farmers and sell to processors, the processors who
carryout milling and bagging, the wholesalers and retailers who are involved in marketing, and
the domestic / foreign consumers.
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Figure 13: Value chain mapping of product flow to show main actors.
LOWLAND RICE PRODUCERS
PRIVATE
PROCESSORS
STEAMERS
MILLED
RICE WHOLESALERS
MILLED RICE
RETAILERS
UNVDA
(PROCESSOR)
CONSUMERS
EXPORTERS
Intermediaries
Inputs suppliers
Source: author (generated from product mapping process)
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Figure 13 depicts the physical flow of the product. Production is carried out in the swamps which are
located in the production zones. After harvest, farmers either transport the paddy rice to their various
homes for storage or the produce are carried directly to the weighing stations of UNVDA for winnowing,
weighing and recording for subsequent payment.
Some middlemen whom in most cases had pre-financed the production process collect the paddy rice
directly from the farms. Steamers and private processors also purchase rice directly from the farmers.
Processing is done either in the UNVDA rice mill or in small private mills located in the vicinity.
Some private rice mills are found in Bamenda located about 48km from the production basin.
Marketing of rice is carried out by wholesalers who buy in bulk and carry to cities like Bamenda,
Douala, Yaounde, and Bafoussam. It is then supplied to retailers.
UNVDA has created sales points at Ndop, Bamenda, Yaounde, and Douala were rice is being retailed
to consumers. It should be noted that some of the rice is being smuggled through Ndonga Mantung, and
Menchum Divisions into Nigeria. Since this is an illegal venture. Records of exported quantities are not
available
4.2.2 Support services
Although they are not directly involved in the production and distribution, support services presented
do influence the performance of the value chain. They facilitate the operation of the value chain.
Table 7: Summary of value chain support services
STAGE OF THE CHAIN
AGENTS. FUNCTION OUTPUT
PRODUCTION UNVDA, MINADER, IRAD Technological transfer, training of farmers.
Improved seeds, fertilizer, improved production techniques.
Infrastructural development Farm to market roads, irrigation canals, damps, land development
Microfinance institutions MC2, Credit Unions, Peoples financing.
Provide credit facilities and inputs to farmers.
LoansInputs (fertilizers)
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UNVD, Collector/millers.Collection. Microfinance institutions
MC2Provide credit facilities Loans.
Processing. Microfinance institutions MC2
Provide credit facilities Loans.
Marketing. Microfinance institutions MC2
Provide credit facilities Loans.
Source: survey results/ chain mapping exercise.
The table provides a summary of their activities which involve all the main stages of the value chain.
4.2.3 Functions and linkages of actors and stakeholders
All the activities performed by the various actors in the value and the environment in which they
operate constitute the value chain analysis model.
Table 8: Summary of Ndop rice value chain actors/stakeholders their functions, and output
STAGE OF CHAIN AGENT FUNCTION OUTPUTINPUT SUPPLY UNVDA, MINADER,
Unconventional pesticide dealers
Technological transfer and farmers training
Provide pesticides, fertilizers, seeds
PRODUCTION farmers Farming. Paddy riceCOLLECTION Millers, UNVDA,
intermediariesCollect and supply Paddy rice
PROCESSING UNVDA, private millers/steamers.
Processing of paddy rice
White / parboiled rice and associated by-products
MARKETING UNVDA, millers Sale of rice White / parboiled rice and associated by products
Wholesalers and retailers. Purchase and sale of rice
White / parboiled rice and associated by-products
CONSUMPTION Domestic and foreign consumer.
Purchase of Ndop rice. Customer satisfaction
Source: Survey data.
Table 8 presents a summary of Ndop value chain actors/stakeholders, their functions, and output as
found in the main stages of the value chain.
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4.3. The Ndop rice value chain map
Figure 14 presents the Ndop rice value chain map, which is a visualized network linking the actors and the
various production processes as already presented in Table 8. The principal actors are; input suppliers,
producers, farmer organization, collectors, processors, wholesalers and retailers. And the support
organizations or services are; Microfinance institutions, Research (IRAD), Ministry of Agriculture and
Rural Development and businessmen. It should be noted that UNVDA is involved as an important actor
and also as a support structure.
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Figure 14: Ndop rice value chain map
sus
Provide credit facilities to farmers, retailers, millers and wholesalers
PRODUCTION COLLECTING PROCESSINGWHOLESALE –RETAILER MARKETING
CONSUMPTION EXPORTATION
BUSINESSMEN
INDIVIDUAL FARMERS
INTERMEDIARIES
PRIVATE MILLERS/steamers
WHOLESALECONSUME
UNVDARETAIL
COMMON INITIATIVE GROUPS
UNVDAEXPORT
Paddy rice White/parboiled rice and by products
MC2/ CREDIT UNION, PEOPLE FINANCINGNJANGGI
AGRIC EXTENSION WORKERS of MINADER
IRAD
Source: author (generated from activities of actors/linkage
Support SERVICES
INPUTS SUPPLY
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Figure 14 presents the different actors along the value chain and the existing linkages. The
arrows indicate the interconnectedness of the various stakeholders and actors in the chain, which
are described below.
4.3.1 Inputs Suppliers
The main input suppliers in rice production are the Upper Noun Valley Development
Authority UNVDA, retail shops and farmers. There are presently five retail shops identified in
the Ndop plain. They supply fertilizers and pesticides. Some farmers are involved in the
production and sales of certified commercial seeds. They acquire the basic seeds from IRAD
Yaounde, which are then multiplied to produce commercial seeds for sale to other farmers.
Table 9: Rice seeds produced in Ndop plain
s/n
producer Locality. Variety.Farm size ha
Quantity tons
1 MAFAC CIG Babungo TOX'S-4532 5 252 MAFAC CIG Babungo TOX'S-4538 5 303 NGWANA GENESIS Bamuka TOX'S-3145 1 10
4NDUMCHUNG BENEDICTA
Bamuka TOX'S-3145 1 5
5 Ngoketunjia milla Union CIG Bamuka TOX'S-3145 2 2.56 Ngoketunjia milla Union CIG Bamuka NERICA-3 2 2
7New Rice For Africa Union C.IG
BamukaNerica rice 4256
1 5
8 Ngoketunjia-Ndop-BambalangBambalang
TOX-3145 1 8
87.5Source: annual report of the Regional Delegation of Agriculture and Rural Development, NW.
Table 9 shows the various seed varieties produced by framers and the number of farmers
involved in this venture. The seed produced are sold to farmers at 500FCFA per kg. In 2012, 8
farmers were involved in this exercise and produced and distributed 87.5 tons of rice seeds.
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UNVDA also supplies seeds. In 2012, 38.25tons of improved seeds were available. If this is
added to the seed produced by farmers, this will give a total of 125.75 of the expected 148.5 tons.
This constitutes 84.6% of seeds needed. This indicates that only 15% of seed planted were
recycled seeds. The price of improved seed is 150FCFA/Kg (focused group discussion). This
was confirmed by the authorities of UNVDA.
Table 10: Fertilizer and pesticide distribution sources and prices
TYPEOF FERTILIZER
AND PESTICIDE SUPPLIED.
UNIT AVERAGE PRICE PER UNIT FCFA
DIFERENCE % DIFFERENCE
UNVDA RETAILERS
Fertilizer – NPK 20 10 10
50kg bags
20,000 22,000 2,000 10
Fertilizer - urea 50kg bags
19,500 20,500 1000 5.13
Herbicide- herbextra 1 litre 3,500 3800 300 8.57
Source: compiled from survey and focused group discussion)
Table 10, presents the different sources through which farmers acquire fertilizers and
pesticides. 66% of the farmers interviewed acquired fertilizer through UNVDA. The most
important reason for choosing UNVDA, is the low price offer compared to other sources. 58% of
farmers interviewed had signed contracts with UNVDA for the supply of inputs on credit basis.
The existence of input supply contracts also facilitated the acquisition of inputs. Fertilizers and
pesticides supplied through UNVDA are acquired directly from importers and no taxes are
incurred at the local level (Ndop). But local retail shops pay global taxes and other charges.
Farmers could cut down costs between 5%-10% if they are organized to purchase their fertilizers
in bulk directly from importers as UNVDA is doing. This will also ensure that the products are
not of doubtful quality
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4.3.2. Producers
The average farm size per farmer is estimated at 0.24 hectares. This is too small for a farmer to
benefit from economies of scale. All the farmers interviewed indicated that they use fertilizers on their
farms. Also, 75% of framers interviewed used improved seeds. The availability of improved seeds,
fertilizers and the high adoption rate of their use by farmers are positive indicators for technological
improvement. These contributed to the high yields obtained by farmers (5.02 tons/hectare
4.3.3 Middlemen
Most middlemen operate as individuals. Competition remains the main reason they work
in isolation. In terms of communication, they use cell phones to link up with buyers. Focused
group discussions revealed that they work through presidents of the common initiative groups
who organize meetings with the farmers. During these meetings, some middlemen provide loans
to the farmers which are repaid using their harvested produce. Middlemen have sub agents
located in the small villages who receive rice orders from them. They do not have specific
buying point as they only settle in locations where rice is available and prices are favorable at
that time. They buy larger quantities of rice and sell either immediately or in most cases, they
hold the rice awaiting better prices. Some middlemen also sell to intermediate buyers who sell
the rice finally to processors. UNVDA also plays the role of collector. They collect paddy rice
directly from farmers and store for processing. There are presently 16 rice collectors including
millers, identified. UNVDA pays 120 fcfa/kg of paddy rice while the collectors purchase at
120fcfa/kg during the harvesting period and even more during off seasons. From interview
conducted, the price range for other collectors is between 120fcfa/kg to 180fcfa/kg for periods of
abundance and off season respectively. Data for collected rice by UNVDA is presented in Table
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11. This shows that from 2010 to 202 more 66.8% of the rice produced went through private
collectors. This indicates the important role played by this actor of the value chain.
Table 11: Percentage of rice production collected by UNVDA
Source: compiled from UNVDA annual reports.
Table 11 presents the evolution of paddy rice collected and processed by UNVDA. Data
collected from 2010 to 2012 show that highest percentage of rice hulled by UNVDA which has a
superior processing unit was 33.2%. This compromises the quality rice processed.
Figure 15: Trend of rice collected by UNVDA relative to total production
Source: Generated from table 11
PRODUCTION YEAR
TOTAL PRODUCTION
UNVDA Private collectors
Quantity of rice collected.
% collected
Difference
2009/2010 10,536 1832 17.4 82.6%
2010/2011 14,923 3134 21.0 79%
2011/2012 14900 4,945 33.2 66.8%
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Figure 15 present the trend of paddy rice collected by UNVDA. This indicates a progressive
increase though it is still below 35%.
35% of framers interviewed indicated that they had marketing contracts with UNVDA and
collectors while 65% had no marketing contracts. These marketing contracts are usually tied to
the pre-financing of production by UNVDA and middlemen through the provision of inputs to
the farmers for that which concerns the former and direct cash to farmers in the case of the latter.
Farmers’ fear of not benefiting from eventual increase in price and the fear of middlemen that the
farmers will not also respect the terms of the contract are the main reasons for the low number of
marketing contracts. This indicates that marketing is not assured and is not also organized.
Norms and standards are not pre-determined to ensure upstream quality of product supplied. This
may compromise the quality especially as 72% of collectors interviewed consider price as the
main determinant when purchasing the paddy rice.
4.3.4 Processors
Processors are located in Ndop town and within national electricity grid connections. There
are mainly two types of processors:
Small-scale plants are normally situated along the main roads with one rice mills. Ndop plain
now host nine of such mills/processors. They are also involved in steaming to produce parboiled
rice. There is a large scale superior plant owned by UNVDA. Other small scale private plants are
located in the urban center of Bamenda. These processors either buy directly from producers
and / or buy from middlemen.
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Table 12: Percentage of rice marketed through UNVDA.
YEAR TOTAL PRODUCTION
UNVDA PRIVATE PROCESSORS / OTHERS
Quantity of rice processed
% processed Quantity of rice processed
% processed
2009/2010 10,536 1832 17.4 8,704 82.6
2010/2011 14,923 3134 21.0 11,789 79.0
2011/2012 14900 4,945 33.2 9,955 66.8
Source : compiled from UNVDA annual reports.
Table 12 presents actors involved in processing. Presently private mills process more than
66% of paddy rice produced in Ndop.
Figure16: Evolution of processed rice by actors as a percentage of total paddy rice.
Source: Generated from table 12
Figure 16 shows the trend and quantity of rice processed by the various actors involved in
this activity. While UNVDA is gradually increasing, the quantity processed by private millers is
gradually dropping. This is explained by the revamping of UNVDA activities.
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The bulk of the paddy rice (66.8%) in 2012 was processed by private processors, using mills
which do not respect international norms for sorting, polishing and grading of white rice
(basmati 5% broken grains). This of course has a negative impact on the quality of grains
produced.
Table 13: Sources of paddy rice purchased by millers
Source of paddy rice Percentage of quantity supplied.
Purchased at farm gate 22%
Supplied by farmer at the mill 34%
Supplied by intermediaries 44%
Source: Survey results
The figures in Table 13 indicate that most of the paddy rice being milled is supplied by
intermediaries. This is followed by paddy rice supplied by farmers at the mills. The least is
paddy rice purchased at farm gate. The high level of involvement of intermediaries increases the
cost of the final product to consumers and reduces the revenue of millers from 93.374frs/kg to
76.497 frs/kg of white rice produced.
Millers interviewed revealed that the high level of broken grains (20-25%) was due to poor
quality of the paddy which was associated to the inadequate drying. This problem does not exist
in UNVDA as the paddy is usually well dried, humidity tested and paddy is further seasoned for
at least six months before hulling is carried out.
4.3.4.1 Activities associated to Processing: Activities associated to processing are; sorting,
winnowing, hulling, grating and packaging.
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Table 14: Analysis of activities of millers
Processing activities carried out by private millers
Targeted respondents (total of 9 hullers identified)
Respondents Respondentsinvolved in the activity
percentage
sorting 9 8 0 0%Cleaning (winnowing) 9 8 8 100%
Drying 9 8 8 100%Seasoning 9 8 3 37%hulling 9 8 8 100%grading 9 8 0 0%packaging 9 8 4 50%
Source: survey results.
Table 14 shows that private processors perform drying, seasoning, hulling and packaging
operations as survey results indicate. 37% of private millers also carry out seasoning. The control
of humidity remains a major problem as humidity instruments are not available. This negatively
affects the quality of milled grains. The high capacity (3.5 tons/hour) rice huller with automatic
grading, sorting, polishing and packaging capabilities, used by UNVDA, is underutilized. The
percentage of broken grains range between 8% -10% (stimates are done using sieve).
4.3.4.2 Products and by-products of Paddy Rice:
For the local mills only the white rice and the coarse rice brands are obtained. The products
from the UNVDA mill include: white rice, clean broken rice, industrial broken rice, fine rice
bran, coarse rice bran, and rice husk/impurities.
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Table15: Products and by-products of Paddy Rice.
DESIGNATION UNVDA% PRIVATE MILL%1 White rice 65 632 Clean broken rice 8 03 Industrial broken rice 7 04 Fine Rice Bran (FB) 5 05 Coarse Rice Bran (SM) 4 218 Rice husk/impurities 11 16
Source: interview with UNVDA /Millers.
Table 15 shows the different products and by-products produced by the two types of plants. It
also shows that the UNVDA plant produces 65% white rice as against 63% for private mills.
Parboiled rice is produced by UNVDA mostly on expressed demand and constitutes 2.3%
of total rice produced. Parboiled rice constitutes 3% to 5% of the total rice processed by
private millers. Failure of the small mills to carry out sorting and grading compromises the
quality. This is physically visible through observation as the white rice contained visible particles
of sand, seeds of weeds and other impurities. There is there a need for the use of improved
milling facilities that can carry out all the operations to ensure that the quality of polished rice is
improved. Using the private mills leads to loss in the quantity of white rice some of which is
retained as coarse rice brand.
4.3.5 Wholesalers / retailers.
Four wholesale shops exist in Ndop. The sources of their rice include millers and UNVDA.
The bulk of the produce is carried to urban centers; the closest being Bamenda town.
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Table 16: Sources of local rice sold by Wholesalers / retailers
TYPE OF RESPONDENT
NO. OF RESPONDENT
SOURCE OF PRODUCTUNVDA OTHER
LOCAL SOURCES
BOTH
Wholesale shops 12 out of 13 0 = 0% 5= 41% 7= 59%
Retailers. 44 out of 50 3= 6% 28 = 63% 13 =29%
Source: Survey data.
59% of the wholesale shops located in Bamenda and Ndop interviewed, indicated that they
got their products from both UNVDA and other sources while, 41% got theirs from other
sources. No wholesale shop depended on UNVDA alone for their supplies. In the case of
retailers, 6%, 63% and 13% procured their supplies from UNVDA, other supplies and both
UNVDA and other suppliers respectively. This trend was associated with the scarcity of
UNVDA processed rice. The availability of Ndop rice, especially that which is milled by
UNVDA was a problem as indicated by 23.4% of the wholesalers interviewed.
Table 17: Comparative price analysis of white rice from different sources
Type of rice Supply price by UNVDA FCFA/50kg bag
Average selling price FCFA/50kg bag
Marketing margin
NDOP White rice from UNVDA
17,100 18,100 1,000
Ndop white rice From millers
13,515 14,570 1,235
THAILAND 18700 19,750 1,050INDIAN 19,125 21,745 2,650 VIETNAM (NEIMA)
19,170 21,920 2,750
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Source: survey results and literature review.
Table 17 indicates that generally, imported rice is more expensive than locally produced rice.
The rice from the local mill is less expensive. This is due to the poor quality it presents, as
confirmed by all the wholesalers. The marketing margin is generally higher for imported rice.
4.3.6 CONSUMERS
50 households and 30 restaurants/ hotel owners were interview to appraise the availability
and quality of Ndop rice in general.
Table 18: consumers’ rice preference analysis
Catergory. Total no. interviewed
Those with preference for Ndop rice
Those who do not show preference for Ndop
Reataurant/hotel 30 9 = 30% 21 = 70%households 48 31 = 64.5% 17=35.5%
Source: Survey results.
70% of the hotels and restaurants do not consume Ndop rice. The reason advanced was that
the rice was difficult to cook and does not present well during serving. On the contrary, 64.5% of
households interviewed prefer Ndop rice while 17.35% do not. The taste of the rice was said to
be appealing. The difficulty in cooking, high level of impurities and its non-availability were
listed as problems.
4.4 DESCRIPTION OF IDENTIFIED NDOP RICE VALUE CHAIN SUPPORTERS
The value chain supporters identified are: Research and Extension providers, UNVDA, Ndop
rice farmers’ federation and Microfinance institutions.
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4.4.1 Research and Extension Providers
The Government through its various agencies such as The Upper Noun Valley Development
Authority (UNVDA), Institute of Research and Agricultural Development (IRAD), and the
Ministry of Agriculture and Rural Development, is a key stakeholder in the rice value chain as it
is responsible for policy development, review and implementation of policies; research and
extension services. This is outlined in the Cameroon’s National strategy for rice growing
document. (MINADER 2009)
4.4.1.1 INSTITUTE OF RESEARCH FOR AGRICULTURAL DEVELOPMENT (IRAD)
UNVDA and IRAD Yaounde indicated that IRAD Yaounde makes available basic seeds
which are distributed to farmers for the production of certified seed. The seeds are then
distributed to farmers for commercial rice seed production. The quality control department of the
Regional Delegation of Agriculture and Rural Development is involved in the control of the
quality of the seeds produced and distributed. IRAD stations provide agronomy support services
like advising farmers on production issues such as which varieties to grow, where and when.
Currently, there is a technology transfer program in all research stations whereby several
demonstrations have been mounted in selected areas and farmers are given inputs, mainly seed
and fertilizer, and technical know-how. The produce becomes theirs after harvest. This is then
passed on to other farmers. This was revealed during the focused group discussion.
4.4.1.2 Ministry of Agriculture and Rural Development
The ministry provides advisory services to farmers through the National Agricultural
Extension and Research project known by its French acronym as PNVRA. Material support in
the form of inputs such as fertilizers and herbicides, are sometimes provided. Seed control is
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carried out by the service of quality control. 100 tons of rice seeds were controlled before
distribution in 2012 (RDARD, 2013).
4.4.2 UPPER NOUN VALLEY DEVELOPMENT AUTHORITY (UNVDA)
The Upper Noun Valley Development Authority (UNVDA) activity plan indicates that the
organization intervenes directly in rice production by:
- Training extension staff and rice farmers
- Supervising and settling farmers on developed rice fields through field extension workers.
- Distributing and collecting payment for agricultural inputs(which is provided to farmers to
improve on production)
- Seed multiplication with pilot farmers and on the seed multiplication plots of the
Corporation
- Control of agricultural implements used by farmers
- Organizing water control and distribution in the farmers’ fields.
- Purchasing some of the paddy rice from farmers after harvesting.
- Processing and marketing of rice.
The effective execution of the above activities by UNVDA was confirmed by the farmers
during the focused group discussion.
4.4.3 The Ndop Rice farmers’ federation
The role of the Ndop rice farmers’ federation was brought out during the focused group
discussions. This apex farmers’ organization only plays an advocacy role, which is to negotiate
for fertilizer, and tractor services to be made available at the appropriate time to the farmers.
Other roles like information dissemination and the organization of farmers to benefit from
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economies of scale, remain very timid. The farm management committee under the Ndop Rice
farmers’ federation is charged with the identification of farmers working in developed rice fields.
The federation also assists in the distribution of developed land and in water management.
4.4.4 Microfinance institutions.
The main microfinance institutions involved are the Credit Union, Mutual community
credit (abbreviated as MC2), and The Peoples’ Microfinance. Their intervention in the value
chain was brought to light through semi structured interviews with the management teams of
the three institutions. Their activities consist of providing soft loans to farmers generally, with
an interest rate ranging from 18% to 24%. These are usually short term loans with three
months average duration. Repayment is done after the sales of produce. Though the credit
Union and the MC2 are the formals sources of loans to 21%, and 7% of farmers respectively,
the informal source (njangi) serves about 26% of the farmers interviewed.(see appendix VIII)
The management teams of these microfinance institutions also revealed that loans are
also provided to collectors, wholesalers, and retailers to finance their activities.
4.5 ATTITUDES AND PRACTICES OF VALUE CHAIN ACTORS AND
SUPPORTERS
Focused group and key informants affirmed that the extension staff of UNVDA are
readily available to assist the farmers technically. And that the Delegation of Agriculture and
Rural Development provides free improved seeds to farmers for multiplication. This is then
passed over to other farmers during the subsequent farming season.
Though credit facilities are available for financing activities through soft loans,
farmers still have the habit of waiting for grants either from government or other
nongovernmental organizations. 38% the farmers interviewed have never applied for loans from
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the financial institutions. They continue to use the informal financing sources. Reasons advanced
by the farmers interviewed, and the focused group include; the lack of collateral security, high
interest rate and non respect of production calendar in the loan repayment plan.
Local collectors always prefer the use of measuring instruments which are not
standardized. In many cases as mentioned during focused group discussions, they will prefer
using bags as a measuring unit than weighing the produce.
Farmers are deprived from an important source of income which is the rice bran. The millers
simply confiscate it. This has become a normal practice whereas it could constitute an important
source of income to the farmers.
4.6 INSTITUTIONAL ARRANGEMENT AND ENABLING ENVIRONMENT
UNVDA and the Divisional Delegation of Agriculture and Rural Development, iterated that
production of rice to ensure food security is one of the objectives of the Rice growing strategic
document. And that government has gone out on a total crusade for this goal of increasing
production and reducing importation of rice to be achieved. The government provides subsidies
to UNVDA to continue supporting rice production in the Ndop plain. These subsidies are then
used for the acquisition of irrigation equipment, construction of dykes and irrigation canals,
purchase and distribution of inputs to farmers in the form of a revolving fund.
The Ministry of Agriculture together with IRAD, provide improved seed materials for
multiplication by the farmers. The agricultural extension workers are trained by IRAD on
production technology and they in turn train the farmers. This was pointed out during the focused
group discussion and confirmed by a key informant from UNVDA.
Ndop provides a setting for the rice value chain due to its geographical location and
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favorable agro-ecology. The basin is a vast plain with fertile soils which are easy to work. Land is
available though only about 20% has been developed. The Bamenjim Dam provides water for
irrigation. Roads have been opened and this has made most of the farms accessible according to
farmers during focused group discussions. The government through UNVDA has constructed
water canals and bridges.
4.7 Governance and coordination.
No important rules and regulations that actors must comply to exist. Nevertheless, farmers
do prepare themselves to carry out the various farm operations simultaneously to respect of the
farming calendar and to facilitate water management. The seed control department of MINADER
is involved in the control of rice seeds produced and distributed by farmers.
Economic partnership contracts were established between the actors. Contracts for the
supply of inputs and for the sales of produce are established amongst the various actors. 58% of
farmers interviewed had established input contracts and 21 out of the 27 contracts established
were with UNVDA. These contracts were for the acquisition of fertilizers and pesticides.
Upstream, 35% of farmers interviewed were involved in marketing contracts with collectors and
millers. The fears they expressed were price uncertainty and lack of confidence.
Information need is important as all the farmers interviewed indicated a need for
information. Sources of information include the mass media and other farmers. Types of
information demanded include mainly the different types of inputs sources and prices.
The rice farming population is estimated at 12,303 farmers. At the beginning of 2013,
5,755 farmers were organized in 238 Common Initiative Groups (CIGs). This represents
46.78% of the total population of rice farmers (6,197 men and 6,096 women). These Common
Initiative Groups have formed 05 Unions of CIGs and a Federation. This organization facilitates
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advocacy and information dissemination. There is collaboration between UNVDA and the
various Farm Management committees in the distribution of developed farms, and water
management. There are also regular consultative meetings between the Rice Farmers Federation
and the UNVDA authorities especially for that which concern input distribution, and terms of
credit facilities available to farmers.
However, lack of coordination amongst different stakeholders is exhibited by the
duplication of activities carried out on the field. While the Ministry of Agriculture and Rural
Development (MINADER) is supplying free inputs to framers, UNVDA on the other hand is
providing the same inputs on credit at a subsidized cost. Field trials are conducted for new rice
varieties by IRAD, UNVDA, and MINADER. Sometimes this is done with the same farmers or
groups. These situations were revealed by the focused group. These give the impression that
there is competition among stake holders for beneficiaries of their programs and at the end of day
the effort is disintegrated.
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4.8 The structure of estimated Cost and Returns
4.8.1 Production Cost estimate for one hectare of Rice.
Table 19: Cost estimates per hectare of riceS/N Item Unit Quantity/ha Unit
costTotal/ha %Cost
contributiona Material inputs
i seed kg 50 150 7,500 1.47ii Fertilizer-NPK
201010Bags of 50kg 4 20,000 80,000
15.67iii Fertilizer-Urea. Bags of 50kg 2 19,500 39,000 7.64iv Herbicide liter 3 3,500 10,500 2.06
Sub total 26.84b Land rental ha 1 50,000 50,000 9.80c Water control ha 1 5000 5,000 0.98d labour
i Nursing of seeds. Man day 2 2,500 5,000 0.98ii Clearing Man day 12 2500 30,000 5.88iii Tilling. ha 1 30,000 30,000 5.88iv Leveling ha 1 15,000 15,000 2.94V transplanting ha 1 50,000 50,000 9.80Vi Herbicide
application/ manual weeding
ha 1 33,000 33,000
6.47Vii Fertilizer application Man days 6 2500 12500 2.45Viii Harvesting
/threshing.Man day 44 2500 110,000
21.55Subtotal for labour 55.94
e Marketing cost (Transportation to and cost of bags market point / bags)/ others
Bags of 100kg
47 600 28,200
5.53f Depreciation of
small equipment 25 4,700
0.92Total cost 510,400 100Yield. 5,020kg Cost/kg=101.6
Source: Focused group discussion/Own calculations
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Table 19 shows the different cost items involved in the production of rice on one hectare of land
and the yield obtained. It indicates that the cost of producing 1kg of paddy rice in Ndop is
estimated at 101.6 FCFA and that the yield from one hectare is 5.02 tons.
Figure 17: Cost structure for producing rice on one hectare of land.
Source: generated from Table 19
Figure 17 shows the cost distribution with respect to the production of paddy rice on one
hectare of land. The cost of labour in general occupies 55.94% out of which labour for harvesting
and threshing accounts for 21.55% since this operation is carried out manually. There is therefore
the need for an alternative to reduce the cost.
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Closely followed is the cost of material inputs which stand at 26.84% of which fertilizers
accounts for 25%. This is an indication of the importance of fertilizers in rice cultivation. This is
a major cost component in rice production. Fertilizer does not attract VAT in the present tax
dispensation, but other domestic taxes including customs duty, excess charges on non-CEMAC
imports, taxes on transportation, and taxes on dealer profit margins means that the total tax
burden worked out to between 43% to 59% of the domestic value added, depending on the
distribution channel and final place of use. By comparison, calculations for taxes and charges on
fertilizers and pesticide imported in Nigeria, Mozambique, and Zambia show that tax as a share
of domestic value added(DVA) works out to just 5%, 11%, and 18% respectively (World bank,
2008). Deducing from the Table 19, if a 50% reduction of the taxes and charges on fertilizer and
pesticide is considered, there will be a drop in the contribution of fertilizer and pesticide to the
total cost from 28.8% to 21.9 % and consequently a reduction by 6% of the cost of production.
Taxes and other charges therefore constitute 11.4% of the total cost of production.
4.8.2 Domestic added value, revenue and profit distribution along the value chain.
Value is added as the rice is produced from the farm and moves along the value chain through
the different actors. The value added is equal to the added cost. This is obtained by computing
the difference between the total revue minus the total cost and margin {total revenue – (total
cost + margin)}. This exercise is repeated until the good attained the level of the consumer. The
profit is the difference between the total revenue and the total cost before tax which is the
difference between the selling price and the total cost incurred at each stage of the value chain.
Values on Table 20 are the averages obtained from data collected from the different actors
through interviews. (see Appendix VI)
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Table 20: Added value, revenue and profit distributions
CHAIN ACTORS ORIGIN
PURCHASING PRICE
TOTAL COST
SELLING PRICE
MARGIN(PROFIT)
ADDED COST(value) REVENUE
FARMER - - 156.415 184.615 28.2 156.415 184.615MIDDLEMEN farmer 184.615 189.876 201.492 11.615 5.261 16.876
PROCESSOR
intermediary to private mill 201.492 262.542 277.99 15.44769 61.05 76.497
farmer to private mill 184.615 245.66 277.99 32.33 61.05 93.374
farmer to UNVDA 184.615 273.025 320.49 47.464 88.41 135.874
WHOLESALER
Rice from private mills 277.99 291.89 305.99 14.1 13.9 28
UNVDA processed rice 320.49 334.39 349.19 14.8 13.9 28.7
RETAILER
UNVDA processed rice 349.19 356.75 360.95 4.2 7.56 11.76
Rice from private mills 305.99 313.55 317.31 3.76 7.56 11.32
Source: Own calculations
Table 20 and Figure 18 present the added value, revenue and profit distributions amongst
the main actors in the chain. The farmer adds the highest value amongst the chain actors (156.415
fcfa). The profit made by the farmer from the sales of 1kg of white rice produced is 28.2FCFA.
This is less than what is made by the processors, 32.33 FCFA for the local millers and 47.47
FCFA for UNVDA. More value is added to rice milled by UNVDA than rice milled by private
millers. Local millers’ profit reduces if paddy rice is purchased through a middleman.. The
millers in general make the highest profit. The farmers are lured into unfair deals by the local
collectors when they pre-finance the farming season through loans. Repayment is done in kind
by the farmers using the harvested rice. Extra revenue is made by millers through the sales of
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rice brand which is not handed to the farmer. The consumer in Bamenda pays about 360.95fcfa
for one kilogram of white rice processed by UNVDA, while rice processed from small local
mills is sold at 317.31fcfa/kg.
Figure 18: Distribution of added cost (value), profit and margins (revenue) along the value chain
The farmer has the highest revenue, but this is absorbed by the high cost incurred and
consequently the farmer makes a lower profit as compared to the millers. More profit is made by
the processors where intermediaries are eliminated. The graph and the table show an unequal
distributions of cost, revenue and profit that need to be redressed.
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4.9 BENCHMARKING OF PERFORMANCE INDICATORS
4.9.1 Yield estimates.
Table 21: Comparison of estimated yields per hectare from different locations
SOURCE LOCATION Yields For 2011THIS STUDY Ndop 5.02FAO (2011) Cameroon 1.2FAO (2011) Africa 2.5FAO (2011) India 3.4FAO (2011) Thailand 2.9FAO (2011) China 6.5Mehmood Y. et al(2011) PARKISTAN 5.55Trudel B. (2012) VIETNAM(2011) 5.8
Source: focused group discussion and literature review.
Table 21 presents yields for rice obtained in Ndop, Cameroon, and averages from other
countries exporting rice to Cameroon. This is further illustrated in Figure 19. Yield wise, rice
produced in Ndop can favourably compete with rice produced in Thailand, India, and many
countries in Africa.
Figure 19: Comparison of yields per hectare for 2011
Source: generated from table 21
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Apart from China, Pakistan and Vietnam, average yield in Ndop is higher than that in major rice
producing areas (India and Thailand) as well as in other parts of Cameroon and Africa. This
increase in yield can be related to the use of improved seed material (85%), adequate use of
fertilizers, pesticides and the technical support of field extension staff. This was confirmed
during the focused group discussion.
4.9.2 Comparison of prices of white rice from different sources
Table 22: Comparison of prices of white rice from different sources
TYPE OF RICE
Average supply prices
fcfa per 50kg bag (A)
Average selling prices
fcfa per 50kg
bag(B)
Sales Margin (B-A)
Sellig price
difference with
respect to UNVDA rice per
50kg bag
Percentage difference
with respect to UNVDA rice per
50kg bag
Selling price
difference with
respect to rice
imported into
Cameroon per 50kg
bag
Percentage difference
with respect to
locally milled
rice per 50kg bag
NDOP White rice from UNVDA
16,000 17,500
1,500
0 0 -2,200 -14.379085
Ndop white rice locall millers
13,800 15,300 1,500 -2,200 -12.57 0 0
THAILAND 18,700 19,750
1,050
2,250 12.86 4,450 29.0849673
INDIAN 19,125 21,7452,620
4,245 24.26 6,445 42.124183
VIETNAM (NEIMA)
19,170 21,920 2,750 4,420 25.26 6,620 43.2679739
Source: Survey results and literature review.
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Table 22 indicates that generally imported rice is more expensive than locally produced rice.
The percentage difference in price ranges from 12% to 25.26% between imported rice and
UNVDA rice, and 29% to 43.267% between locally milled rice and imported rice. This is due to
the poor quality it presents as confirmed by all the wholesalers interviewed.
4.9.3 Comparison of Benefit/cost ratio
The Benefit/Cost ratio is computed as B/C where B is the difference between the total revenue
and the total cost before tax at each stage of the value chain and C the total cost incurred at each
stage of the value chain. This is done for the purpose of comparison. For this study the
Benefit/Cost ratios for the production of 1kg of paddy rice are compared.
Table 23: Benefit/cost ratios.
SOURCE. COUNTRY Benefit Cost ratio
Mehmood Y. et al (2011) PAKISTAN 1.044
Estimated by Author CAMEROON(NDOP) 0.181
Sita D K. and Ponnarasi T. (2009)
INDIA 1.56
Trudel B. (2012) VIETNAM 0.1
Source: Literature and focused group discussion
Table 23 and Figure 20 show computed benefit/cost ratios for Ndop rice and rice from other
countries exporting rice to Cameroon. The benefit/cost ratio for Ndop rice compared with the
results with the results from the other countries it is very low. (0.181 compared to 1.044 and 1.56
for Pakistan and India respectively).
92
Figure 20: Benefit cost/ratio benchmarking.
Source: Generated from table 26
India has the highest benefit cost/ratio followed by Pakistan. The low benefit cost ratio observed
in Ndop can be associated to the high cost of production resulting principally from the high cost
of fertilizers and labour inputs. The gain in yields is completely absorbed by the high cost of
production.
4.10 Challenges and Opportunities
4.10.1 Challenges
The challenges identified are discussed under (a) level of production and high cost of
production (b) level of post harvest handling and processing and (c) Level of marketing
a) Level of production and high cost of production.
i) Production scale per farmer is still very low. The average farm size per farmer is estimated
at 0.24 hectares hence, farmers can not benefit from economies of scale.
ii) Productivity per farmer is still low. Though improved seeds are available at a subsidized
cost of 150fcfa/kg, some farmers are still using recycled seeds. Use of improved seed
93
with proper cultural practices can increase the yield from the present level of 5.02 tons
per hectare to 6.5 tons per hectare.
iii) Average cost of production per farmer is still very high because production is
fragmented and mechanization is very low even in developed rice fields. This problem is
further compounded by the high cost of the labour and fertilizer inputs.
iv) Climate change: Since rice needs a lot of water, erratic rains and slight changes in the
rainfall pattern affects rice production. Some fields are flooded due to heavy rains during
harvest periods. This leads to heavy losses.
v) Poor water management due to broken down dykes and dams. Water may not be available
in certain areas during critical periods. Over flooding may occur.
vi) High cost of inputs: The major costly inputs for rice production are fertilizer and labour.
The increasing cost of fertilizer has forced some farmers to reduce the expected dose to
be applied. This has also affected the yields since fertilizers are note optimally used.
vii)High cost of credit: Microfinance institutions such as the Credit Unions, MC2, and the
Peoples’ Microfinance exist in the zone and their credit facilities are not adaptable due to
high interest rates that attain 24%. This is further compounded by the non adaptation of
grace periods to the income from harvest. The only alternative left are middlemen who
offer credits in return for rice to be collected during harvest period or local “Njangi
groups” that can provide loans for a period of up to one year.
viii) Limited extension services: Farmers complained of absence of extension services in
their area such that they grow rice with no technical support.
ix) Poor rice quality: The quality of milled rice is the result of a chain of factors that are all
inter-connected, moving from farm through processing to market. The planting of mixed
94
varieties in the same fields and other poor management practices cause uneven maturity,
and variable moisture content of the grain. Handling becomes difficult and grain quality is
compromised.
b) Level of post harvest handling and processing
i) The drying of paddy rice on the bare ground or dusty areas significantly compounds
the problems of cleanliness and selection.
ii) Inappropriate rice mills: Most of the small mills currently being used by local
processors are crude, resulting in poor quality rice even with good quality paddy.
Superior processing plants such as that which is used by UNVDA are out of reach for
many processors since they are expensive.
c) Level of marketing
i) Low market share / returns: The consumption of locally produced rice is
however still limited due to compromise on quality. Market share of locally
produced rice remains low due to the fact that most farmers grow multiple
varieties which are not separated during harvesting and processing, and yet
international markets demand specified rice. Apart from the production zone
of Ndop where the “Ndop rice” is readily available, it accounts for less than
2% of rice sold in the shops in Urban Centers.
ii) Low price offer: While imported white rice (Basmati 5% broken grains) is
sold at 380fcfa/kg in Bamenda, “Ndop rice” can only fetch 360fcfa/kg
(wholesale prices). Rice milled from small private mills is bought at an
average price of 316fcfa/kg.
95
iii) Unorganized marketing channel: Sales of paddy rice are done at farm-gate or
through local collectors and millers who visit homes and farms. Exports of
processed rice to countries such as Nigeria and Equatorial Guinea are mostly
through informal markets. No mechanism for standardization and pricing
exist.
4.10.2 Opportunities
The following are the identified opportunities available for exploitation.
a) Availability of support services: The availability of improved seeds from IRAD, farm
mechanization facilities offered by UNVDA and loan facilities offered by existing
microfinance institutions can positively impact on rice production and productivity if
they are exploited.
b) The availability of arable land for expansion: Out of the 15,036.86 hectares of available
land only 2970.51 hectares are under cultivation. There is still land available for
expansion.
c) Availability of irrigation infrastructure: The existent of a dam that can provide water for
irrigation all year round is an advantage to be folly exploited. Hence rice cultivation can
be carried out even twice a year.
d) Favourable agro ecology: Ndop plain provides a favorable climate, less strenuous
topography and fertile soils for the cultivation of rice.
e) Consumption deficit: The increase in population implies an increase in excess demand.
Therefore there is an existing market for rice at the local and international level.
96
CHAPTER FIVE
5. CONCLUSION AND RECOMMENDATIONS
5.1 CONCLUSION
This study has revealed that locally produced rice from Ndop can compete favorably with
rice imported if certain aspects of the value chain are redressed. Literature on value chain was
presented briefly to serve as a foundation. In addition, the research defined the distributions of
revenue, cost and profit by employing the concepts of margin and added cost. Shortcomings
identified included; low profit margin to the farmers due to high cost of inputs especially labour
and fertilizers, poor grain quality due to inappropriate production, handling and processing
techniques, and low benefit/cost ratio for locally produced rice though yields are comparatively
high. The studies also revealed that though there is a multitude of actors and stakeholders
intervening in the rice value chain, their activities remain largely uncoordinated.
5.2 RECOMMENDATION
The Ndop rice value chain needs to be organized. The state needs to increase investment in
the rice production, processing and distribution system in order to improve the volume and the
quality of rice. This will make the country to gain competitive advantage in the national and even
regional markets. In order for the local rice industry to develop in a sustainable manner, the
following issues should be addressed- improvement in quantity of rice production, reduction of
cost of production, improvement in quality of rice produced, organization of input acquisition
and marketing, the provision of adapted credit facilities, and the establishment of a publicity
strategy for rice produced locally.
97
For the improvement in quantity of rice produced; more land should be developed and more
investment should be geared towards land development. This will increase the amount of land
available for cultivation. This calls for heavy investment in infrastructure and equipment. The
use of appropriate inputs such as fertilizers and improved seeds should be encouraged.
Regarding the reduction in the cost of production with respect to fertilizers and labour costs,
government could intervention to reduce the cost of fertilizer through reduction of related taxes
and the elimination of certain transactional costs. Concerning the reduction in labour cost, the
mechanization of agricultural operations is needed. The government should put in place a tax
incentive for the acquisition of the appropriate agricultural machinery. In the short run the
equipment pool of UNVDA could also be increased so that more machines are made available
for farmers to hire at affordable costs.
For the improvement in quality of rice produced, actions should be taken to assure that
good quality seeds are used appropriately and by all producers. This can be done by separating
the various varieties during planting, harvesting and processing because the different varieties
have physiological differences. This will improve on the quality of the rice. Investment in
appropriate processing plants that can execute the essential quality assurance activities such as
sorting winnowing, hulling, grading and packaging will greatly improve on the grain quality.
Locally produced rice generally suffers from price discounts. However, local rice milled using
the modern huller at UNVDA attracts a better price than that which is processed from simple
hullers. Using modern mills will greatly reduced the price discount suffered by locally produced
rice. Millers should be trained on proper handling and milling techniques. The Rice farmers’
federation can facilitate the acquisition of modern hullers by the Rice cooperatives. The
government can also assist through subventions and/or soft loans.
98
Considering the proper organization of input acquisition and marketing, the establishment of
input and marketing contracts should be encouraged to assure acquisition of inputs downstream
and the sales of produce upstream. Collection centers should be established to control the
calibration instrument. A market information system should be established. This will boost
credibility in the building of economic partnership contracts. Knowledge sharing will be
enhanced.
Concerning the provision of credit facilities to the actors, existing microfinance
institutions should tailor their products such as to attract rice farmers. Credit to farmers should
respect farming calendar and the interest rate should be attractive. This will also entail
sensitization and education of farmers towards using formal financial institutions.
With regards to the establishment of a publicity strategy for rice produced locally, periodic
exhibitions should be organized for locally produced rice. Advertisement should be carried out
using the mass media. Public demonstrations on the preparation of locally produced rice should
be carried out. Packaging should be improved upon to make the product more attractive.
5.3 LIMITATIONS TO THE STUDY AND FUTURE RESEARCH
The Ndop rice value chain does not end in the Ndop plain or the Northwest Region. It
extends to the whole country and even beyond. It even includes importers of inputs who serve as
wholesalers. The current research however could not be conducted to cover the whole Country
due to time and financial constraints. Therefore, future research should be performed with data
collected for the whole country and the study should involve rice produced all over Cameroon.
99
The sustainable development of the local rice industry demands not only an understanding
of the value chain for the production of rice but also an assessment of the competitive advantages
of the industry since Cameroon is not the only place where rice is produced and exported. Also,
all the by-products should be considered as outputs. Such issues, therefore, could serve as
potential research areas in the future.
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ANNEXES
Annex 1 QUESTIONNAIRE FOR RICE VALUE CHAIN ANALYSIS
a) QUESTIONNAIRES FOR RICE FARMERS
Location of farmer------------------------ (village)
105
1. How many hectares are you operating? …
2. Are you culturing under
Swamp rice upland rice both
3. How long does a crop last from the beginning to the harvesting day? …………………..
4. How many crops do you operate per year?
1 per year 2 per year
5. When does it start and end?
1st crop starts on …….. and ends on ……….
2nd crop starts on …….. and ends on ……….
6. what is the technical process of rice production.Activity/ item Cost/ha fcfa. comments
total7. What is the average yield/hectare obtained------in tons?8. Where do you acquire your seeds? ………………
UNVDA other farmers Self made
9. Why do you choose the seed spplier / supply source?
Lower price higher quality Near your home Home delivery Other reasons (specify……)
10. Do you use improved seedsYes No
Type source Unit price Reason for preference
11. If No, why?----------------------------------
12. Do you use fertilizers and herbicides? Yes No
13. if yes Where do you acquire these input (fertilizer, herbicides)? ……………… UNVDA. Private shops. Others �…………specify14. Why do you choose the input supplier / supply source?
106
Lower price Higher quality Near your home Home delivery Other reasons (like ….)
Type source price Reason for preference
15. If No why----------------------------------Do you sign any input supply contracts? Yes No If yes, for which input and why? -input ---------------------Reason-------------------------- input ---------------------Reason-------------------------- input ---------------------Reason--------------------------If no, Why---------------------------------
16. To whom do you sell your paddy rice? Middleman UNVDA � Processor Local market Others (specify…..……) What % do you sell to each buyer? 17Middleman …..% Processor ……% Local market ……% Others …….% 18Do you sign legal contract with your buyers? Yes No If yes Why?--------------------------------If No Why? ---------------------------------
19. Have you ever requested for loans from bank / financial institution? Yes No If No Why? ----------------------------20. Have you been accorded such loans? �Yes No If No, why? --------------------------------------------------------------21. Do you receive trainings on cultivation techniques?Yes No 22. If yes, from whom do you learn? Extension staff UNVDA Other farmers �Other sources 23. Are you satisfy the trainings received?Yes No25. If yes why? ------------------------------------------------------------------------------------26. If No why? ---------------------------------------------------------------------------------------27 During planting and harvesting do you separate the different varieties Yes No If yes why? ----------------------------------------------------------------------------------------------If No why? ----------------------------------------------------------------------------------------------28. Do you receive any supports from middlemen/processors? Yes No If yes, what type of support?…………………………………………………………
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29. Do government agencies / NGO / APEX structure offer any aid programs to you farmers? Yes No If yes, what are they? …………………………………………Government agencies (MINADER, RESEARCH / NGO/ APEX structure/UNVDA
TYPE OF SERVICES COMMENTS
30. Do you seek for market information related to your business? Yes No If yes, what information are you most interested in? ……………….. Where can you find the information you need? Mass media Other farmers �Other sources --------specify31. Do you use any services dedicated to your RICE farming? …………………………………………………………………………………………….. 32. Do you have to comply with any regulations during your RICE farming? …………………………………………………………………………………………….. 33. What difficulties do you encounter as a rice farmer? …………………………………………………………………………………………..
b) Questionnaire for rice collectors /assemblers
Identification of respondentLOCATION ----------------------------------
CONTACT--------------------------------------
COLLECTION/SALES1 Where do you collect paddy rice? ------------------------------------------
2. Where do you sell collected paddy rice? --------------------------------------
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Place ofcollection
Place of sale/supply
distance Purchase cost/100kg bag
Transportation cost/100kg bag
Other charges
Selling price of 100kg bag
3. How do you come in contact with the farmers?Cell phoneFarmers’ leaderAgents
4. What support do you give to the farmer-customer?MaterialFinancial (loan)both
5. What conditions do you consider when buying paddy (prioritize)1, 2, 3RoadPriceQualityOthers (specify) -----------------
6. DIFFICULTIES ENCOUNTERED AND PROPOSED SOLUTIONS Difficulties encountered Proposed solution
6. Other relevant comments.
c) QUESTIONNAIRE FOR RICE VALUE CHAIN ANALYSIS
RICE MILLERS IN NDOP AND BAMENDAIdentification of respondent
Name of enterprise ---------------------------------------------------------Location--------------------------------------------------------------------------------------Contact -------------------------------------------------------------------------------
109
1. DO YOU MILL NDOP RICE? YES NO IF NO WHY (END INTERVIEW): -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------IF YES (CONTINUE). CHARACTERISTIC OF MILL / ACTIVITIES2. What is the capacity of your mill (No of tons/hour): ---------------------------
3. Operations conductedSorting Winnowing CleaningHullingGradingPackaging
4. What is the cost of the various operations carried out Unit cost –100kg bagSorting CleaningHullingGradingPackaging
5. Source / cost paddy of paddySupplied by farmerSupplied by intermediaryPurchased at farm gate ------------- indicate cost of transportation per 100kg
6. Cost of acquisition of paddy rice at the mill------------------------(bag of 100kg)
at the source--------------------(bag of 100kg)
other costs incurred( Characteristics and unit)
------------------------------------------------------------------------------
-------------------------------------------------------------------------------
--------------------------------------------------------------------------------
7. Quality of paddy
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Excellent ------------------------------------------reason ---------------------------------------------------
Good. -----------------------------------------------Reason---------------------------------------------------
Bad -------------------------------------------------reason----------------------------------------------------
Very bad -------------------------------------------reason----------------------------------------------
8. Availability of paddy rice (indicate the most appropriate)Always availablyOnly during harvest
9. Who are your customers (prioritize) (1, 2, 3,)
wholesalersretailersconsumers
10. Average selling price
during harvest period-----------------per kg
off season----------------------per kg
11. Other problems encountered/propose solution or recommendations
12. Conversion rate of milled rice to paddy
100KG PADDY == WHITE RICE ------KG PRICE /KG
RICE BRAND-----KG PRICE/KG
OTHRES (SPECIFY) -----KG PRICE /KG
111
QUESTIONNAIRE FOR RICE VALUE CHAIN ANALYSIS
d) WHOLESALERS AND RETAILERIdentification of respondent
1 Name of interprise ---------------------------------------------------------(optional)2. Location--------------------------------------------------------------------------------------3. Contact -------------------------------------------------------------------------------Wholesaler retailer both
4. Do you sell Ndop Rice? YES: NO
5.IF NO WHY:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------6.IF YES WHY------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------7. What are the other types of white rice being sold by your enterprise.---------------------------------------------------source ---------------------------unit price of sales----------50kg----------------------------------------------------source-------------------------- unit price of sales----------50kg----------------------------------------------------source-------------------------- unit price of sales----------50kg----------------------------------------------------source-------------------------- unit price of sales----------50kg
8.Where do you get the Ndop rice you sell?: UNVDA millers wholesaler s
Other intermediaries (specify) a) ----------------------b) -----------------------------
9. COST OF PURCHASE/CHARGES (per 50kg bag)TYPE OF RICE
PURCHASE COST
TRANSPORT MARKETING STORAGE OTHERS SELLING PRICE
Ndop rice
Imported white rice (specify)
112
branda)
b)
c)
d)
10. Is Ndop rice always available?(tick where appropriate)
-During harvest period only.-Always.
11. Percentage of Ndop rice sold with respect to total sales within the last year
Other problems encountered/propose solution or recommendations or general comments on Ndop rice.
Thank you.
NAME OF RESPONDENT/ SIGNATURE WHERE POSSIBLE
e) QUESTIONNAIRE FOR RICE VALUE CHAIN ANALYSISMAJOR RICE CONSUMERS (BAMENDA)CHARACTERISTIC OF RESPONDENT
HOTEL / RESTAURANTS
HOUSEHOLD
1. Do you consume NDOP rice? Yes No If No, why?
………………………………………………………………………….
If yes continue2. Source of Ndop rice UNVDA millers wholesalers retailer OTHERS (specify) -------------
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3. Purchase priceUnit price per 50kgsource miller retailer WholesalerImported white riceNdop rice
4. Availability of Ndop rice
-During harvest period only.-Always.
5. Comment on quality. Satisfy Not satisfy Indifferent
6. Reasons: taste cookability cleanliness grain size
Others (specify):-------------------------------------------------------------
OTHER COMMENTS:
ANNEX II Ndop Rice cultivation Zones
N°
SECTOR Cultivated surface areas in hectares.
Developed Traditional Total2010 2011 2012 2010 2011 2012 2010 2011 2012
1 MONOUN
231 231 239,91
0 0 36,76 231 231 276.67
2 BANGOLAN
342,31 361,56 358,18
101,05
100 82,95 443,36 461.56 441.13
3 BABUNGO
0 10,78 139,8 202,19
208,96 239,16 202,19 219.74 378.96
4 LOWER BAMUNKA
547,11 547,11 547,11
524,06
446,7 486,64 1.071,17
993,81 1033.75
5 UPPER BAMUNKA
183,5 201,5 214 502,9 544 626 686,4 745.5 840
TOTAL 1,303.9 1,351.9 1,499 1,330. 1,299.6 1,471.5 2,634.1 2,651.6 2,970.5
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2 5 2 6 1 2 1 1
Annex III Evolution of Rice yields from various Countries.
AUTHOR AREA / COUNTRY
2001
2002
2003
2004
2005
2006
2007 2008
2009
2010
2011
THIS STUDY Ndop 3.5 3.5 2.5 4.0 4.0 3.6 2.5 4.0 3.5 4.0 4.9FAO (2011) Cameroon 3 3 1.1 1.1 1.2 1.3 1.3 1 1 1.2 1.2 FAO (2011) Africa 2.3 2.2 2.2 2.3 2.3 2.3 2.4 2.4 2.6 2.4 2.5 FAO (2011) India 2.8 3.1 2.6 3.1 3 3.1 3.2 3.3 3.3 3.2 3.4 FAO (2011) Thailand 2.6 2.8 2.9 2.9 2.8 3 2.9 3 3 2.9 2.9 FAO (2011) China 6.2 6.1 6.1 6 6.3 6.2 6.2 6.4 6.5 6.5 6.5
PARKISTAN 5.55VIETNAM(2011)
5.8
ANNEX IV Evolution of rice farmers in Ndop.
N°
SECTOR Number of rice farmers CIGMale Female TOTAL Number Members
2010
2011
2012
2010
2011
2012
2010
2011
2012
2010
2011
2012
2010
2011
2012
1 MONOUN
446 446
468
395 395
550
841 841 1018
36 36 36 505 505 749
2 BANGOLAN
549 660
527
713 659
651
1.262
1319
1188
38 40 38 754 787 809
3 BABUNGO
460 498
929
377 400
595
837 898 1524
12 15 22 346 392 496
4 LOWER BAMUNKA
1.445
1440
1939
1,533
1627
1813
2.978
3067
3452
69 73 64 1,658
1,815
1,369
5 UPPER BAMUNKA
2.510
2913
2634
2.386
2589
2487
4.896
5502
5121
95 97 79 3.240
2923
2,332
TOTAL 5.440
5957
6196
5,404
5670
6096
10,814
11627
1,2303
250
261
238
6,503
6,422
5,755
115
ANNEX V Rice seed production in Ndop
SERVICE FOR CONTROL OF AGRICULTURAL INPUTS AND PRODUCTSBUREAU FOR SEED CERTIFICATION
Certified rice seeds produced in 2012
RICE1 MAFAC CIG Ngoketnjia Babungo Oryza s. TOX'S-4532 Certified 5 252 MAFAC CIG Ngoketnjia Babungo Oryza s. TOX'S-4538 Certified 5 303 NGWANA GENESIS Ngoketnjia Bamuka Oryza s. TOX'S-3145 Certified 1 104 NDUMCHUNG BENEDICTA Ngoketnjia Bamuka Oryza s. TOX'S-3145 Certified 1 55 Ngoketunjia milla Union CIG Ngoketnjia Bamuka Oryza s. TOX'S-3145 Certified 2 2.56 Ngoketunjia milla Union CIG Ngoketnjia Bamuka Oryza s. NERICA-3 Certified 2 27 BEFANG GREEN RICE Menchum BEFANG Oryza s. TOX Certified 1 28 FON CHO ERIC Mezam Obang Oryza s. TOX-3145 Certified 2 59 CHE ANDREW Mezam Obang Oryza s. TOX-3145 Certified 1.5 2.5
10 Che Festus Ambe Mezam Obang Oryza s. NYLON Certified 0.5 111 Mucangeng Rice C.I.G Agulli Menchum Agulli Mile 37 Oryza s. TOX Commercial 1 212 New Rice For Africa Union C.IG Ngoketnjia Bamuka Oryza s. Nerica rice 4256 Certified 1 513 Ngoketunjia-Ndop-Bambalang Ngoketnjia Bambalang Oryza s. TOX-3145 Certified 1 8
116
ANNEX VI Determination of cost, and added value and profit of actors.
Analysis of cost items for rice collectorss/n Activity 1 2 3 4 5 6 7 8 9 10 11 12 13 mean
1 purchase18,50
019,20
018,00
018,30
018,60
018,20
018,00
018,30
018,40
018,50
018,60
019,00
0 18,400 18,4622 transportation 150 100 100 150 150 150 125 100 100 100 100 150 100 121.153 bag 250 200 200 150 150 150 150 200 250 200 200 150 150 184.615
4storage/ overhead 250 200 220 250 180 225 240 250 250 250 200 220 250 229.615
total
19,150
19,700
18,520
18,850
19,080
18,725
18,515
18,850
19,000
19,050
19,100
19,520 18,900
18996.92
Total cost to produce 100kg of white rice 18996.
9Total cost to produce 100kg of white rice
189.96
s/n Activity 1 2 3 4 5 6 7 8 9 10 11 12 132 transportation 150 100 100 150 150 150 125 100 100 100 100 150 1003 bag 250 200 200 150 150 150 150 200 250 200 200 150 150
4storage/ overhead 250 200 220 250 180 225 240 250 250 250 200 220 250
total 650 500 520 550 480 525 515 550 600 550 500 520 320Value added to produce 100kg of white rice. 521.53 52.1 Value added to produce 100kg of white rice.
117
b) Cost structure for millers collecting directly from farmers.Activities meanpurchase cost 18500 18000 17600 18600 19500 18200 18500 18800 18462.5transportation 1200 1250 1200 1500 1400 1200 1500 2000 1406.25drying 500 450 500 500 650 500 500 550 518.75hulling 1587.302 1587.302 1587.302 1587.302 1587.302 1587.3 1587.302 1587.3016 1587.302packaging 1200 800 900 800 900 600 800 1100 887.5
storage/overhead 1600 1800 1800 1750 1700 1700 1800 1925 1759.375total for 100kg 24587.302 23887.3 23587.3 24737.3 25737.3 23787.3 24687.302 25962.301 24621.68Average total to process cost of 100kg 24621.676Average total cost to process 1kg of white rice 246.216
activity 1 2 3 4 5 6 7 8transportation 1200 1250 1200 1500 1400 1200 1500 2000drying 500 450 500 500 650 500 500 550hulling 1587.302 1587.302 1587.302 1587.302 1587.302 1587.3 1587.302 1587.30packaging 1200 800 900 800 900 600 800 1100
storage/overhead 1600 1800 1745 1800 1700 1700 1700 1600total for 100kg 6087.302 5887.302 5932.302 6187.302 6237.302 5587.3 6087.302 6837.3016
Added cost on 100kg 6105.426Added value for
1kg of white rice 61.0542
Cost structure for middlemen (millers) collecting paddy rice from intermediary
118
purchase cost 19500 21000 21000 19500 19500 21000 19500 20000transportation 1200 1250 1200 1500 1400 1200 1500 2000drying 500 450 500 500 650 500 500 550hulling 1587.302 1587.302 1587.302 1587.302 1587.302 1587.3 1587.302 1587.3016packagging 1200 800 900 800 900 600 800 1100
storage/overhead 1600 1800 1800 1750 1700 1700 1800 1925
total for 100kg 25587.302 26887.3 26987.3 25637.3 25737.3 26587.3 25687.302 27162.30cost of 100kg 26284.176cost of 1kg 262.541
added value
activity 1 2 3 4 5 6 7 8
transportation 1200 1250 1200 1500 1400 1200 1500 2000drying 500 450 500 500 650 500 500 550hulling 1587.302 1587.302 1587.302 1587.302 1587.302 1587.3 1587.302 1587.30
packagging 1200 800 900 800 900 600 800 1100storage/overhead 1600 1800 1745 1800 1700 1700 1700 1600
6087.302 5887.302 5932.302 6187.302 6237.302 5587.3 6087.302 6837.30Added cost on 100kg 6105.426fcfaAdded value for 1kg
of white rice 61.05426 fcfa
wholesalerwholesaler for UNVDA Riefor UNVDA RiePurchase 320.49overhead 13.9TOTAL 334.39
119
local milled ricepurchase 777.77overhead 13.9TOTAL 791.67
Retailer
For UNVDA RicePurchase 349.19overhead 7.56TOTAL 356.75local milled ricePurchase 305.99overhead 7.56TOTAL 313.55
120
Annex VII Map of the North West Region.
ANNEX VIII Relevant information revealed by farmers
ITEM DESCRIPTION NUMBER PERCENTAGEUse of improved seed
48 out of 50 responded 36 75%
Source of improved seeds
48 out of 50 responded Other farmers =26Self=3UNVDA =7
72%8%19%
Use of fertilizer 48 out of 50 responded 48 farmer 100%Source of fertilizer 48 out of 50 responded UNVDA =32 farmers 66%
121
Private shops =12 34%Reasons for purchase of fertilizer from UNVDA
32 out 48 who purchased Low prices =23Home delivery=2High quality= 2Low price and home delivery=3Low price and higher quality=2
71%6%6%9%6%
Existence of input contracts
46 out of 50 farmers Yes = 27 ( 21 with UNVDA)No=19
58%42%
Marketing of paddy rice by farmers.
48 out of 50 farmers UNVDA=13Middlemen= 23Processors= 7UNVDA and processors=4UNVDA, and middlemen=4UNVDA, processors, middlemen=7
27%47%14%8%8%14%
Existence of marketing contracts.
48 out of 50 farmers Yes = 17 – to pay back loans No.= 31 - fear of price fluctuation
35%
65%
Benefit from Credit facility- loans
44 out 50 farmers Yes = 42No= 2
95%5%
Support services received
Demand for loans 44 out of 50 Yes =31No. =13
70%30%
i)Source of loan.42 out of 44 farmers Njangi = 11
Credit Union= 9MC2= 3Njangi &credit Union= 11Njangi &MC2= 5Others (commercial banks)=3
26%21%7%26%11%7%
ii)Capacity building trainings
43 out of 44 farmers UNVDA = 23MINADER staff = 13NGO =2MINADER&UNVDA =3UNVDA & NGO =2
53%30%4%6%4%
122
III) Input and equipment
18 out 43 farmers MINADER= 15NGO =3
83%17%
iv)Existence of special rules and regulation
35 out of 44 Yes=11No=24
31%69%
Information: type and source.
44 Type: Prices of input, new varietiesSource : mass media, other farmers
Production Constraints noted(prioritized)
High cost of inputsWater controlAccess to creditInsufficient land
Marketing constraints
Marketing not organizedAvailability of market information
