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Trading up in the rice sector in Nigeria

Traditional parboiling vats are large and cooking quality is uneven (PrOpCom)
Traditional parboiling vats are large and cooking quality is uneven
PrOpCom

Nigeria, the largest producer of rice in West Africa, with a population of 140 million, is also the biggest importer of rice in the world. Local production is unable to meet the quality and quantity demanded by urban consumers, who prefer better quality and cheaper rice from Thailand and Vietnam. However, with the backing of a local bank and the support of a marketing development project, women rice parboilers in Kano State have become traders of rice and, with the introduction of new technology, improved the quality of the rice they sell.

Rice is traditionally parboiled - partially boiled in the husk - which makes processing easier and enhances the nutritional quality. In Kano, the majority of parboilers are women who parboil rice in vats on a contract basis. However, traditional vats are large and cooking quality varies as rice may burn at the bottom and remain undercooked on top.

Despite being an important part of the rice marketing chain, the women have little control over the service they provide. Traditionally, paddy rice is brought to the women to cook on a fee basis and the parboiled rice is then collected for final processing. Unable to add value to their product, and excluded from getting credit to buy better parboilers, quality has remained poor and the women reliant on the men who supply the paddy.

Cooking up the right approach

Loans made to women's groups have enabled them to buy improved parboilers (PrOpCom)
Loans made to women's groups have enabled them to buy improved parboilers
PrOpCom

To address this situation, a market-driven development programme has been funded by the UK Department for International Development (DFID). Known as PrOpCom, it has been working to help improve the local rice sector in Kano. With quality acknowledged as a key constraint, an improved parboiler with chimneys to distribute heat more effectively was identified. But at US$160, the new equipment was beyond the reach of most women.

To help secure finance, PrOpCom supported the women to organise into formal groups (clusters) and register with the State Ministry of Commerce and Co-operatives. Each cluster was then assisted to open a bank account with the Nigerian Agricultural Cooperatives & Rural Development Bank (NACRDB). Presented as a group, the bank was able to consider individual loan applications to determine the most viable.

Since November 2008, loans have been made to over 500 individuals across six rice clusters in the Kano region for a period of 18 months. Varying from 50,000 - 100,000 Naira (US$335-670), loans are sufficient to purchase an improved parboiler and accessories, while the remainder is used as working capital for wood and water, and for the women to buy their own paddy.

A recipe for success

"This was a totally new development," emphasises Paul Kalu of PrOpCom. "These women have never before had access to finance or been paddy owners." With cash from the loan, the women are able to stockpile paddy when it is cheap and parboil it when extra cash is required. This has transformed their business; from being contractors supplying a service, the women have now become successful rice traders," continues Kalu.

An incentive to repay the loans more quickly was set by the First Lady of Kano State, who launched an award for the 'best performing group'. In September 2009, the first groups to receive loans were assessed on their rate of repayment and the awards were made a month later. Winner in the Kura cluster, Hijia Ramatu said, "I am very happy. I can now contribute to the school fees for my children, take care of medical bills and other household needs."

With cash from the loans, the women have now become successful rice traders, able to buy their own paddy and sell it when required (PrOpCom)
With cash from the loans, the women have now become successful rice traders, able to buy their own paddy and sell it when required
PrOpCom

Hajia Dije, a winner from another cluster, is encouraging others to join them in their success. "The training provided by PrOpCom in good record keeping, planning and savings enabled us to complete loan repayments ahead of the deadline," she says. "In the new application, we would like to double the amount collected in 2008 so that we can increase our volume of business."

Sharing the benefits

Also present at the awards ceremony, the Zonal Manager of NACRDB, Alhaji Turkur, acknowledged that the project had worked well and that NACRDB had been impressed with the majority of repayments made. The bank is now looking to increase the amount of loans available to women's groups.

As parboiling is a seasonal activity, the women are also using the loans to branch out and trade in other food and household products. With a doubling or tripling in their incomes, not only are they in now control of their finances and have better access to markets, but the women have also gained greater respect from their husbands as they can contribute to paying bills and making household decisions.

"The success of this project should not be unique," says Kalu. "It's a question of providing the appropriate infrastructure, supporting the right enabling environment and then leaving the market to do the rest."

Date published: January 2010

 

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