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Growing demand from rapidly expanding urban populations offers valuable opportunities in the West African grains sector. Modernising the grain market will be key to improving revenues for smallholder producers, helping to boost supplies of key local food products as a result.
Production of maize, millet, rice and sorghum in West Africa has seen a steady rise in recent years, from 16 million tonnes in 1980 to 63 million tonnes in 2015. But despite these gains, there is strong scope for further increases, and for setting in place efficient value chains and market instruments to take advantage of local grains' special role in ensuring food security and better incomes for small-scale producers.
Currently, some 44 percent of the West African population suffers from food insecurity, a conference on How to structure the grain trade in West Africa: which market instruments and public policy measures? has heard. The event, held in Ouagadougou, Burkina Faso from November 29 to December 1, is being organised by CTA, together with the West African regional farmers' organisation (ROPPA), the West African Grains Network (WAGN-ROAC) and the African Rural and Agricultural Credit Association (AFRACA).
The region's rapidly growing population is expected to swell to 400 million by 2050, almost half of it in towns and cities. The trend towards urbanisation has given rise to changing dietary preferences for grain products that are better developed and virtually ready for consumption – presenting new openings for added value. There is also growing demand for grains in livestock fodder, to supply meat products for increasingly affluent urban populations.
But although regional trade in grains has increased over the past three decades, it remains way below its full potential. Unable to sell their output at competitive prices, smallholder farmers are failing to earn decent incomes and West African governments are losing out from potential export revenues. Cross-border trade, mainly for millet, sorghum and maize, involves less then 1.5 million tonnes per year – a fraction of its potential.
Paradoxicially, the inter-regional grain trade is smaller than the amount of wheat, wheat flour and especially rice imported into West Africa. Locally produced rice is failing to keep pace with growing demand, especially in urban areas, and West Africa has to import between 30 and 40 percent of its rice needs.
"Better than any other crop, grains constitute the basic offer for small-scale farmers and other producers, to guarantee populations their fundamental and legitimate right to food," said Michael Hailu, Director of CTA, at the opening of the conference. "In West Africa, producers lose on average approximately 3,000 billion CFA (about € 4,6 million) each year to grain purchases from abroad, and this loss is growing with urbanisation and demand for grains in the countries of the region."
ROPPA President Djibo Bagna said that golden opportunities offered by cereals to improve food security and raise farmers' incomes were currently being missed. "Some 20 percent of our consumption of grains in the region is imported," he told the conference.
Poor transport networks are major constraints affecting the sector. In some cases, transaction costs are so high that it is less expensive for West African industrial buyers to import grains via the international market, than from neighbouring countries. Other challenges include lack of harmonisation of grades and standards and the absence of strong regional trade support institutions, such as market information systems, warehouse receipt systems and commodity exchanges.
Among objectives at this week's conference, which has brought together representatives from producer organisations, processors, traders, policy-makers, development organisations and financiers, is the laying of foundations for a regional grain exchange. The aim is to provide a system that can help to make a better match between supply and demand, increasing inter-regional trade as a result – with benefits for all players in the value chain, including local consumers.