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Business intelligence services for price risk management in the maize, rice, millet and sorghum sectors in West Africa

Project

Digitalisation

Cereals in West Africa are part of the basic diet of the population and are an important source of income for many small producers. The cereal trade accounts for a significant share of intra-regional trade and has significant potential for improving food security and livelihoods. However, many obstacles deter the development of this trade, including the lack of reliable information and analysis services for the private sector on market conditions and profitability.

Aim 

Private operators in the grain sector often have only fragmented and poorly structured information on which to base their commercial strategy. This situation can make private operators risk-averse, or, on the contrary, lead to heavy financial losses caused by the failure to anticipate price fluctuations. 

To counter this lack of information, the Technical Centre for Agricultural and Rural Co-operation (CTA) together with the West African Grain Network (WAGN) and the French non-governmental organisation RONGEAD, launched a project in February 2016 to set up a business intelligence platform aimed at private-sector cereal operators in eight countries in West Africa. The creation of this platform should improve access for 10,000 private-sector operators in the grain value chain to an independent source of information and expertise that is adapted to their needs. The aim is to help them better manage risks and encourage them to invest safely in the production, storage and marketing of cereals. This project contributes to Sustainable Development Goal 2 – ‘zero hunger’ – which aims to eliminate hunger and famine, and to ensure food security, improve nutrition and promote sustainable agriculture.

Approach 

During the first phase of the project (18 months), the development and implementation of the information system was entrusted to RONGEAD, in support of the WAGN, in the framework of the Support Programme for Food and Nutrition Security in West Africa (PASANAO) – a programme funded by the Economic Community of West African States (ECOWAS) via a grant from the French Development Agency. In addition to market information, the system also collected information on the policies implemented, on regulations and existing technologies. The CTA supported the implementation of the system, the regional coordination within the WAGN and the training of market analysts in the eight countries.

Activities 

The project was broken down into three main activities: 

  • Design and development of a real-time SMS information system on grain markets (inspired by the N'kalô service – an information and advice service developed by RONGEAD). 
  • Training and knowledge transfer with the WAGN. 
  • Management of a network of private storage organisations monitored and advised by the WAGN service.

Impact 

To date, the project has achieved the following results: 

  • A significant improvement in the commercial strategy of grain operators: the 25,513 grain operators using the service via the WAGN network have seen their turnover increase by a total of €280,000. 
  • Creation of a ‘grain bulletin’ distributed by WAGN to 2,150 subscribers. 
  • Implementation of an inventory tracking system at the level of the eight countries that could potentially be replicated across West Africa. 

In the long run, the expected effects of the project are: 

  • Improved sub-regional food security in West Africa through better functioning cereal markets. 
  • The creation of market conditions that facilitate investment in cereal production, storage and distribution.