Effects of Industrial Paddy Processing on Local Rice Competitiveness in Glazoué District, Benin Republic

Abstract

Aims: This research aimed to assess the extent to which public investment in industrial paddy processing increases local rice competitiveness in Benin Republic, and to discuss policy implications of the findings. Study Design: The study was conducted in the Glazoué district using the approach of comparing the outcome of a unique reference case (an industrial facility) with the average outcome of several cases of indigenous private mills. Methodology: Based on interviews with the state factory manager, 25 rice processing-and-trade women and 30 consumers, competitiveness of three types of rice were compared: indigenous private mill-processed parboiled rice; state factory-processed rice, and imported rice. Competitive gains of the factory-processed rice over the indigenous one and vis-à-vis imported rice were assessed using quality index, market-gate cost price, and quality index/cost price ratio. Results: Imported rice is more competitive than local rice. Nonetheless, the factory-processed rice is more competitive than the indigenous one. The factory reduces market-gate cost price of local rice by 19.1% and brings down its overall competiveness gap vis-à-vis imported rice from 49.72% to 13.13%, i.e. a more than 4-fold increase in competitiveness. Conclusion: Therefore, more public investment in such factories should be promoted, provided adequate market linkages are established.