Quality determinates of rice price in open bag markets in Sub-Saharan Africa

Bailey Peterson-Wilhelm,Francis Tsiboe,Lawton Nalley,Aaron Shew,Alvaro Durand-Morat,Willy Mulimbi

doi:10.1108/jadee-02-2021-0038

Abstract

PurposeWeaknesses in the grades and standards system in low-income countries across Sub-Saharan Africa undermine the transparency of agricultural markets. In the Democratic Republic of the Congo (DRC), Ghana and Mozambique rice is predominately sold in open bags and if rice price does not reflect its quality, then inefficiencies may lead to consumer welfare losses. Importantly, it is possible that impoverished communities are priced out of the market due to inflated and inefficient prices. The objective of this study is to examine determinates of rice price by estimating the impact of selected rice quality attributes on rice prices in Democratic Republic of the Congo, Ghana and Mozambique.Design/methodology/approachWe collected 363 rice samples from open air markets in Bukavu (DRC), Nampula (Mozambique) and across Ghana in 2019. Each rice sample was analyzed in a food science lab for the quality attributes: percentage of chalk and brokens, chalk impact, length and length-to-width ratio. We used multiple regression analysis to estimate if and to what extent quality attributes were the drivers of price.FindingsFindings suggest that there are irregularities in the Ghanaian market for broken rice and that regardless of quality, imported rice is priced higher than domestic rice. In the DRC and Mozambique, our results indicate price is driven by length and length-to-width ratio in the former and length-to-width ratio in the latter.Research limitations/implicationsRice samples were purchased from market vendors and thus consumer preferences for attributes were not revealed.Originality/valueThese results provide valuable insight to policymakers regarding the need for proper labeling and regulation of open bag rice sales in an effort to increase consumer welfare and improve food security.

Highlights

In Sub-Saharan Africa, rice is increasingly becoming an important food crop (Kihoro et al, 2013; Muthayya et al, 2014)
Our study considers the functionality of the open bag rice markets of the Democratic Republic of the Congo (DRC), Ghana and Mozambique
This study addresses several important questions related to rice markets in the DRC, Ghana and Mozambique

Summary

Introduction

In Sub-Saharan Africa, rice is increasingly becoming an important food crop (Kihoro et al, 2013; Muthayya et al, 2014). A functioning market matches the preferences of consumers with the quality and price of products; quality attributes consumers’ desire, such as lower levels of brokenness. In Ghana a survey of market shoppers found that low-, middleand high-income consumers spent on average the same monthly budget on starches (characterized by rice, cassava and maize), yet that budget represented a much larger portion of low-income households monthly income (Amfo et al, 2019) This has obvious food insecurity implications as the urban rich often drive rice markets in many low-income countries (Demont et al, 2013). There is little in the way of previous rice attribute studies in Mozambique and DRC and while literature does exist for the Ghanaian market it does not address the drivers of rice price (see Appendix for country details). This study can benefit rice exporters, rice policy makers, food security advocates, rice scientists and rice consumers by exploring what attributes drive rice price in each respective country

Hedonic price model

Results

Discussion