MR 157 - GFSR Liberia Rice Study

ATTACHMENT II
TO THE
GLOBAL FOOD SECURITY RESPONSE

WEST AFRICA RICE VALUE CHAIN
ANALYSIS
LIBERIA RICE STUDY
microREPORT #157
AUGUST 2009
AUGUST 2009
This publication was produced for review by the United States Agency for International
This publication
Development. was produced
It was preparedfor
byreview
DAI. by the United States Agency for International Development. It was prepared
by Chris Reynolds of DAI and Mike Field of ACDI/VOCA with funding from the Accelerated Microenterprise
Advancement Project. Additional support was provided by consultants Dr. Sizi Subah and Macon Fiske Tubman.
LIBERIA RICE STUDY
microREPORT #157
DISCLAIMER
The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for
International Development or the United States Government.
CONTENTS
EXECUTIVE SUMMARY................................................................................................. 1
I. INTRODUCTION TO THE RICE INDUSTRY IN LIBERIA .......................... 2
II. BUSINESS ENABLING ENVIRONMENT .......................................................... 4
III. END MARKETS ....................................................................................................... 8
IV. CHAIN ANALYSIS............................................................................................... 11
V. OPPORTUNITIES AND INCENTIVES FOR UPGRADING ....................... 19
VI. STRATEGY ............................................................................................................ 24
VII. RECOMMENDATIONS FOR USAID .............................................................. 26
VIII. TOPICS FOR FURTHER INVESTIGATION ................................................... 28
BIBLIOGRAPHY ............................................................................................................ 29
ANNEX A....................................................................................................................... 30
ANNEX B ....................................................................................................................... 31
GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY i

TABLES AND FIGURES
TABLES
Table 1: Rice Production and Consumption in Liberia, 2001-2008 ......................................................................................2
Table 2: Rice Consumption in Liberia, 2007...............................................................................................................................9
Table 3: Rice Prices; July 2009 (in US dollars)............................................................................................................................9
Table 4: Liberia Rice Imports by Product, 2001-2007........................................................................................................... 10
Table 5: Prevalence of Reported Major Causes of Post-Harvest Losses in Rice Production by Region .................. 14
Table 6: Agricultural Labor Costs in Liberia, 2009 ................................................................................................................ 31
Table 7: Agricultural Input Costs in Liberia, 2009 ................................................................................................................. 32
Table 8: Profit/Loss Analysis based on$3/day Labor Assumptions, 2009 ......................................................................... 33
Table 9: Profit/Loss Analysis based on$2/day Labor Assumptions, 2009 ......................................................................... 34
FIGURES
Figure 1: Liberia Rice Value Chain Map .................................................................................................................................... 11
Figure 2: Map of Distribution Channels for Imported Rice, 2007 ...................................................................................... 12
GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY ii

ACRONYMS
ADA African Development Aid
BEE Business enabling environment
CAADP Comprehensive Africa Agriculture Development Programme
GAP Good agricultural practices
GFSR Global Food Security Response
GoL Government of Liberia
ICT Information and communications technology
LNRDS Liberia National Rice Development Strategy
MT Metric tons
SME Small and medium enterprises
SMS Short message service
USAID United States Agency for International Development
WFP World Food Programme
GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY iii

EXECUTIVE SUMMARY
Rice is the primary staple food of Liberians, representing over 33 percent of their food consumption and accounting
for approximately 50 percent of adult caloric intake. While 71 percent of the estimated 404,000 farm families produce
rice, the country still relies heavily on imports. Approximately half of Liberia’s population lives in the greater
Monrovia area, where the rice that is consumed is predominately imported rather than produced locally. Per capita,
Liberia has the highest rice consumption rate in Africa.
The availability and price of rice is a very sensitive political consideration. The present government of Liberia (GoL)
policy is to increase domestic rice production while loosening import license restrictions, opening what had been a
tightly controlled license permit process for the import of rice. The physical infrastructure in Liberia is exceptionally
weak, with the poor condition or nonexistence of roads frequently cited as a constraint to the flow of rice and other
commodities. There are not enough mills or adequate warehouses in the country, and those that do exist are either no
longer in operation or operate vastly under capacity. The most common method of milling in rural areas is either by
manual pounding or with small, portable milling machines donated by NGOs.
Imported round grain rice from China, known as “butter rice,” comprises approximately 85 percent of rice consumed.
While butter rice has the largest share in the market, the local preference is for the more expensive parboiled rice from
the United States and China. Domestically produced rice is known as “country rice” and is more important in rural
households as a staple food, but can be found in markets surrounding Monrovia. According to the Ministry of
Commerce, demand for rice in Liberia is 210,000 MT rice per year, while the Ministry of Agriculture quotes a much
higher volume of demand at 400,000 MT per year.
The rice value chain is simple, but inefficient. The GoL and donor community are the principal actors in the enabling
environment, with the private sector exerting minimal influence and the informal sector more active in local
community markets. The key drivers are smallholder perceptions of rice as a safety net crop and the government
reinforcing this notion by sending signals such as the announcement of investments in rice processing and efforts to
keep prices low.
The end market for rice in Liberia can be defined by three channels. The first is the high-end urban channel seeking
high-grade international rice or imported specialty rice. The second market segment serves the low- and mid-range
urban population, and could present a medium-term goal for Liberian rice producers. The third market segment is
rural market demand. Rice volumes supplied by rural producers are currently insufficient to satisfy this demand.
One of the major challenges the government faces is fostering private investment in the agricultural sector, including
the rice industry and support markets. Poor relationships in the value chain have resulted in a high percentage of
subsistence-based production and limited upgrading. There are numerous operational challenges, but the most
immediate concern is the high cost of production due to weaknesses throughout the chain. Specifically, efficiency
gains are needed in the areas of the inputs and seed industries, production, transportation and aggregation, post-
harvest handling, finance and ICT.
For the Liberian rice industry to upgrade and begin to compete effectively with imported rice, there will have to be a
transition to commercially based relationships from input supply to the retailing and branding of local production.
The near-term vision for rice in Liberia is a system where smallholders consistently produce enough rice to fulfill
household needs and commercial production is substantially increased by a range of firms and farm sizes. Private
investment will build post-harvest milling, storage and processing capacity. The inputs industry will grow and develop
distribution networks directly into rural communities, and support markets will emerge in support of key growth
segments.
GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 1

I. INTRODUCTION TO THE RICE
INDUSTRY IN LIBERIA
Rice is the primary staple food of Liberians, representing over 33 percent of their food consumption and accounting for
approximately 50 percent of adult caloric intake. It is produced by 71 percent of the estimated 404,000 farm families in
the country, but the country still relies heavily on imports. Per capita, Liberia has the highest rice consumption rate in
Africa. Moreover, rice is largely a price-inelastic commodity in the household, reinforcing the colloquial expression that
“one has not eaten that day if one has not eaten rice.” Approximately half of Liberia’s population lives in the greater
Monrovia area, where the rice that is consumed is predominately imported rather than produced locally. Given the
importance of rice as a staple food in the Liberian diet, the price of rice has a direct and significant impact on poverty. A
2008 estimate by the World Bank identified that a 20 percent drop in the price paid by consumers for rice would reduce
the poverty rate1 by 3.4 percent.
The 2007/2008 domestic rice harvest2 was estimated at 170,000 MT of milled rice, while the yearly consumption is
estimated at 210,000 MT—and consumption has been steadily increasing since 2004. The current message from the
Ministry of Agriculture has called for people to “return to the fields and produce rice” and to recognize “agriculture as
a business.” In a coordinated effort, the Ministry of Agriculture, the World Food Programme (WFP), the Food and
Agriculture Organization and the United Nations Mission in Liberia launched the “Back to the Soil” campaign on
June 27, 2009. Cellcom Communications, a private-sector company, officially sponsored the initiative. The campaign
is intended to motivate Liberians to return to agriculture, recognize the sector as a viable business, increase domestic
food production (most notably rice) and ultimately promote food security. While demand for rice has increased with
an increase in population, average yields in production have decreased from a high of 1.28 MT per hectare in 2000 to
0.9 MT per hectare in 2007/08 (see Table 1 below). Despite the national initiative to increase domestic production
while simultaneously relaxing import restrictions, significant constraints persist, such as lack of access to improved
seed varieties, fertilizers and pesticides, as well as insufficient incentives to invest in increased rice production.
1990 2000 2002 2004 2005-06 2006-07 2007-08

Area (ha) 175,000 143,000 120,000 120,000 110,000 152,000 190,000
Production (MT) 180,000 183,000 110,000 110,000 100,000 144,000 170,000
Average Yield (MT/Ha) 1.03 1.28 0.92 0.92 0.87 0.90 0.9
Consumption (MT) 300,000 310,000 320,000 332,000
Food Assistance (MT) 100,000 74,000 22,000 20,000
Import (MT) 70,000 100,000 100,000 120,000 160,000 154,000 140,000
Value US$ million 25 37 20 22 140 170 200*
Source: Ministry of Agriculture of Liberia. “Liberia National Rice Development Strategy.” Liberia: Ministry of Agriculture,
February 2009 (based on 2001 and 2008 crop surveys)
1The headcount index of poverty is the share of the population with a level of consumption per equivalent adult below the poverty line. The
poverty gap takes into account the distance separating the poor from the poverty line (while giving a zero distance to the non-poor). Source:
Tsimpo, “Rice Prices and Poverty in Liberia.”
2Domestic production statistics for rice in Liberia are inconsistent and often conflicting. For the purpose of this study, rice production and
consumption statistics are being sourced from the “Liberia National Rice Development Strategy,” February 2009, as the most recent and
approved report by the Government of Liberia.

Increasing the productivity of smallholder rice farmers will require either a shift to lowland rice production or an
increase in investment in upland production, which is currently the predominant form. Easier land preparation makes
upland rice less labor intensive, but it is also substantially less productive and is therefore often intercropped with
other crops. The majority of smallholders participating in focus groups indicated that they view rice production as a
necessity for household consumption with only limited potential as a commercial crop. Smallholders prefer to invest
their labor and skills in the production of cash crops such as cocoa, palm oil and rubber, which were cited as having a
higher cash value than rice. Government policy to maintain low rice prices for urban consumers has further affected
the perception of rice as low in commercial viability.
Liberia’s dual system of land tenure also affects agricultural productivity. The Government of Liberia (GoL) owns and
administers public land, and rural indigenous communities are permitted to maintain lineage-based communal tenure.
In the 2006 Comprehensive Food Security and Nutrition Survey, approximately 66 percent of agricultural household
respondents indicated that they had access to agricultural land, though farm sizes were typically smaller than before
the war. On average, households reported current land size of 3.3 acres (1.3 ha) per household. The highest
percentage of access to land is in River Gee (90 percent), Grand Gedeh (88 percent) and Lofa (88 percent), while the
lowest rates of access to land for farming were in the counties of Montserrado (39 percent), Margibi (46 percent) and
Grand Cape Mount (52 percent). The current land policy, under which GoL owns all land in the country until deeded
to individuals or corporate organizations, is viewed by some as an impediment to improving agriculture.

II. BUSINESS ENABLING
ENVIRONMENT
A. GLOBAL
The international food price crisis of 2008 had a direct impact on the price and availability of rice in Liberia, and this
underscores the fact that national policies and markets are significantly affected by global conditions. The increasing
price of rice on the world markets led to national policies to open the rice import market in Liberia with the goal of
increasing the quantity and reliability of supply. The global financial crisis of 2009 has also impacted the price and
availability of financing for rice imports to Liberia, as well as for other commodities and inputs. These external factors
set the stage for a national situation requiring an adaptive system of policy, production and marketing that can react to
world markets.
B. REGIONAL
The Government of Liberia, in its determination to boost food production, has allocated $5,472, 000 to the
agricultural sector in the 2008/2009 budget, a 68 percent increase over the previous year. However, this represents 2
percent of the national budget, falling short of the 10 percent budgetary allocation agreed upon by African
governments under the Comprehensive Africa Agriculture Development Programme (CAADP). The GoL is
scheduled to sign a CAADP compact by July 2009.
C. NATIONAL
The Liberia National Rice Development Strategy (LNRDS), published by the GoL in 2009, outlines the strategic
objectives and interventions planned by the government for the next 10 years. The first focus of the Ministry of
Agriculture is to build a national certified seed production system, replicating improved and hybrid seed varieties. The
Seed Bank Program will be led by the Ministry of Agriculture through the national Central Agriculture Research
Institute, with no current plans to include the private sector. In June 2009, the first consignment of 26 MT of high-
yielding rice seed (mostly NERICA varieties) arrived in Liberia, delivered by the Africa Rice Center and purchased by
USAID through the Global Food Security Response Program (GFSR). A second consignment of 24 MT will be
delivered in the upcoming months. Support to the Seed Bank Program will come from three locally operating
NGOs—Greenstar, Africare and Catholic Relief Services.
According to the LNRDS, the strategy is to increase domestic production through improved productivity of existing
upland rice and expanding the area of production for irrigated and lowland rice, recognizing the potential for two
harvests of lowland rice in a single season. The 2009 area of production for rainfed rice (upland and lowland) is
estimated at 210,000 ha (190,000 ha for upland and 20,000 ha for lowland), while irrigated rice is estimated at 2,000
ha. The 2018 targets set by the GoL anticipate rainfed production to cover 222,000 ha (190,000 ha upland and 32,000
lowland), while irrigated rice will represent 10,000 ha. The total domestic rice production (including upland, lowland
and irrigated) is expected to increase from 200,000 MT in 2009 to 330,000 MT by 2018. To achieve these results the
main emphasis for upland rice will include the use of certified seeds and to a lesser degree fertilizer, and the reduction
of pre- and post-harvest losses through Good Agricultural Practices (GAP), extension services, improved storage and

the eventual use of pesticides. For irrigated rice, the primary areas of focus will be on certified seeds, use of fertilizer
and reduction of pre- and post- harvest losses though extension services, water management and GAP.
Rice is one of three strategic commodities the GoL monitors carefully (the other two being petroleum and
cement).While the GoL does not maintain publicly owned warehouses specifically for rice, the Ministry of Commerce
monitors the supply of rice in private warehouses on a weekly basis, ensuring that national reserves do not fall below a
6-month supply of 2.1 million bags (105,000 MT), based on the estimated monthly consumption demand of 350,000
bags (17,500 MT) for Liberia. The GoL does not have a separate and formal strategic national reserve of rice, but it
does leverage and influence the flow of rice imports to maintain the reserves in Liberia through the granting of
licenses for rice imports.
The availability and price of rice is a very sensitive political consideration. Liberia suffered “rice riots” in the late 1970s
and recognizes the need to ensure public confidence in the supply of rice in the country, be that through imports or
domestic production. This mono-crop culture, where Liberians link rice to their national identity and wellbeing,
presents two issues. The first issue is the GoL’s policy efforts to ensure stable stocks and reasonable prices for
consumers, especially urban consumers. The present GoL policy is to increase domestic rice production while
loosening import license restrictions, opening what had been a tightly controlled license permit process for the import
of rice. Local production efforts are weighted towards government controls and direct government and donor
participation in directing seed rice production and supporting direct delivery of inputs and services to subsistence
farmers and state-owned mills. The second issue is the potential moral hazard that has come to fruition in other,
similar mono-crop cultures. The close association of Liberians to rice presents an opportunity for using rice as a lever
for political gains. In other countries, mono-crop cultures have been leveraged through interventions into the market
to increase or decrease the price, distribute seed and inputs, and establish ad hoc import or export bans before
elections. The greater the controls the government organizes, the greater the likelihood that the opportunity cost will
be relatively low to engage in such political tactics.
The Ministry of Commerce insists there are no price controls on the import of rice and that it allows international
markets to determine the price. Nonetheless, the ministry enforces a maximum margin of $1 on FOB price per 50 kg
sack of “butter rice”—the most common variety consumed, considered the staple rice in Liberia.3 Parboiled rice does
not have a margin requirement, and the wholesale price is dictated by local market demand. The GoL takes pride in
the fact that the price of imported rice is lower in Liberia than in the neighboring countries of Guinea, Sierra Leone
and Côte d’Ivoire, as are the prices of the other nationally strategic commodities, petroleum and cement. The national
policy on the informal export of rice from the domestic market or transshipment of rice to neighboring countries is
unclear. Transport operators state that shipping domestic supplies of rice over national borders is not allowed or, at
least, requires a special license or permit. However, during interviews with local traders it was noted that the informal
market is driving some low-cost rice from Liberia into neighboring countries where the price of rice is higher, leading
to increased profits. When asked to estimate the volume of rice traded informally under this scenario, those being
interviewed declined to provide estimates and changed the topic of the conversation. Wholesalers in Monrovia have
noticed that rice retailers from counties neighboring Côte d’Ivoire such as Grand Gedeh and River Gee purchase
more rice than they consume.
The perceptions of informality and network relationships are strong in Liberia and extend not only to business
transactions but also to the court system. In the near term, this may not be critical, but over the medium to longer
term the quality, integrity and confidence in a nonpartisan judicial system based on the rule of law will become critical
3 Butter rice is imported round grain rice from China.

as the business enabling environment becomes more formal. In particular, effective and efficient dispute resolution
will be key to fostering a competitive and adaptive agricultural sector.
Physical infrastructure is exceptionally weak in Liberia. The poor condition or nonexistence of roads is frequently
cited as a constraint to the flow of rice and other commodities—both for moving imported rice from Monrovia to the
countryside and for transporting domestic production in rural areas to local regional markets. There is a private train
service operated by Geoservices Inc. that runs between Monrovia and Bong Mines in Bong County. The service runs
three days a week and includes both passengers and cargo. For a fixed price of 50 LBD ($0.75), a 50 kg sack of rice
can be transported anywhere along the line. In 2008, 315 MT of imported rice travelled this way from Monrovia, and
7.7 MT of domestic rice was sent to the Monrovia market.
There are not enough mills or adequate warehouses in the country, and those that do exist are either no longer in
operation or operate vastly under capacity. The FAO, WFP and other donors have introduced portable mills
randomly in the countryside, but these are community focused and not ideally located for commercial rice production.
To encourage domestic production and improve agro-processing (milling) by cooperatives, the WFP has launched a
Purchase for Progress program to be implemented in the counties of Lofa, Nimba and Bong. The plan is to guarantee
the purchase of rice from local farmers and provide them with milling and storage services. From 2009 to 2010, WFP
will purchase a minimum of 1,400 MT of domestic country rice, valued at more than $1 million from no fewer than
5,600 smallholder farmers, primarily those who are members of participating associations. An additional $1.5 million
will be provided to the program to help build the capacity of farmer cooperatives in agro-processing.
The most common method of milling in rural areas is either by manual pounding or with small, portable milling
machines donated by NGOs. There are no milling facilities for rice in Monrovia, but there is some private-sector
interest in investing in mills, which could be used not only for the milling of rice but also the polishing of older rice to
improve appearance and retain market value. Overall, there are currently no reliable milling services in Liberia, and the
lack of a dependable electricity supply needs to be addressed before further investment in new milling infrastructure
can be expected to occur.
D. LOCAL
The local enabling environment in Liberia can be defined by three major characteristics. The first is the local norms
and beliefs that drive social, commercial and political networks and behavior patterns. Communal land tenure
structures are an important element of these norms. The second characteristic is the effectiveness of key local public
goods services that affect quality of life—particularly health and education services. The third is the overall
effectiveness of enforcement practices.
Liberian rural communities are primarily subsistence farming communities that rely on friends and family networks to
absorb and diffuse risks. This is key to understanding why many in the community have negative reactions to
behaviors that are perceived to limit the reliability of individuals with regards to the network. For example, increased
individual wealth arising from more commercially oriented agriculture is viewed negatively since it may allow the
individual to change his or her role in the community, thus weakening the overall network. Relief work has bolstered
this resistance to commercial agriculture by inadvertently promoting farming inputs as public goods to be provided
free of charge by NGOs and the government. Similarly, some relief programs have devalued the process of learning
and upgrading by paying farmers to participate in agricultural trainings. The combination of traditional risk absorption
and relief delivery practices has fostered a rural society that favors social structures as opposed to commercial
networks, and risk-averse behavior patterns. This is manifested in a number of ways, including:

distrust of the private sector and limited or no long-term commercial relationships;
negative reactions by community members towards any farmers that show independence through upgrading;
and
negative perceptions of individual wealth accumulation.
The second characteristic is the provision of key public goods, including health and education. The health system is
improving slowly, but preventative health care services, especially in rural areas, are not easily accessible. The
educational system—especially in rural areas—is even more problematic. Education is provided through a top-down
system that is imposed on the local population, fostering division between the school (and the Ministry of Education)
and the community that causes a lack of ownership by the community. The content is often considered irrelevant to
the rural population, as it contains minimal links to agriculture or rural livelihood practices. Agriculture is not viewed
socially or culturally as a “business” and is seen as an occupation of last resort.
The third characteristic is the lack of formality in law enforcement throughout the system. While this is not a
substantial issue for smallholders, it is a growing problem for small and medium enterprises (SMEs), including the
three main input firms that sell to smallholders, the transport industry, and potentially post-harvest services such as
milling. For larger, better-connected firms such as importers, the informal enforcement poses less of a problem since
these firms use their connections to avoid informal fees. Some input firms indicate that up to a 30 percent fee is paid
informally to get their supplies out of the port. Transporters say they are regularly stopped by police without
justifiable cause, often resulting in long delays as they negotiate an informal fee to get back on the road. The
inconsistency and uncertainty of enforcement tends to be concentrated on the parts of the chain least able to defend
their interests or leverage political networks. The result is a growing perception among SMEs and smallholders that
the process is biased against them, resulting in shortened time horizons in which they seek to recoup their investment.

III. END MARKETS
The end market for rice in Liberia is primarily defined by imported round grain rice from China, known as “butter
rice,” which comprises approximately 85 percent of rice consumed. While butter rice has the largest share in the
market, the local preference is for the more expensive parboiled rice, which accounts for about 15 percent of the
market. Parboiled rice comes from the United States and from China, though the rice from the United States is
perceived to be of higher quality. Domestically produced rice is known as “country rice.” It is short, round and
yellowish white, often with black flecks and is easily identified in local markets. Country rice is more important in rural
households as a staple food, but can be found in markets surrounding Monrovia for the few urban consumers who
seek the porridge quality of the rice. According to the Ministry of Commerce, demand for rice in Liberia is 210,000
MT rice per year; this translates to approximately 5 kg of rice consumed monthly per person. The Ministry of
Agriculture, on the other hand, quotes a much higher volume of demand at 400,000 MT per year. The inconsistency
in the numbers on rice consumption and production foster some concerns about how to understand or facilitate food
security if the information upon which decisions are being made is not of a reasonable level of accuracy.
A. END MARKETS
The principal market for rice is Monrovia, which is heavily dominated by imported rice. Monrovia drives the baseline
price of both domestic and imported rice that is distributed to rural areas. The principal public retail markets in
Monrovia include Red Light (named for the historical traffic light), Rally Town, Waterside and Duala. The next
wholesale and retail links are segmented into geographic aggregation markets outside of Monrovia that include
Zwedru, Ganta, Sanniquelle, Gbanga, Tubmanburg, Buchannan, Voinjama and Kakata. These are further broken
down into local markets, typically near a group of communities. High-end supermarkets were not observed to carry
domestically produced rice. Rural populations first consume local rice and then purchase imported rice if there is
money available once domestically produced supplies have been exhausted.
B. RICE CONSUMPTION
The per capita consumption of rice in Liberia is approximately 60 kg per year, compared to the average in West Africa
of 19 kg per year. While rice consumption is consistently high across Liberia, the distribution between imported and
domestic rice is notable. Imported rice is consumed by high percentages of both urban and rural populations—97
percent and 79 percent of households, respectively. However rural households overwhelmingly consume the
domestically produced rice (80 percent), while urban households rely on domestic rice far less (17 percent). This is due
to the taste preference for imported rice in urban settings, the availability of imported rice over domestic rice in urban
markets, and the lower price for imported rice over domestic “country rice” in the Monrovia markets.

Percentage of Households Average Consumption for all Households
Consuming Rice (estimated and converted to US$ for 2007)4
Domestic Rice Imported Rice Domestic Rice Imported Rice Total
Rural 80% 79.2% $216 $172 $388
Urban 17.1% 97.3% $26 $305 $331
Source: Tsimpo, Clarence and Quentin T. Wodon. “Rice Prices and Poverty in Liberia.” World Bank Policy Research
Working Paper No. 4742. World Bank, 2008; from 2007 Core Welfare Indicators Questionnaire in Liberia Survey
C. CONSUMER PREFERENCES
Throughout Liberia, consumer preferences seem to be driven primarily by price (see Table 3 below), but as wealth is
starting to be created in various segments of the urban population, the rice market is beginning to segment towards
different quality ranges within the three distinct segments of parboiled, butter and country rice. Country and butter
rice are viewed as more suitable for children because of their filling qualities, while parboiled is better suited for adults.
Country rice, due to the artisanal nature of processing, maintains some of the rice bran on the grain and fosters the
perception that it is more nutritious and is preferred by parents for their children. Country and butter rice are also
perceived to be better for porridge as they are easier to break down by manual pounding into a flour-like consistency.
To help serve the lower end of the parboiled market, lower-quality and mixed grades of parboiled rice have been
introduced at lower prices. There is growing concern among many Liberians about the high starch content in
imported butter rice, which is believed to lead to diabetes. As a result, a new variety of low-starch butter rice has been
introduced by Group 7 Holding importers.
Farm- Retail Market

CIF Wholesale Monrovia Monrovia
Rice Segment gate Redlight Bong Lofa
50kg 50kg 50kg 50kg
50kg 50 kg 50kg 50kg
Parboiled (US) $30 $35 - $36 $36 - - -
Parboiled (China) $30 $34 - $35 $35 - - -
Medium-Grade - - - - - $53.73 - -
Parboiled (Various)
Low-Grade Parboiled $21 $25 - $25 $25 $35.82 $53.73 -
(Various)
Butter (China) - - - - - $35.82 $35.82 $35.82
Low-Starch Butter $26.50 $30.50 - $31.50 $31 - - -
(China)
Country Rice (Bong) - - $26.87 - - $44.78 $35.82 -
Country Rice (Lofa) - - $26.87 - - $62.69 - $35.82
Source: Collected by Authors in Liberia, August 2009
D. MARKET TRENDS AND DEMAND

Based on local interviews, the trend appears to be moving away from traditional butter rice towards lower- and
medium-grade parboiled (more broken pieces, black flecks, mixed varieties of rice, etc.) and low-starch varieties of
4Household averages (not individual) collected during the 2007 CWIQ survey and extrapolated by the authors in: Tsimpo, “Rice Prices and
Poverty in Liberia.” Monetary estimates were originally in Liberian dollars, converted to US dollars with an average exchange rate in 2007 of
LBD 67= US $1.

butter rice. However, butter rice still comprises the majority of the rice consumed in Liberia. Traditional country rice
still has an important role in rural markets and is the first source of rice for rural smallholders. The number of rice
importers has been increasing as the GoL has relaxed requirements for import licenses. With the increase in the
number of importers, there are recent increases in market segmentation and a trend towards specialization of
importers in specific segments.
E. RICE IMPORTS
The number of importers of rice is increasing despite the national campaign to increase local rice production. The
market to import rice is open, but according to one importer, it can only be a profitable business for two or three
importers due to the small national market in Liberia and low population density. Any business in Liberia can import
rice as long as they follow the established process: i) register as a local business, ii) submit a letter to the Ministry of
Commerce indicating the desire to import rice, the quantity, source, grade and price, and iii) provide an invoice or
proof of ownership of a shipment. There are currently five licensed importers of rice: Fouta Corporation, SDTM,
Abranata and Sons, Harmony Trading Ltd., and Group Seven Holding. Melan Inc. applied for a license in May 2009,
and approval is still pending. Fouta Corporation is the largest importer, currently controlling 50-55 percent of the
import market, and aiming to increase that share to 60 or 70 percent. According to an interview with a representative
of Fouta, the company currently imports approximately 210,000 MT annually. As noted above, import statistics are
inconsistent, with the GoL reporting official import numbers and individual importers suggesting higher numbers.
The inconsistency can partially be attributed to annual volumes anticipated by importers that the GoL has not
factored into projections. The second leading importer is SDTM, which is actively trying to get ahead of the growing
market segmentation by bringing in a range of parboiled qualities from various sources.
2001 2002 2003 2004

Product Volume Value Volume Value Volume Value Volume Value
(MTs) US$ (MTs) US$ (MTs) US$ (MTs) US$
Paddy 0 0 0 0 0 0 200 181
Brown Rice 2143 599 18 12 23 17 5689 843
Milled Rice 89911 15130 68300 12097 0 9654 173286 30224
Broken Rice 3479 729 100 22 557 148 3887
Total 95,533 16,458 68,418 12,131 580 9,819 179,175 35,135
2005 2006 2007

Product Volume Value Volume Value Volume Value
(MTs) US$ (MTs) US$ (MTs) US$
Paddy 698 639 544 518 1 1
Brown Rice 72 35 57 34 3004 1277
Milled Rice 0 36189 206885 49651 145723 34228
Broken Rice 0 122 93 20 35 12
Total 770 36,985 207,579 50,223 148,763 35,518
*Value in US$1,000s
*Milled rice includes semi-milled and wholly milled rice as well as both polished and unpolished.
Source: International Trade Center calculations based on COMTRADE data; accessed using TradeMap,
www.trademap.org

IV. CHAIN ANALYSIS
A. STRUCTURE OF THE RICE VALUE CHAIN
High End Urban Market

Urban (Peri-Urban Monrovia- Red Light, Rally Rural Households
Market Town, Waterside, and Duala markets)
Retail Retailers
(small shops and supermarkets)
Retailers
(small shops)
Importer/
Wholesaler
Importers
(1) Fouta Corp., (2) SDTM, (3) Group 7 Holding, (4) Abranata & Sons,
(5) Harmony Trading, (6) Melan Inc.
Traders
Rice Traders
Milling Community
Based Mills
Smallholder Emerging
Storing Producers Commercial
Warehouses Operated by Importers Farmers
(Freeport of Monrovia)
Production ~286,840 Farming Families
On Farm Seed NGO Provided

Input Supply Free Seed
Imported Rice Domestic Production

85% Round Grain “Butter” Rice; “Country Rice”
15% Parboiled (10% Chinese, 5% US 170,00 MT (2007/08)*
160,000 MT (2007/08)*
Channel 1- Channel 2- Channel 3-
Imported Rice Traditional Farmer/ Traditional
Direct Production & Farmer/Trader
Consumption
*Imported rice figures for 2007/08 include both traditional imports and food assistance. The numbers are based on statistics officially
recognized by the GoL in the 2009 LNRDS
The value chain for rice in Liberia is not overly complex and is dominated by importers and their distribution
channels. The main actors in the value chain are importers, wholesalers, traders, local farmers and retailers. The main
functions of the value chain for domestic rice are production, harvesting, storage, milling, wholesaling and retailing.
Importers, Wholesalers and Distribution: With imported rice dominating the volume of rice in the chain, the
primary flow of rice is from the Freeport of Monrovia, to the warehouses of the importers/distributors, from where it
is sold to licensed retailers for national rice distribution (See Figure 2 below). The importers are also the principal
wholesalers of rice, who are required to sell only to retailers that can prove they have received a rice dealership license
from the GoL; licenses are renewed annually.

Source: “Comprehensive Assessment of the Agriculture Sector (CAAS-Lib)—Volume 1 Synthesis Report,” 2007
Production: The domestic production of rice is informal, with smallholders often producing just enough for their
family network and selling any excess on the local community market. According to commercial input firms however,
and verified through discussions with farmers, there is an emerging segmentation of farmers into emerging
commercial, entrepreneurial and subsistence farmers.
Full-scale commercial production of rice is still not operational in Liberia, although there are current investments
underway to develop commercial rice production. The most notable is the African Development Aid (ADA) project
in Lofa County, partially funded by the Government of Libya. The newly registered “Liberian Rice Development
Corporation” is also looking for opportunities in commercial rice production, as are a couple of the current importers
of rice in Liberia, but they are waiting to see incentives from the GoL, such as duty-free agricultural machinery, input
supplies and tax holidays, as well as signals from the government that the enabling environment will be supportive of
a private, commercial operation in Liberia.
Millers: There is minimal milling of rice in Liberia, with virtually all domestic production being milled either by hand
or with portable mills which have been randomly distributed throughout the countryside by donors. There are plans
to rehabilitate state-owned mills through a WFP “Purchase for Progress” program (see above under Physical
Infrastructure), but the overwhelming majority of domestic rice that is currently being milled is through the portable
mills or by hand.

Wholesalers: The principal wholesalers of rice are also the importers, who sell directly to retailers or have their own
distribution networks to the counties outside of Monrovia. Some traders also function as wholesalers who in turn
retail rice in the local informal markets, but they concentrate on domestic and not imported rice.
Traders: Traders serve a key role in bringing domestic rice to regional markets within Liberia. Typically, they travel to
remote rice growing regions (usually an area where they have historical connections) and purchase rice from local
farmers, either milled or paddy. They bring domestic “country rice” to the regional markets of Red Light, outside of
Monrovia, and the county markets of Zwedru, Ganta, Sanniquelle, Gbanga, Tubmanburg, Buchannan, Voinjama and
Kakata. The wholesalers of importer rice in Monrovia sell directly to retailers who will either contract transportation
services directly or supply their own transportation.
Input Supply: Seed rice has predominately been distributed for free by donors and NGOs, which has discouraged
commercial seed demand. There are three seed companies in Monrovia—T.R Enterprises, Inc., Green Farming Inc.,
and Anarco Trading Enterprises. More common in the stores is the sale of vegetable seeds, which are viewed as
having a higher return on investment. In addition, farmers have been hesitant to pay for new varieties of rice seed
because of bad experiences with the poor quality of some donated rice seed. Retail prices in May 2009 for rice seed
varieties LAC 23 and Suakoko 8 were approximately $18 per 25 kg bag.
Fertilizer is nonexistent outside of Monrovia due to high costs, lack of availability and weak technical knowledge in
application; and there are minimal supplies in the capital. Urea, Triple Super Phosphate (TSP) and 15-15-15 were the
only fertilizers observed in Monrovia, with a cost of $60 per 50 kg bag, regardless of the type of fertilizer. The
commercial 50 kg sacks have also been broken down and repackaged in smaller sizes of 25 kg, 5 kg and 1 kg. While
the duties on the import of seeds and tools were removed in April 2009, they still exist for fertilizers (7 percent) and
pesticides.
B. SYSTEMIC CONSTRAINTS IN THE VALUE CHAIN
The business enabling environment affects the value chain in multiple ways and at all levels. The overall chain is
simple, but inefficient. The GoL and donor community are the principal drivers of the enabling environment, with the
private sector exerting minimal influence and the informal sector more active in local community markets. The key
drivers at present are smallholder perceptions of rice as a safety net crop and the government reinforcing this notion
by sending signals such as the announcement of investments and efforts to keep prices low. The government
influences the value chain through direct interventions, including direct and indirect price controls, indirect control of
the seed rice industry, and planned direct investments in milling.
A small number of smallholders do produce a smaller second field of rice as a cash crop or security for the first field,
but the practice is not common. The land and labor required yield higher returns on cash crops such as cocoa, palm
oil or rubber. The preference has been towards working in upland rice, which is the traditional method of producing
rice, but the GoL, donor community and NGOs are promoting a shift towards higher-yielding irrigated rice. While it
is widely understood that lowland rice is higher-yielding, there is smallholder resistance to adopting the practice due
to:
perceived additional labor requirements;
perceived need for specialized inputs to establish and maintain lowland rice, such as elaborate irrigation
systems, rubber boots, specialized tools, etc.; and
fear of disease from exposure to working in flooded rice tank.

Negative feedback is often directed at individuals and communities that challenge the status quo. Although private-
sector education and promotional campaigns delivered through input firms, buyers and community leaders could limit
the negative feedback and even fostering positive feedback for wider change, such a strategy has yet to be applied in
the Liberian context.
The lack or poor condition of infrastructure is a considerable constraint in the value chain, including damaged feeder
roads, abandoned, inefficient or under-utilized mills and warehousing in varying degrees of disrepair. Domestic
producers and traders often cite the poor condition of roads as a major obstacle to the flow of rice from production
areas to community- or Monrovia-based markets. The unreliability of transportation due to poor road conditions
often prevents surplus production from being brought to market and makes it difficult to deliver inputs to production
areas.
The end market for rice in Liberia can be defined by three channels. The first is the high-end urban channel seeking
high-grade international rice or imported specialty rice. It is not feasible for rice producers in Liberia to target this
segment in the near to medium term because the benefits of meeting market requirements do not justify the costs.
The second market segment serves the low- and mid-range urban population, and could present a medium-term goal
for Liberian rice producers. It is a growing segment and represents rice that can be produced and delivered by local
producers.
The third market segment is rural market demand. Rice volumes supplied by rural producers are currently insufficient
to satisfy this demand. Meeting the needs of the rural population by upgrading basic production is the near-term goal
of the local rice industry. In addition to a lack of seeds and labor, which were commonly cited constraints to rice
production, post-harvest losses have been estimated at between 40 and 50 percent (see Table 5, next page). Most
farmers acknowledged that they do not receive regular visits from extension agents; however they tend to focus on the
causes of post-harvest losses as a major constraint to production rather than a lack of extension services.
Grand Cape Mount, Bomi and Lofa, Bong and Maryland, Grand Kru
Grand Bassa Nimba and Grand Gedeh
Rats/Mice 87% 93% 87%
Birds 14% 33% 34%
Poor Storage 20% 14% 32%
Human Theft 2% 1% 5%
Bird Attacks 95% 89% 91%
Threshing 76% 66% 94%
Pounding 89% 69% 92%
Source: “Post Harvest Crop Assessment—Liberia: Rice and Cassava.” Ghana: ITTAS Consultancy Ltd, August 2008

C. VERTICAL AND HORIZONTAL LINKAGES, GOVERNANCE AND
INTER-FIRM RELATIONSHIPS
In contrast to other crops that have rebounded quickly in post-conflict Liberia, such as rubber and palm, the rice
industry has languished due to substantial gaps in the input, production, post-harvest, processing and aggregation
functions. There is little private investment, and as a result the vertical relationships that have formed are short-term
in nature and driven by opportunistic (“zero-sum”) negotiating perspectives, leading to a high degree of distrust
between value chain actors. Since so few commercial processers, millers or retailers are dependent on local
production, there are limited economic incentives for developing longer-term, more trusting relationships in the
domestic rice value chain.
The one set of relationships that could foster greater smallholder production is the inputs industry. The GoL and
donor community have indicated that upgrading of the inputs industry is a priority as means to increase smallholder
productivity. The non-rice seed industry is primarily a retail distribution network that delivers products, services and
knowledge to its clients. It is very weak, with only a few formal firms active and a range of local informal traders
selling via local markets to smallholders. While donor programs continue to provide free inputs to many smallholders,
the commercial inputs industry is also selling products, primarily fertilizer and crop protection products, to farmers.
Poor record keeping makes exact amounts difficult to ascertain, but input firms have noted that rice producers
purchase very little seed, fertilizers or pesticides. The fact that there is an established foothold (albeit small) in the
smallholder market is a critical entry point for further commercialization. Input firms have the potential to sell
services in addition to products, particularly post-harvest services such as post-harvest crop protection, improved
storage and processing via mobile mills.
The GoL is interested in promoting the development of the seed industry, but not by offering incentives for
investment and a reasonable enabling environment. Instead, it provides funding for two NGOs and one commercial
firm to grow seed rice for eventual sale, although the specifics on how the retail distribution will work are unclear.
This sends a signal to the private sector to stay away, and this will likely slow the development of critical linkages to
input distribution networks. This could evolve into a major constraint, as smallholder adoption of improved seed
varieties is critical to their ability to increase yields without much additional improvement in on-farm practices.
According to farmers, the traders working through the local markets called “gobyeshops” (pronounced as if it were
Gorbachev) are perceived as using exploitative negotiation tactics. The gobyeshops do have a strong organizational
structure with a clear hierarchy that at times leads to informal collusion on pricing. However, the traders work in
multiple crops (rice is a relatively small part of their business) and prices are widely known. It is therefore unrealistic
that they would have much interest or ability in being overly predatory. The lack of trust in these relationships is in
part a result of farmers’ poor planning and production practices that make them desperate to sell at harvest time.
There are few quality requirements that result in price differentials and there are almost no quality-differentiated
market channels.
According to the main importers, imported rice flowing into Monrovia and then filtered into the countryside seems to
flow smoothly with organized margins. Importers interviewed did not have any specific relationships issues with their
distribution networks, but they did say they do not monitor much past the first layer of transactions. In any event, the
importers indicated that most imported rice (about 70 percent) stays in Monrovia.

In some communities, Liberian farmers have revitalized traditional forms of cooperation, primarily to manage labor
shortages that are tied to slash-and-burn extensive agriculture practices. These informal forms of cooperation could be
harnessed to reduce transaction costs around the purchase of inputs and the marketing of production. Any efforts to
this end should consider local preferences for or against cooperation. In some communities, cooperation during
commercial transactions is seen as problematic as people do not want others to see how much money they have to
invest. For example, farmers will often buy multiple small volumes of inputs from input firms, so that others in the
community do not see them making large purchases.
Donors and government are promoting the formation of formal cooperatives, initially by revitalizing pre-war
cooperatives. This presents a number of potential concerns. First, the formalization process is often driven by a need
to access assets and resources, creating an unsustainable driver of cooperation. The WFP with the GoL have
established rules where only selected formal cooperatives that have registered with the Cooperative Development
Agency can access the Purchase for Progress program. The process is distorting incentives in the market place via
political favoritism for these farmers over others and the potential for GoL and WFP to send unintended price
signals. The second concern is about the process donors follow in cooperative formation. Specifically, many donors
push cooperative organization in order to balance power between farmers and traders or input firms. The key
problem is the perception of these firms as adversaries to farmers that is driving how commercial relationships are
formed and conducted. The purpose of cooperation is to deal with specific joint issues such as mutual labor shortages
and possibly creating interest among buyers and input providers to invest in and establish more effective relationships
with the farmers. At present, many government and donor activities are not driving effective cooperation.
However, there is a donor effort to assist input firms to foster cooperation by using community members to act as
agents. The village agent organizes purchases of inputs on an individual basis, but presents them to the input firm as a
bulked order. The village agent receives a commission for this bulking service. While only in the initial stages, the
process presents an alternate way for cooperation to be achieved without a formalized farmer organization.
Transporters cooperate fairly well through their union, but other actors in the value chain need to learn how and
when to cooperate. For example, input firms face problems in the port’s informal application of rules, but they have
not worked together to present a united message that could carry more weight. The private sector in general is not
engaged as a group to counter policies that might limit their opportunities, such the government’s investment in mills.
D. SUPPORTING MARKETS NECESSARY FOR UPGRADING

Support markets in Liberia are generally very weak with limited depth and capacity to provide anything but the most
basic services and products. The key support services for rice and the broader agricultural sector can be grouped into
finance, cross-cutting and sector-specific services.
The financial sector in Liberia is primarily made up of banks and insurance companies. A few donor-supported
microfinance organizations are active, but at present they focus on solidarity-based lending and have not scaled up,
making them less immediately relevant to economic growth. There are large regional banks that have entered the
market, such as Eco Bank and the United Bank for Africa (UBA), but they are starting cautiously with regard to
commercial lending. Banks in general are very liquid and have limited opportunities to place their funds. Most if not
all the excess liquidity is short-term, so longer-term investments are not advisable. Understanding of agriculture,
including the terms appropriate for agricultural businesses, is almost nonexistent in the banking sector. The link
between the financial sector and the equipment industry is also nonexistent. Leasing is on the agenda of most banks,

but not available to SMEs. Micro-leasing tied to equipment dealers may present a way to engage microfinance
organizations in more commercial agricultural activities, but would require further upgrading of microfinance
institutions.
Insurance companies are active in the market, but offer only basic products. Crop production insurance, warehoused
crop insurance and other types of agribusiness insurance products are not available. If such products were available, it
is unclear if the market could support them as there are only a few fully commercial agribusinesses and only one in the
rice sector (the Libyan-supported commercial rice concession ADA). Over the longer term, as commercial
production, milling and storage scale up, these types of products will become important. Liquidity in the insurance
industry is likely to be high and represents a possible near-term source of capital for commercial ventures.
ICT is an important sector and is growing primarily through mobile phone services. Linking this industry to the
agricultural sector is important. The key is to make the link commercially viable and appropriate for both sides.
Immediately, leveraging already active technology such as community radio or SMS to increase the flow of market,
production and technical information would be useful. In the near to medium term there is potential for the financial
sector to use ICT for mobile banking services for the unbanked, and both sectors are interested in this prospect.
Commercial radio is a popular and widely used tool that reaches a broad audience in Liberia, both in peri-urban areas
as well as in the remote countryside. The stations and programs could be an efficient means to extend broad-based
and specific market information. Legal services are another cross-cutting theme that will eventually play an important
role in the agricultural sector as commercialization evolves. In particular, legal service in the area of alternative dispute
resolution is of growing importance and will be critical for SMEs entering the rice industry. The informality and cost
in terms of time delays in the courts is an issue according to non-agricultural firms, and this is likely to affect
agricultural firms once the pace of commercialization increases—and with it, corresponding contracts, agreements and
disputes. Legal services are also potentially important in regards to lobbying efforts, which will be an increasingly
important component of a commercial agricultural sector and thereby the rice industry.
Transporters seem to be relatively organized as a service sector, with two major voluntary unions coordinating this
services market. Pricing transparency and limited concerns expressed by farmers and traders indicate that while
efficiency improvements could be made, there are no major relationship issues with transporters. Transport is mostly
controlled by a combination of traders and transport unions, giving farmers the option to organize transport
separately or include it as part of the transaction if the sale is made to traders at the farm gate. The result is that,
despite the bad reputation of traders, choice within the transport system limits how aggressively they can apply their
predatory practices.
At present, equipment dealers are not actively selling to Liberian farmers because donors dominate the client space,
crowding out other clients in terms of size of order and perceived reliability of payment. As a result, many of the
equipment dealers are not building distribution and service networks. Even the few donor programs that are focusing
on building an equipment supply chain are doing so based on artisanal blacksmiths that are not scalable or reliable for
replacement parts as their ability to make uniform components is minimal.

V. OPPORTUNITIES AND INCENTIVES
FOR UPGRADING
A. ENABLING ENVIRONMENT UPGRADING
While there are many challenges facing Liberia, the Ineffective Public Goods and
relational and institutional structures, including the Market Signals
formal and informal rules that drive behavior, are not Whether intended or not, the current enabling
yet calcified with vested interests. The fluid state of the environment has made the private sector and rural
political, economic and social fabric of the country will communities highly susceptible to signals sent by
remain to an extent as long as donors and the UN government and donors. Emerging from a relief-
continue to be important components of the enabling dominated economy, private firms and farming
environment. The substantial public goods roles that communities remain dependent on either the short-
they are directly taking on further destabilize the term petty trading of goods or donor programs to
situation as they foster uncertainty by shielding key generate income. Broader and more sustainable
ministries from taking responsibility and by devaluing economic growth requires a greater emphasis on
the importance of the private sector in developing developing productive and other private-sector
wealth and associated tax revenue. The GoL has stated industries that can add value and create wealth.
its intention to take on more of these roles and try to Donors and the government continue to send
coordinate areas that it cannot at the moment take on. controlling and distorting signals either directly
The GoL’s interest in expanding its role presents an through their actions (i.e., free inputs, purchasing
important opportunity to upgrade and improve the output, investing in government rice mills, etc.) or
stability of the business enabling environment. indirectly through the proposed setting of a price
Policy is not static: it is a process of participatory range for seed rice, setting the margins on imported
formation around an objective, public education, rice, and pushing specific organizational structures
implementation and enforcement, monitoring and such as cooperatives to access public goods services.
oversight. Liberia’s current focus on specific written Such signals crowd out the private sector, foster
policies as a solution at the expense of the other continued reliance on unsustainable structures—
components of the process leaves the overall policy including donors, the WFP market, government
system unable to adapt effectively. Economic and mills, etc.—and devalue investment in upgrading.
particularly agricultural policy that is designed to foster
development needs to be adaptive and resilient when dealing with the fast-moving dynamics of the local, national,
regional and global enabling environments. Opportunities exist to upgrade the business environment in the following
ways:
develop transparent and open stakeholder networks
develop public education processes and channels to inform and empower firms and farmers with knowledge
of the rules and their rights
invest in enforcement capacity, including strengthening incentives that drive enforcement practices
invest in oversight and management capacity, including transparent and clear performance-based incentives
invest in the monitoring and assessment capacity of industry associations, civil society, research organizations,
independent media and governmental organizations to ensure effective checks and balances of interests

develop the capacity of industry stakeholders to present their issues and concerns to government in a
constructive and effective way
link all stakeholders into the transparent and defined policy assessment and adjustment processes
One of the major challenges the government faces is fostering private investment in the agricultural sector, including
the rice industry and support markets. The main policy priorities to strengthen the private sector should include the
following:
increasing the efficiency and transparency of the processes for starting and operating businesses
developing clear and transparent incentives for private investment including foreign direct investment via
taxes, development of a one-stop shop for investors, and clear guidelines on current regulation
shifting from interventionist practices to providing regulatory and oversight frameworks that allow
commercial networks to form and flourish—focusing on input, seed and agro-processing industries
improving enforcement mechanisms and practices, including credible mechanisms for commercial entities to
communicate improper or inconsistent enforcement practices
establishing a clearer policy and oversight framework for linking quasi-public research entities and
commercial distribution entities for both inputs in general and post-harvest practices. Research would not be
exclusively on new seed varieties, but also include the use of a wide range of inputs and post-harvest practices
increasing the pace of infrastructure investments focusing on roads, utilities, water, electricity and ports
improving the relevance and capacity of the educational system at all levels to the commercial agricultural
sector through content, practices and engagement with commercial entities
improving judicial processes, especially for commercial disputes (e.g., contract, credit defaults, etc.) including
the emergence of guidelines for alternative dispute mechanisms
B. INDUSTRY-LEVEL UPGRADING
Poor relationships in the value chain have resulted in a high percentage of subsistence-based production and limited
upgrading. They have encouraged exclusively price-based competition and the emergence of a vested trading class that
controls much of the trade passing through the rural production channel to the poorer mass market channel. It is
critical to leverage the changing urban consumer patterns to foster multiple channels with more appropriate
governance structures as a means of changing incentives and pressuring value chain actors to upgrade. This can be
achieved by the following:
Facilitate directed channels.5 For local production to compete in the emerging market channels,
investments will be required in seed varieties, other inputs, grading, storage and processing. The current
market system does not have the capacity or incentives in place to invest or upgrade as required. Competing
in these segments will require new stakeholders to invest in the processing or production sides of the rice
sector. However, they will need to rely on or supplement their own production with smallholder production,
and will therefore need to manage a smallholder supply network. Strong commercial incentives such as the
ADA rice concession investment may be leveraged for this purpose.
5In directed channels, small-scale producers are dependent on a much larger buyer that often wields a great deal of power and control and closely monitors the
entire production process. In such channels it is common for the larger firm that “directs” the producers to provide technical assistance; such buyers may (or may
not) also provide inputs, credit, transport or other services.

Facilitate a more competitive inputs industry. Fostering directed channels is critical, but will take time as
the returns on investment are currently unclear and potential investors are therefore wary. Upgrading the
inputs industry, however, would have an immediate effect on production—including that of subsistence
farmers. The inputs industry at present is very weak, and an upgrading strategy should focus on encouraging a
shift from extensive to intensive farming through the use of improved inputs and farming practices to
maintain soil fertility and increase productivity.
Foster channel-to-channel competition. Upgrading the general market channel with the vested trader class
and subsistence farmers that are unlikely to transition to commercial rice production will be difficult in the
near to medium term. The process of aggregating product is incremental, and economic and social incentives
are often at odds. When new channels emerge with different relationships (such as directed channels),
support will need to be provided to those smallholders who attempt to shift from subsistence to
commercialization. This may be achieved by assisting firms with outgrower networks, trader/broker
representatives of such firms or processors to reach out to these emerging commercial smallholders with a
package of embedded services and a guaranteed market. Through competitive pressure, upgrading in the new
channel is likely to also drive upgrading in the general market channel over time.
Facilitate commercialization through growth. Fostering directed channels, upgrading the inputs industry,
and encouraging competitive pressure on the general market channel to upgrade will result in a range of
opportunities to increase the pace of commercialization. Two critical benchmarks in the commercialization
process are shifting the balance from extensive to intensive farming of rice cultivated through new investment
and individual farm upgrading, and multiple harvests per year from irrigated and mechanized farming
practices.
Facilitate more effective support markets. Finance and ICT are particularly important support markets,
but they can also distract from more important relationship or incentive-based constraints. Finance in the
near term needs to be focused on alleviating liquidity problems for actors in the chain that can drive
productivity gains and upgrading—actors such as equipment suppliers, services providers, processers and
possibly larger firms (through trade credit). Smallholder input credits should not be the focus in the near term
unless directly linked to an assured market through a directed relationship. Input credit for smallholders
without the pressure to shift beyond subsistence farming practices is likely to result in increased risk to all
involved without the required gains to cover the risks.
C. OPERATIONAL UPGRADING
The rice industry has numerous operational challenges. Many, though not all, can be eased through public goods
infrastructure investments and enabling environment improvements. The most immediate concern is the high cost of
production due to weaknesses throughout the chain. Specifically, efficiency gains are needed in the areas discussed
below.
1. Inputs industry
The inputs industry requires upgrading at all levels, including building a viable wholesaling function, retail distribution
networks, and services and equipment aspects of the industry. The industry must also develop promotional campaigns
that educate farmers about the needs for and benefits of inputs. Distribution networks must directly link into rural
communities in order to leverage the emergence of local service markets for spraying and tillage/land preparation.
Inputs providers must shift their business model from one of maximizing margins per unit to one of increasing the
number of clients reached and products and services sold. This change in business model will require:

distribution networks (people) at first, with physical outlets (bricks and mortar) following once significant
volumes are being sold;
marketing and promotional efforts based on farmer education;
expansion outside sizeable towns that is based on ordering point—with orders made or paid for in advance,
where possible, to reduce risks and costs and foster the rapid growth of the inputs sector;
shift inventory, marketing and sales tactics to meet the financial flows of smallholders;
provision of services for chemical crop protection;
delivery and sales tactics that bundle services and products; and
changes in management structure to facilitate responsiveness to customer trends—including decentralization
and mid-level management development.
2. Seed industry
The seed industry for rice is just emerging. The link between research and commercial production and distribution
needs to be facilitated within a viable and appropriate certification oversight process. While this is a critical role for
government, the production and distribution functions should not be driven or controlled by donors or government,
as is currently being proposed.
3. Production
On-farm production must be weighted toward commercial production that focuses on SMEs rather than solely on
large, concession-based schemes. Active commercial entities such as importers, buyers and traders and emerging
commercial smallholders should be supported in facilitating or engaging in small- and medium-scale commercial
production. The investment and knowledge flows needed by farmers to upgrade should come from input firms,
emerging commercial farmers in the community, and buyers (trader and brokers), as well as through outgrower
schemes. It should be through these relationships that the GoL and donors provide support to smallholders. Through
these commercial networks, subsistence farmers will be able to identify and move through a series of incremental,
low-risk steps toward becoming more business-oriented and productive. As a result of this process, subsistence
farmers will be able to produce enough rice to meet their subsistence needs, which will then allow them to move
quickly into a range of commercial crops for wealth creation purposes. Some farmers will choose to further expand
their rice production for commercial purposes.
4. Transportation
Transporters are relatively well organized, but more can be done to improve efficiency and harmonize local transport
patterns with the prioritizing of market infrastructure for upgrading. For example, the Red Light Market combines
wholesale and retail and is situated almost directly on the main transport road between the high-production areas and
Monrovia. The movement of commercial trucks through the market place is slow and dangerous. There are plans to
move the market, but it will be important to engage transporters in the discussions and decisions on market
infrastructure.
5. Aggregation
Aggregation must be closely linked to transport, but opportunities also exist to introduce new business models that
shift the incentives from adversarial transactions to alliance-based transactions. At present, there are no uniform
quality standards and price premiums are not given for higher quality produce; thus there is no incentive for farmers
to upgrade production. Shifting incentives to strengthen cooperation, especially at the aggregation levels, via
brokerage services or more directed channels is critical. Although this shift is likely to be a longer-term effort, since it
requires engaging many vested interests that are likely to take time to change, as a starting point, traders should be
engaged to assess their interests in moving to brokering services or more transparent buying practices.

6. Post-harvest services and processing
Building reliance on public funds for scaling up post-harvest handling and processing capacity will ensure on-going
inefficiency and limited outreach as public funds are scarce and there are substantial competing demands for them. At
the same time, the private sector will not enter a market where signals imply that the government wants a monopoly
or at least an active role as a direct service provider. While this situation would be a disaster for the rice industry in any
country, it is especially problematic for Liberia, where post-harvest handling and processing accounts for up to 50
percent of losses. Improving efficiency in these areas through new private-sector investment would substantially
improve food security and help stimulate the commercialization of the rice industry. Larger processors can be
encouraged to enter the market through interventions that facilitate finance, organize directed supply chains, provide
linkages to input firms and assist with marketing and branding for urban markets. In addition, with appropriate
assistance, opportunities exist for smallholder organizations, input firms, processers and buyers to develop post-
harvest services, such as threshing and parboiling, and appropriate storage facilities.
7. Finance
Finance needs to be commercially driven and targeted to the functions and relationships in the value chain that will
bring the greatest upgrading (returns) to the industry. In rice, the actors with the greatest upgrading potential are the
inputs industry, including equipment and service suppliers; the emerging and existing commercial producers seeking
to mechanize; and entrepreneurs intent on launching milling, storage, processing and/or marketing businesses. Of
course, efforts should target not only rice farmers, but also those producing other crops. Opportunities exist for
finance to go beyond credit to push savings and planning (insurance) services for smallholders and to foster the
monetization of rural economies via ICT-based transaction services. Equity and bond mechanisms (especially for
SME commercial ventures) have the potential to attract the excess liquidity in insurance companies and pension
funds, as well as drawing in international social investors.
8. Information and Communications Technology
There are opportunities to incorporate ICT into building chain efficiency: in particular, scaling up and expanding the
use of short message service (SMS) technologies to create more dynamic information exchanges, and electronic
transaction, town-transfer6 and payment services.
D. PRODUCT AND BRANDING UPGRADING

The rice end market is starting to segment around starch content and quality. The complexity of this segmentation is
likely to continue as local production increases and new seed varieties enter the input market.
Branding opportunities for Liberian rice are limited and will remain so until the efficiency challenges are overcome. As
efficiency improves, there are two branding opportunities. The first is for country rice, which is becoming increasingly
important as a source of food for children. Value chain actors can to build on the perception that country rice is
particularly good for children because of its high starch content.
The second is a longer-term goal and exists in parboiled rice—the demand for which is growing, according to
importers. Since there is also increased segmentation by quality among middle-income urban dwellers, local rice
production could potentially take advantage of these two trends. If parboiling capacity can be increased—which will
require substantial investment—there will be multiple opportunities to establish brands of parboiled rice based on
variations in quality. Marketing around support for Liberian local rice can be leveraged to advance both of these
branding opportunities.

VI. STRATEGY
The Liberia rice industry is nascent and unable at present to meet the demand from urban populations, and at times
even to cover basic rural family needs with subsistence production. The many short-term, opportunistic trading
relationships are not effective in fostering upgrading at the farm or processing levels. Furthermore, these weak
relationships are supported by an ineffective enabling environment that fosters uncertainty and encourages a short-
term mind set. The result is that for the Liberian rice industry to upgrade and begin to compete effectively with
imported rice, there will have to be a transition to commercially based relationships from the input to the retailing and
branding of local production. The challenge is how to balance substantially speeding up this commercialization
process while supporting the slow upgrading process of rural subsistence farmers to ensure that they are more
consistently able to provide for their own needs. These are not mutually exclusive goals, as in the long run a
competitive rice value chain will provide food security, but in the near to medium term the commercialization process
will need to focus on fostering commercially oriented investments that are not likely to be driven by or even include
subsistence farmers.
The strategy outlined below is designed to achieve this dual track by i) incorporating, where possible, smallholders that
demonstrate a willingness to upgrade and commercialize, and ii) lowering the risk for subsistence farmers to take on
manageable upgrading steps via improvements in the inputs industry. The strategy is built on the upgrading
opportunities discussed in the previous section—in the enabling environment, at the industry level, throughout the
functions of the chain, and with the product and its branding.
A. VISION FOR THE VALUE CHAIN AND FOOD SECURITY

In the near term the vision for rice will include ensuring that smallholders consistently produce enough rice to fulfill
household needs, thereby enabling them to increasingly enter commercial production of a range of crops, including
rice. Commercial production by a range of firms and farm sizes will substantially increase. Private investment will
build post-harvest milling, storage and processing capacity. The inputs industry will grow and develop distribution
networks directly into rural communities, and support markets will emerge in support of key growth segments.
However, the vision for rice must fit within the context of a broader competitive agricultural sector. Therefore, the
longer-term vision is a rice industry that is part of a diversified, competitive and adaptive agriculture and natural
resource sector that delivers broad-based wealth creation.
B. VALUE CHAIN COMPETITIVENESS STRATEGY

A value chain competitiveness strategy for rice must start with near-term goals, but be implemented so as to establish
a platform for the longer-term competitiveness of the broader agricultural sector. In order to accomplish this, the rice
value chain upgrading strategy should focus on increasing commercial production and encouraging private-sector
investment throughout the chain at all functional levels. Much of this can be done by leveraging the incentives and
activities of existing actors—importers, smallholders taking on commercial practices, input firms and other
businesses—to encourage or facilitate the entry of others actors (including foreign investors) into the value chain.
Linking smallholders to more directed channels where possible should be a priority to establish reliable supply chains
that include effective vertical relationships resulting in ongoing upgrading. Linking service market opportunities for
6A town-transfer service refers to an urban-to-rural or rural-to-urban transfer of funds. Town transfers can promote urban-to-rural remittances,
potentially reducing the need for sales of assets in order to access cash.

production and post-harvest services into these directed channels will be critical to increasing the pace of
commercialization.
Subsistence smallholders will not be the drivers of the industry’s commercialization process, as their transition to
more commercially oriented farming practices will take place over a longer period and should not be focused solely on
rice. The near-term focus for smallholders in terms of rice will be to facilitate their ability to more easily and
consistently meet their basic food requirements by linking them to more competitive and growing input and seed
industries. As commercial networks evolve and the number of smallholders that move beyond subsistence farming
grows, the links established by the early-adopting commercial smallholders can be used by others in the community
that want to increasingly commercialize their agricultural production.
C. UPGRADING TRAJECTORY
The main initial indicators of success in moving this strategy forward include the following:
input firms have direct distribution links into smallholder communities via formal commercial relationships
educational promotional events are conducted by input firms
smallholders increasingly invest in their farms, as measured by the purchase of inputs
localized private spraying services emerge
localized post-harvest services—especially threshing, drying and spraying—emerge and are linked to
commercial input firms
private investment in milling and storage services increases
the market for imported rice is increasingly segmented
a higher percentage of local rice is produced on commercial farms
smallholder yields increase
rice producers increasingly use mechanized land preparation
directed channels for smallholder rice production emerge
government implements transparent and participatory policy cycles
government and donors signal a move towards improved management of public goods
conservation practices (and reduced extensive farming practices) are increasingly applied
income from rice and non-rice crops increases
commercial finance enters the services and processing functions
investment are made in ICT and ICT is used to foster knowledge flows and communication and decrease
transaction costs

VII. RECOMMENDATIONS FOR USAID
A. IMPROVE THE POLICY PROCESS AND BETTER MANAGE MARKET
SIGNALS
At the national level, the focus should be on addressing the practical weaknesses of a poorly formed and implemented
policy process cycle. The importance of rice can be leveraged to introduce or strengthen many of the missing or weak
components of the cycle. As part of this process, substantial capacity building is needed at the upper, mid and lower
levels of government to understand the importance and dangers of unintended (or even intended) signals to the
private sector. If the private sector is to drive growth and generate wealth at multiple levels of society, then incentives
that draw them into the rice industry and broader agricultural sector are critical. At present the government and
donors are signaling to the private sector either to stay away, in the worst case (e.g., milling), or in the best case, to
enter at their peril (production, inputs industry, finance, processing, etc.).
B. STRENGTHEN THE INPUTS INDUSTRY

A competitiveness strategy for the inputs industry as a whole should not be dependent solely on rice, but should
recognize rice as a major initial demand-driver for the majority of smallholders. Upgrading in the inputs industry will
help the rice subsector as well as the agriculture sector as a whole. Specifically, it is critical to shift the inputs industry
to a solutions-based industry that delivers products and services as a means to overcome labor limitations and
intensify production. The industry must grow through increased volumes of products and services sold to a broad
clientele, not through increased margins per product or service. Linking smallholders to emerging post-harvest,
milling, storage and processing services will also be important and where possible these services should be tied to and
build upon relationships with input providers.
C. IMPROVE ACCESS TO FINANCE

Finance needs a dual-pronged upgrading strategy. The first prong is to build the capacity of mid-level and junior staff
in the financial sector to effectively research, design, market, assess and manage various financial products for the
agricultural sector. In the near term, the focus should be on the banking sector, with the insurance sector following
closely behind when opportunities present themselves. Capacity could be built through an open technical assistance
window, whereby financial service providers could apply for cost-shared technical assistance. The second prong is
facilitating new entrants into the financial sector that specifically target rural populations, agriculture and agribusiness.
In particular, the strategy should target mobile banking for the unbanked, investment banks, social venture capital
firms, pension funds, insurance firms and equipment dealers (tied to leasing firms or banks).
D. LEVERAGE OPPORTUNITIES IN ICT

The ICT support market is critically important in Liberia. The high transaction costs associated with dispersed rural
populations and poor roads mean that developing more trusted relationships will be dependent on lowering the costs
of communication, information flows and transactions. There are technologies already in use and others based on
mobile phone networks that could be better harnessed to lower costs and foster more effective relationships. The key
is to integrate the technology into existing or emerging business models, as opposed to developing a new application
or technology. The crossroads between banking for the rural unbanked and new technologies and innovations (e.g.,

SMS, scratch cards, etc.) has brought about a range of town-transfer and transaction services that have become
proven business models. Public information systems via SMS are already widespread in the region, but not harnessed
in Liberia as of yet by market players for price discovery, tracking shipments, sourcing products or promoting services
and products. The driving criterion for using ICT must be cost effectiveness for the actors based on their end goals.
Local ICT firms can also be leveraged to develop links to and client relationships with the agricultural sector in
general and the rice sector specifically.

VIII. TOPICS FOR FURTHER
INVESTIGATION
Segmentation of the End Market: The end market is changing with a shift towards parboiled rice of
various levels of quality, but the pace of this change is unclear. The urban versus rural divide in consumption
patterns needs to be better understood, as well as how changing consumption patterns will affect the value
chain. A better understanding of the dynamics of the end market is essential for new investment, especially in
the area of processing.
Segmentation and Emerging Commercialization Process in the Smallholder Sector: Critically

important at this point in the development of the rice sector in Liberia is a better understanding of the
dynamics within the smallholder production segment. There are multiple indications—including the purchase
of inputs, links to commercial buyers and a range of production practices—that there is some shift within the
smallholder producer segment from subsistence to more commercially oriented production. However the
pace and scale of this change is not well understood. The value of this information is critical not only to
donors to understand the change process, but also for commercial actors to understand the opportunities
within this sector (e.g., smallholders as consumers of inputs and services).
The Flows of Imported Rice through Liberia to other Countries: According to the figures available there
is an oversupply of rice, which could make sense given the suppressed price of rice in Liberia compared to
neighboring countries. However, the exact flow of this excess rice is unclear. Does it actually flow informally
to neighboring countries, or is it stored at various locations along the distribution channels internal to Liberia,
and/or is there a more formal arrangement specifically forming to take advantage of this perceived
arbitraging opportunity?
Risk Appetite of Commercial Investors to Invest in Production, Milling, Storage, Processing and
Branding of Local Rice: Multiple private investors indicated their interest in investing in seed, production,
milling, etc., but they say that government policies are either hostile to non-Liberians, unclear, enforced
informally, and/or unsupportive of clear land rights that would be required to invest substantial funds. The
GoL, on the other hand, clearly states its interest in attracting more investment (local and foreign). The
overall policy process—from participatory design to enforcement to assessment to policy improvement—is
not working well and is partly responsible for this disconnect, but a better understanding of the key
constraints and the real costs associated with them is critical.
Increased Nutrition through Improved Varieties of Rice: Chronic malnutrition remains systemic in
Liberia and any discussion of improved rice varieties should include nutritional content and the potential
affect on the nutritional situation of Liberians, especially rural Liberians. Understanding and including
nutritional information in the discussion is especially important for rural smallholder production, since
domestic rice will remain a major source of calories for such communities.
How to Address Financing Needs for the Procurement of Inputs: The financial sector is weak, but more
analysis is needed to understand the broader sector-level constraints as well as the liquidity constraints
specific to agriculture that, if addressed, will result in upgrading. Issues include overall liquidity, the nature of
the funding available to lend and current business strategies (target markets).

BIBLIOGRAPHY
“Africa Rice Trends—Overview of Recent Developments in the Sub-Saharan Rice Sector.” Africa Rice Center
(WARDA), 2007 (Brief).
Coalition for African Rice Development (CARD) and Japanese International Cooperation Agency’s Cooperation for Rice
Promotion in Africa- African Japanese Plenary Workshop on Sustainable Rice Production (Presentation).
“Comprehensive Food Security and Nutrition Survey (CFSNS).” Government of Liberia and the United Nations,
April 2006.
Defoer, Wopereis, Jones, Lanson, Erenstein, and Guei. “Challenges and Technical Opportunities for Rice-Based
Production Systems for Food Security and Poverty Alleviation in Sub-Saharan Africa.” Food and Agriculture
Organization Rice Conference, February 2004.
Flower, Todd. “Liberia Agricultural Markets: Production and Marketing Systems for Selected Crops in Liberia.”
Mercy Corps, May 2007.
“The Impact of High Prices on Food Security in Liberia.” Joint Assessment, Government of Liberia, July 2008.
“Liberia Core Welfare Indicator Questionnaire (CWIQ) Survey.” Liberia Institute of Statistics and Geo-Information
Services, Government of Liberia, the World Bank, and the United Nations Development Programme, 2007.
“Liberia Participatory Poverty Assessment.” Liberia Institute of Statistics and Geo-Information Services and the
United Nations Development Programme, August 2008.
Ministry of Agriculture of Liberia. “Comprehensive Assessment of the Agriculture Sector (CAAS-Lib)—Volume 1
Synthesis Report.” Liberia: Ministry of Agriculture, Government of Liberia, 2007.
Ministry of Agriculture of Liberia. “Comprehensive Assessment of the Agriculture Sector (CAAS-Lib)—Volume 2.1
Sub-sector Reports.” Liberia: Ministry of Agriculture, Government of Liberia, 2007.
Sub-sector Reports.” Liberia: Ministry of Agriculture, Government of Liberia, 2007.
Crosscutting Issues.” Liberia: Ministry of Agriculture, Government of Liberia, 2007.
Ministry of Agriculture of Liberia. “Food and Agriculture Policy and Strategy (2008-2013)—From Subsistence to
Sufficiency.” Liberia: Ministry of Agriculture, Government of Liberia, July 2008.
Ministry of Agriculture of Liberia. “Liberia National Rice Development Strategy.” Liberia: Ministry of Agriculture,
February 2009.
“Post Harvest Crop Assessment—Liberia: Rice and Cassava.” Ghana: ITTAS Consultancy Ltd, August 2008.
Tsimpo, Clarence and Quentin T. Wodon. “Rice Prices and Poverty in Liberia.” World Bank Policy Research
Working Paper No. 4742. World Bank, 2008.

ANNEX A
KEY INFORMANTS/INTERVIEWS
Greenstar Inc. Email: [email protected]

Dr. Sizi Subah, General Manager
Phoenix Complex, Claratown Ministry of Agriculture/USAID Ag Policy Project
Monrovia, Liberia (Public Sector)
+(231) 6557-104 Quan Dinh, COP, USAID Technical Assistance to
Email: [email protected] the Ministry of Agriculture
+(231) 06-657-921
Fouani Brothers Corporation Email: [email protected]
Ibrahim H. Fouani
UN Drive, Mamba Point Ministry of Commerce & Industry
Monrovia, Liberia Prof. Moses Roberts, Assistant Minister for Industry
+(231) 5660-077 P.O. Box 9041
Email: [email protected] Ashmun & Gurley Streets
Monrovia, Liberia
Fouta Corporation +(231) 6407-229
Cherif M. Abdallah, Chairman Email: [email protected]
Vai Town, Bushrod island
Monrovia, Liberia Cooperative Development Authority
+(231) 6514-079, +(231) 5514-079 G. Momoh Tulay, Registrar General
Email: [email protected] Tubman Boulevard
5th Street Sinkor
Group 7 Holding Monrovia, Liberia
J. Roosevelt Vogar, Sales Manager +(231) 6518-759, +(231) 6437-143
+(231) 6644-581 Email: [email protected]
SDTM Liberian Business Association (LIBA)

Anwar Ezedine, Managing Director D. Alvin Mccay
+(231) 6448-245 24th Street, Sinkor
Email: [email protected] Monrovia, Liberia
+(231) 662-6061
Africare Email: [email protected]
Chris Seubert, Country Representative
98 Sekou Toure Avenue Geoservices Inc. SMD
Mamba Point Pheonix Complex (Old Peugeot Garage)
Monrovia, Liberia Claratown, Monrovia, Liberia
+(077) 297-658

ANNEX B
SUPPLEMENTAL STATISTICS AND ANALYSIS
Person days
Labor Description Good practice
Traditional Good practice
w/ technology*
Upland Rice
Selection of site 1 1 1
Brushing 25 30 30
Felling of trees 10 10 10
Burning 2 2 2
Clearing 15 15 15
Sowing of seeds 12 12 12
Construction of fence 27 40 40
Weeding 15 21 5
Scaring of birds 10 30 5
Harvesting 22 25 25
Estimated Total 139 186 145
Estimated Cost @ 3 USD/person day $ 417.00 $ 558.00 $ 435.00
Swamp Rice
Selection of site 1 2 2
Brushing 15 21 21
Felling of trees 5 10 10
Burning 2 2 2
Clearing 17 20 20
Destumping 20 40 40
Construction of main drain 23 26 26
Construction of the flood way bund 18 20 20
Construction of the head dyke 9 12 12
Construction of the tail dyke 8 10 10
Construction of the peripheral bunds/canal 42 50 50
Construction of internal bunds 25 30 30
Digging 40 50 50
Leveling 18 25 25
Nursery 2 2 2
Transplanting 25 25 25
Weeding 25 25 5
Harvesting 30 40 40
Scaring bird 10 30 5

Person days
Labor Description Good practice
Traditional Good practice
w/ technology*
Maintenance of plots, dykes and drains 15 20 20
Estimated Total 350 460 415
Estimated Cost @ 3 USD/person day $ 1,050.00 $ 1,380.00 $ 1,245.00
* not mechanized
Upland per hectare Lowland per hectare

Description of Cost
Traditional Good practice Traditional Good practice
Technology per unit
Units Costs Units Costs Units Costs Units Costs
Herbicides
Sidalsate $20.00 3 $60.00 2.5 $50.00
Supraxone $20.00 3 $60.00 3 $60.00
Topextra $10.75 3 $32.24 2.5 $26.87
Estimated cost (plus
application) 0 $152.24 0 $136.87
Pesticides
Sunpyrifos $25.00 3 $75.00 2 $50.00
Endocel $25.00 3 $75.00 2 $50.00
Atali $25.00 2 $50.00 1.5 $37.50
Dusban $30.00 2 $60.00 2 $60.00
Nreko $30.00 3 $90.00 2.5 $75.00
Cymethoate $30.00 3 $90.00 2.5 $75.00
Cyren $30.00 3 $90.00 2.5 $75.00
Estimated cost (plus
application) 0 $530 0 $422.5
Fertilizer
Urea $62.69 $- 3 $188.06
TSP $45.00 $- 3 $135.00
NPK $67.16 3 $201.49 3 $201.49
Estimated cost 0 $201.49 0 $524.55
Equipment
Bird nets $20.00 0 1 $20.00 0 1 $20.00
Estimated cost 0 $20.00 0 $20.00
TOTAL
ESTIMATED
COSTS $- $903.73 $- $1,103.92

In KGs 50 kg bags
Good Good
Good Practice w/ Good Practice w/
Yields Traditional practice technology* Traditional practice technology*
Upland 900 1500 2000 18 30 40
Lowland 1200 3000 5000 24 60 100
Irrigated 4000 80
Price at
Farmgate
per KG $0.54
Good Practice w/
Traditional Good practice technology*
Upland
Description Lowland Upland Lowland Upland irrigated Lowland Upland
Income per
hectare
Income based on
.54USD per KG $644.78 $483.58 $1,611.94 $805.97 $2,149.25 $2,686.57 $1,074.63
Total Income $644.78 $483.58 $1,611.94 $805.97 $2,149.25 $2,686.57 $1,074.63
Costs per
hectare of
production
Labor $1,050.00 $417.00 $1,380.00 $558.00 $558.00 $1,245.00 $435.00
Inputs $- $- 0 0 0 $1,103.92 $903.73
Transportation
(50km*.01USD/k
m/KG) $13.43 $10.07 $33.58 $16.79 $44.78 $55.97 $22.39
Total Costs $1,063.43 $427.07 $1,413.58 $574.79 $602.78 $2,404.89 $1,361.12
Net Income $(418.66) $56.51 $198.36 $231.18 $1,546.48 $281.68 $(286.49)
* not mechanized
* Labor requirement assumptions drawn from the Committee on Food Aid ( CFA) taking into consideration valuable contributions,
suggestions and other inputs made by other Non-Governmental and non- Profitable organizations, both local and International that
has long been in the business of Agriculture in Liberia. The title of this document is “CFA Guidelines for implementing Food Support
to Local initiatives Project in Liberia”, March 4, 2005.

In KGs 50kg bags
Good Good
Good practice w/ Good practice w/
Yields Traditional practice technology* Traditional practice technology*
Upland 900 1500 2000 18 30 40
Lowland 1200 3000 5000 24 60 100
Irrigated 2500 3000 80 60
Price at
Farmgate per
KG $0.54
Description Traditional Good practice Good Practice w/ technology*

Upland Upland
Lowland Upland Lowland Upland irrigated Lowland Upland irrigated
Income per
hectare
Income based
on .54USD per
KG $644.78 $483.58 $1,611.94 $805.97 $1,343.28 $2,686.57 $1,074.63 $1,611.94
Total Income $644.78 $483.58 $1,611.94 $805.97 $1,343.28 $2,686.57 $1,074.63 $1,611.94
Costs per
hectare of
production
Labor $700.00 $278.00 $920.00 $372.00 $372.00 $830.00 $290.00 $290.00
Inputs $- $- 0 0 0 $1,103.92 $903.73 $903.73
Transportation
(50km*.01USD
/km/KG) $13.43 $10.07 $33.58 $16.79 $44.78 $55.97 $22.39 $33.58
Total Costs $713.43 $288.07 $953.58 $388.79 $416.78 $1,989.89 $1,216.12 $1,227.31
Net Income $(68.66) $195.51 $658.36 $417.18 $926.51 $696.68 $(141.49) $384.63
* not mechanized
* Labor requirement assumptions drawn from the Committee on Food Aid (CFA) taking into consideration valuable contributions,
suggestions and other inputs made by other Non-Governmental and non- Profitable organizations, both local and International that
has long been in the business of Agriculture in Liberia. The title of this document is “CFA Guidelines for implementing Food Support
to Local initiatives Project in Liberia”, March 4, 2005.

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ATTACHMENT II

GLOBAL FOOD SECURITY RESPONSE

I. INTRODUCTION TO THE RICE INDUSTRY IN LIBERIA .......................... 2

II. BUSINESS ENABLING ENVIRONMENT .......................................................... 4

III. END MARKETS ....................................................................................................... 8

IV. CHAIN ANALYSIS............................................................................................... 11

V. OPPORTUNITIES AND INCENTIVES FOR UPGRADING ....................... 19

VI. STRATEGY ............................................................................................................ 24

VII. RECOMMENDATIONS FOR USAID .............................................................. 26

VIII. TOPICS FOR FURTHER INVESTIGATION ................................................... 28

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY i

Table 2: Rice Consumption in Liberia, 2007...............................................................................................................................9

Table 3: Rice Prices; July 2009 (in US dollars)............................................................................................................................9

Table 4: Liberia Rice Imports by Product, 2001-2007........................................................................................................... 10

Table 6: Agricultural Labor Costs in Liberia, 2009 ................................................................................................................ 31

Table 7: Agricultural Input Costs in Liberia, 2009 ................................................................................................................. 32

Table 8: Profit/Loss Analysis based on$3/day Labor Assumptions, 2009 ......................................................................... 33

Table 9: Profit/Loss Analysis based on$2/day Labor Assumptions, 2009 ......................................................................... 34

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY ii

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY iii

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 1

1990 2000 2002 2004 2005-06 2006-07 2007-08

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 2

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 3

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 4

3 Butter rice is imported round grain rice from China.

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 5

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 6

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 7

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 8

Farm- Retail Market

D. MARKET TRENDS AND DEMAND

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 9

2001 2002 2003 2004

2005 2006 2007

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 10

High End Urban Market

On Farm Seed NGO Provided

Imported Rice Domestic Production

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 11

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 12

B. SYSTEMIC CONSTRAINTS IN THE VALUE CHAIN

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 13

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 14

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 15

D. SUPPORTING MARKETS NECESSARY FOR UPGRADING

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 16

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 17

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 19

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 20

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 21

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 22

D. PRODUCT AND BRANDING UPGRADING

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 23

A. VISION FOR THE VALUE CHAIN AND FOOD SECURITY

B. VALUE CHAIN COMPETITIVENESS STRATEGY

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 24

GLOBAL FOOD SECURITY RESPONSE LIBERIA RICE STUDY 25

B. STRENGTHEN THE INPUTS INDUSTRY