Comparative analysis of rice milling strategies: Evidence from rice millers in Benin

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1 Vol. 9(36), pp , 4 September, 2014 DOI: /AJAR Artcle Number: BE915CE47120 ISSN X Copyrght 2014 Author(s) retan the copyrght of ths artcle Afrcan Journal of Agrcultural Research Full Length Research Paper Comparatve analyss of rce mllng strateges: Evdence from rce mllers n Benn Rose Famohe*, Alou Dagne and Vncent Flfl Afrca Rce Center (Afrca Rce), 01 BP 2031 Cotonou, Benn. Receved 19 Aprl, 2014; Accepted 18 August, 2014 Mllng and related actvtes are central to the mprovement of the qualty of locally produced rce n many Afrcan countres. Fee-based mllng and paddy buyng-mllng-sellng servces are among the strateges used n the mllng busness. The Heckman two-stage model and gross proft method were used on survey data, collected n 2011 on rce mllers n major rce-producng regons of Benn to dentfy the factors that nfluence mllers choce of strategy and determne the quantty of paddy mlled under the buyng mllng sellng strategy. Results from the frst stage of the Heckman model dentfed prevous salary actvty, utlzaton of modern technology, and trade as man actvty as factors postvely nfluencng mllers decson, whle the second stage showed that the mllng capacty and length of servce n mllng actvty as factors postvely nfluencng the quantty of paddy mlled. The average proft of mller-traders was hgher than that of mllers-only. Key words: Rce mllng actvtes, determnants of paddy purchase, Heckman two-stage model, proftablty. INTRODUCTION Snce the 2008 food-prce crss, agrcultural polcy measures n many West Afrcan countres have focused on boostng domestc rce producton. Consequently, West Afrca s annual producton of 7.7 MT s hgher than that of any other regon n Afrca (AfrcaRce, 2012). The consumpton of rce s also growng n West Afrca but rce processng s very fragmented wth no major commercal players (Bll and Melnda Gates Foundaton, 2012). Benn s Strategc Plan to Revtalze the Agrculture Sector (PSRSA, ) ncludes the development of 13 promsng sectors, ncludng that of rce because of ts soco-economc and detary mportance (NRDS, 2011). Ths has contrbuted to an ncrease n the annual growth rate of paddy producton from 12% n to 14% n (USDA, 2014). Ths sgnfcant achevement should ncrease the volume of local rce avalable n Benn s major food markets. However, because of the low local rce processng capacty n the country, t s doubtful f the qualty of such rce meets consumers expectatons. Locally produced Afrcan rce often fals to compete wth mported rce because of outdated processng technologes and ll equpped nfrastructure (Stryker, 2013; Seck et al., 2010, 2013). Most operators of rce hullers only provde mllng servces and ths practce contrbutes to the fragmentaton of the market for mlled local rce (AfrcaRce, 2011). In Benn, the harvestng, threshng, dryng and mllng of rce are generally done manually and the end product s therefore often of low qualty compared wth mported rce. However, small threshng, wnnowng and mllng equpment have been ntroduced n some areas. Two **Correspondng author. E-mal: e.famohe@cgar.org, Tel: ; Fax: Author(s) agree that ths artcle reman permanently open access under the terms of the Creatve Commons Attrbuton Lcense 4.0 Internatonal Lcense

2 2766 Afr. J. Agrc. Res. processng methods are used - drect rce mllng wthout parbolng and mllng after parbolng. Rce mllng wthout parbolng s common n the South whle mllng after parbolng s practced n the North and Central zones. Parbolng tself s of two types, namely tradtonal parbolng and mproved parbolng. Prvate mllers n some vllages use the Engelberg mll whch produces grans of acceptable qualty from parboled rce. Processng s done by both men and women but, whle women predomnantly purchase, parbol and sell rce (usually through women s assocatons), mllng s mostly done by men. As mentoned earler, rce produced n Benn s margnally less valued and attracts a lower prce than mported rce due to perceved dfferences n qualty. The low qualty of local rce s also due to the status of the rce processng sector n whch 76% of mllers use tradtonal sub-standardzed mllng plants, 21% use small and medum-szed modern mlls, and only 3% (n general the state mlls) have automated plants that produce relatvely good qualty rce (AfrcaRce and PAPA, 2011). Consequently, most of the locally processed rce contans mpurtes and mxed colors due to the use of napproprate post-harvest handlng such as post-mllng sortng, polshng and gradng. Much of ths rce s consumed n rural areas (Demont, 2013). However, the product of mlls that have key processng tools s clean and sutable for urban consumers who value convenence due to ther busy work schedules (Lançon and Davd- Benz, 2007; Famohe et al., 2013). Rce processors have a major role to play n the mprovement of the qualty of local rce and ther effcency can be consdered as key elements n the development of a new promsng local rce market. Accordng to Lançon (2003) the ssue of the qualty of locally produced rce s actually only relevant for mller-traders who have drect control over the type of paddy they process and bear the rsks of sellng a type of rce that does not respond to market demand; apart from specfc paddy parbolers, parbolng s also done by mllers who purchase paddy; most mllers n Ngera do not systematcally combne mllng wth tradng (that s, purchase paddy and sell mlled rce) but rather mll paddy for a fee (that s, mllers are servce provders). Surveys of the rce-processng sector n Benn n 2011 showed that only 9% of mllers combne mllng wth tradng, 74% of mllers are servces provders, and 9% do both. Ths stuaton rases the followng questons: () why can mllers not purchase paddy and process t to a sutable standard for sellng? () whch of these actvtes (provdng only mllng servce or purchasng paddy to mll for sale) has postve effects on mllers welfare? () whch factors determne the economc atttude of mllers and therefore the level of paddy purchased for mllng and sale? Astewel (2010) dentfed educaton level of the head of household and the quantty of rce produced as mportant varables that determne the volume of rce sold n the market by rce farmers. In contrast, the objectve of Ngeran rce mllers/traders s beyond maxmzng the volume of rce processed; rather t s to generate addtonal ncome by addng marketng value to the product (Lancon, 2003). Through fnancal analyss Darra (1994) showed that the buy mll sell actvty s far more proftable than the provson of mllng servce. The many studes on rce post-harvest processng n Afrca (Darra, 1994; Lançon, 2003; Shwetha et al., 2010; Astewel, 2010) have gnored the factors that determne whether mllers purchase paddy or not. Ths study assessed the factors that could explan the economc behavor of mllers faced wth the alternatve strateges, and the quantty of paddy mlled by those who adopt the buy mll sell strategy. THEORETICAL FRAMEWORKS Both descrptve methods and econometrcs technques were used. MCA provded an exploratory vew of factors whch explan how the rce mllng sector n selected regons of Benn functon. The Heckman two-stage model was then appled to determne the factors that nfluence mllers decson to buy mll sell and determne the quantty of paddy mlled by mller-traders. Fnally, profts of both categores of mllng actvtes were calculated and compared. Multple correspondence analyses MCA s a potentally useful exploratory data analyss technque for the dentfcaton of stable patterns n the data (Kacak and Louvere, 1990). Ths technque was used to dentfy categores of mllers that have smlar characterstcs n terms of crtera lsted n Table 2. Normally, t conssts of representng ndvduals or ponts (here mllers or processng unts) n a multdmensonal space n such a way as to get an overvew of the relatve postons of ndvduals. However, t s dffcult to observe ponts n a space wth more than three dmensons. Therefore, MCA was used to reduce multdmensonal space n a 3 orthogonal axes also termed as factors whch maxmze the nformaton content (nerta). These axes defne 2 2 factoral planes and are assocated wth egenvalues. The egenvalues are defned as the dfference between the total number of modaltes (K) of the varables and the total number of varables (Q) themselves dvded by the total number of varables, [(K Q)/Q]. Each modalty of varables that characterze the economc behavor of mllers s represented by a pont. On the factor plane n the MCA ponts (projected ponts) that mages of each other represent ndvduals that have smlar or the same characterstcs. Some crtera such as contrbuton of a modalty to the total nerta borne by an

3 Famohe et al Table 1. Descrpton of varables used for the MCA. Type of varable Varable Defnton of varable Hgender Gender of processng unt s head EL Educaton level SA Secondary actvty PA Prevous actvty Techmach Mllng machne technology Actve varables Modern machne Usng modern machne as technology Ordnary machne Usng ordnary machne as technology CatC Category of customers CC Exstence of contract wth customers TCC Type of contract wth customer SF Source of fnancng LS Length of servce Illustratve varables PrAssM Beng member of processor assocaton reasonmrt Reason for mllng rce Contnuous llustratve varables Capacty Mllng machne capacty axs (absolute contrbuton), good poston of a modalty on an axs (relatve contrbuton) and approprate modaltes to use for the smlarty nterpretaton of ndvduals on a gven graphcal dsplay (test-value) are necessary. For nstance, the hgher the test-value of a modalty on an axs, the more useful ths modalty s for nterpretng that axs. Varables used n the MCA analyss are descrbed n Table 1. Heckman two-stage model The mcro-data for the quantty of paddy purchased and processed are avalable for only some mllers snce not all of them purchase paddy. Thus, we have zero quantty of paddy purchased for some mllers. Ths stuaton created an econometrc problem known n the lterature as sample selecton bas as specfcaton error (Heckman, 1979). To resolve ths problem, we used Heckman s two-stage procedure. Ths procedure s appled when the data used are censored (Green, 2005). Accordng to Gujarat (2003, pp ) a sample n whch nformaton on the regressand s avalable only for some observatons s known as a censored sample. Ths technque s approprate because n ths study we are not only nterested n knowng factors that determne the economc atttude of mllers, but also the level of paddy purchased and mlled. If only the probablty of a mller purchasng or not purchasng paddy were to be analyzed, Probt or Logt models would be adequate. Snce we are nterested n both objectves, there s a need for a model that s a hybrd between the Logt or Probt and ordnary least squares (OLS). Sample selecton bas may arse n practce for two reasons: () there may be self-selecton by an ndvdual or data unts beng nvestgated; () sample selecton decsons by analysts or data processors operate n much the same fashon as self-selecton (Heckman, 1979). Ths method can also be used to address the ssue of endogenety. In that case, the endogenety s supported by the presence of sample selecton bas (Manuel, 2010). For ths study, ths model was chosen due to mssng data for the regressand (quantty of purchased paddy). The Heckman method conssts of a two-step estmatng procedure. In the frst stage, a selecton equaton attempts to capture factors affectng mllers decson on the purchase of paddy. The second stage provdes heckt analyss that determnes the quantty of paddy purchased and mlled. The probablty of mllers purchasng paddy was modeled by the Maxmum Lkelhood Probt, from whch the nverse Mll s rato was estmated. Its specfcaton s as follows: The selecton equaton Y Y X where Y s a bnary varable that assumes 1 f rceprocessng unty () purchases paddy and 0 otherwse; s the vector of unknown parameters to be estmated; * 1 f, y 0 f, y * 0 O X the vector of explanatory varables that determne whether paddy s purchased or not; s the random error terms that are assumed to be ndependently and (1) (2)

4 2768 Afr. J. Agrc. Res. Table 2. Descrpton of varables used n the model. Varable Type of varable Descrpton Frst stage: Selecton equaton Paddy purchase Endogenous A varable that stands for rce mllers decson status as to whether they purchase paddy or not. Prevous salary actvty Exogenous A dummy varable takng 1 f the mller had a prevous salary actvty and 0 otherwse. Modern technology Exogenous A dummy varable takng 1 f a modern mllng machne s used and 0 otherwse. Trade as man actvty Exogenous A dummy varable takng 1f the mller s man actvty s tradng and 0 otherwse. Second stage: Regresson equaton Quantty of purchased paddy mlled Endogenous A contnuous varable that stands for the quantty of purchased paddy mlled per day. Machne capacty Exogenous A contnuous varable that stands for the quantty of paddy a machne can mll per hour. Length of servce Exogenous A contnuous varable that stands for the number of years the mller has spent so far n the actvty. Modern technology Exogenous A dummy varable takng 1 f a modern mllng machne s used and 0 otherwse. normally dstrbuted wth zero mean and constant varance; and y * s the latent varable whch s observed. The regresson equaton (OLS) Q z (3) whereq s the purchased paddy mlled; z the vector of explanatory varables whch determne the quantty of paddy purchased and mlled; the vector of unknown parameters to be estmated and the error term wth the assumptons that: N(0, ) N(0,1) corr(, ) 2 2 or (, ) N (0,0,,, ). and are normally Both error terms dstrbuted wth mean 0, varances as ndcated and the error terms are correlated where ndcates the correlaton coeffcent. The term lambda ( ), whch s related to the condtonal probablty that a rce-processng unt wll decde to purchase paddy (gven a set of ndependent varables) s determned by the followng formula: ( X ) [ ( X ) / 1 ( X ) ] where and are the probablty densty functon and the cumulatve dstrbuton functon of the dstrbuton, respectvely, and s a vector of unknown parameters that contans the correlaton coeffcent. It s worth notng that rho () s the parameter that helps detect whether there s selecton bas. For nstance, f rho s statstcally dfferent from 0, there s selecton bas and the two-stage model s relevant. Where rho s not statstcally dfferent from 0, OLS technques wll be approprate. Proft calculaton of mllng actvtes We used the gross proft method to compute the proftablty of rce mllng for both categores of mllers. The usual gross proft (GP) formula s specfed as follows: GP V C PQ pq n where P s the prce of the mlled rce sold, Q the total quantty of mlled rce sold, of nput and p the prce q the quantty of nput. In the model, cost varables nclude repar and mantenance and deprecaton costs (DC) of materal (mlls) whch s specfed as follows 1 : DC (ntal cost)-(salvage cost) Machne lfe 1 Costs that are common for both types of actvtes nclude expenses on electrcty, repars, mantenance and labor.

5 Famohe et al Table 3. Regonal dstrbuton of surveyed mllers. Regon Frequency Percentage (%) Northwest Northeast Central South Total The calculaton of the value of producton (V) and the cost of producton (C) for each category of mller dffered. For the mller-traders, the value of producton was the market prce per kg of mlled rce multpled by the quantty of mlled rce. Also, costs ncurred by the mllertraders took nto account the value of paddy purchased (that s, quantty of paddy multpled by the prce per kg of paddy). On the other hand, the value of producton for custom-mllers was the fee per kg of mllng servce multpled by the quantty of rce mlled. DESCRIPTIVE ANALYSIS OF SURVEYED DATA Data collecton The data used n ths study came from a survey conducted n 2011 across 16 communes n Benn by the natonal agrcultural research system (Insttut Natonal des Recherches Agrcoles du Benn, INRAB) and the natonal agrcultural statstcs systems (NASS) n collaboraton wth the Afrca Rce Center. Ths survey covered all actors across the rce value chan farmers, consumers, traders and processors (mllers and parbolers). In ths study, we used only data that are relevant to rce mllers snce our goal was to nvestgate the factors that could explan the economc behavor of mllers faced wth alternatve types of actvtes n Benn. The survey used the same standard questonnare and the stratfed two-stage samplng method adopted by partcpatng member states of AfrcaRce. In the frst stage, eght vllages and per-urban areas were purposvely selected to ensure a good representaton of the major rce processng zones wth ntensve mllng actvtes. In the second stage, 90 processors were selected randomly n each vllage and Per-urban area. However, because there are few mllers n Benn, almost all of them were surveyed n each vllage and Per-urban area and only 34 respondents were found. They fall nto the dfferent categores of small, medum and large-scale. Informaton collected wth the structured questonnare ncluded detaled personal nformaton of mllers, sources of paddy procured, mllng practces, mllng costs, equpment, constrants, labor demand, labor sklls, mllng capacty, prces of local paddy and mlled rce, energy sources, processng losses, and capacty utlzaton of the processng facltes. The geographcal dstrbuton of the surveyed mllers s presented n Table 3. Descrpton of assocated characterstcs of surveyed populaton Table 4 shows the soco-demographc characterstcs of the surveyed mllers. Of the 34 respondents, 82% were mllers-only and 18% mller-traders; 94% were males and 6% females. Mllers-only comprsed 96% males and 4% females, compared to 83% males and 17% females among the mller-traders. Ths shows that the mllng busness n Benn s domnated by men. Both groups of mllers were young wth an average age of 28 to 50 years. More than 44% of mllers n both categores were educated (4% of the mllers-only group attended hgh school) whle more than 40% were not educated. In addton, 33% of mller-traders used modern mlls as aganst 14% n the mllers-only group. The old types of mll were largely used by most mllers n the two groups. The remanng varables were dstrbuted moreor-less equally. MAP OF MCA, ESTIMATED RESULTS FROM ECONOMETRICAL ANALYSIS AND PROFIT COMPUTATION Map of rce mllers The map of mllers wth ther respectve characterstcs s shown n Fgure 1. The frst factor axs explans 11.34% of the total varance, whle the second axs explans 10.19%. The two factor axes explan a total of 21.53%. In the factor plane, the frst axs s determned by the varable named contract wth customers who have two modaltes (contract wth customers and no contract wth customers). In the postve value s the modalty contract wth customers, (contrbuton=15.1, test-value=4.3, and dstance=1.83) whle n the negatve value s the modalty no contract wth customers (contrbuton=8.2, testvalue= 4.8, and dstance=0.55). The second axs s determned by the varable fundng source wth two modaltes (self-fnancng and donaton/support). In the

6 2770 Afr. J. Agrc. Res. Table 4. Soco-demographc characterstcs of surveyed mllers n Benn. Mllers-only Mller-traders Gender % % Male Female 4 17 Age of the owner > Educaton Prmary Secondary 4 17 Hgher 4 0 No level Others Source of fnancng Donaton/support Self-fnancng Length of servce <10 years >10 years Processors assocaton members Member Non-member Prevous actvty General trade Agrculture Handcrafts Salared work 4 0 Workman 4 0 Others Technology used Modern technology Ordnary technology Mllers' Customers Category Assocaton/group 0 17 Consumers 4 0 Enterprses Producers Publc Insttuton 0 0 Contract wth customers Yes No Type of contract wth customers In-knd payment Prce dscount 45 0 Short-term credt 18 0 Others 9 0 postve value s modalty self-fnancng (contrbuton=7.2, test-value= 0.4, and dstance=0.55) whle n the negatve value s the modalty donaton/support (contrbuton=13.3, test-value=0.4, and dstance=0.83).

7 Famohe et al Fgure 1. Map of rce mllers wth ther dstnctve characterstcs. The map reveals two man subgroups - mller-traders led by the modalty no contract wth customers and mllersonly led by the modalty contract wth customers. Mllers n the frst subgroup are mller-traders, have less than 10 years of servce (LS<10), do not belong to a processors assocaton (PrAssM/no), practce farmng as a secondary actvty (SA/farmng), had salary servce as a prevous actvty (PA/salary servce), use more modern machnery, and have at least prmary school educaton. The second subgroup comprses mllers mll paddy as a fee-based servce (Mllers-only), belong to a processors assocaton (PrAssM/yes), have more than 10 years of servce (LS>10), mll as a secondary actvty (SA/mllng), have general tradng as a prevous actvty (PA/general trade), and use more old-fashoned machnery. Members of the second group often make short-term credt and nknd payment contracts wth ther customers. The exploratory analyss dentfed prevous salary actvty, the use of modern technology, length of servce and trade as man actvty as factors that are lkely assocated wth the decson to purchase paddy or not. These results hghlghted the smlarty between the varables mller-traders (equvalent to purchase paddy) or mllers-only (equvalent to not purchase paddy) and other characterstcs of mllers, such as the use of modern technology, prevous salary actvty, length of servce, and trade as man actvty. Ths apparent relatonshp between these varables s deepened by the econometrcal analyss. Results of the Heckman two-stage model Table 5 presents results from the use of the Heckman two-stage model. Ths model explans factors that nfluence both the economc behavor of mllers and the quantty of purchased paddy mlled by them. The results show that the model s globally sgnfcant (P<0.01) and a rho fgure that ndcates whether there s statstcally sgnfcant selecton bas. The sgnfcance of rho confrms the approprateness of the use of the Heckman two-stage model. On one hand, n the selecton equaton, the varables prevous salary actvty, modern technology and trade as man actvty are statstcally and postvely sgnfcant (P<0.01). The sgnfcance of the prevous salary actvty suggests that mllers who were prevously n salared employment had bought ther mlls usng money they had saved. Ths s confrmed by the fact that on the MCA map, mller-traders bought mlls by ther own means. The sgnfcance of modern technology may be related to the fact that ths technology s more used by mller-traders snce they are the ones that purchased paddy. As for the varable trade as man actvty, ts sgnfcance can mean that mllers that have tradng as ther man actvty are more lkely to purchase paddy and mll t for sale. Because paddy producton s a seasonal actvty, they dversfy ther actvtes by combnng mllng wth tradng. In Ngera, 41% of all the mllers closed ther workshop for an average of three months because they were mllers-only (Lançon, 2003). Ths fact hghlghts the

8 2772 Afr. J. Agrc. Res. Table 5. Estmates from the Heckman two-stage model. Selecton equaton Exogenous varable Paddy purchase coeffcents Margnal effects Prevous salary actvty 7.240*** (0.597) 1.689***(0.171) Modern technology ***(0.540) 1.623***(0.159) Trade as man actvty 7.359***(0.591) 0.170***(1.717) Constant 0.108(0.284) Regresson equaton Exogenous varables Quantty of purchased paddy mlled Machne capacty 0.297*** (0.014) Length of servce 2.644*** (0.637) Modern technology ( ) Constant (933.55) rho 0.392*(0.238) Sgma 0.392***(0.238) Lambda ***( ) Wald ch-squared (4) Prob. > ch-squared 0.00 Log lkelhood (rho = 0): ch-squared(1) 2.72 Number of observatons 34 Standard errors n parentheses; *** P<0.01, ** P<0.05, * P<0.10. dfference between the two categores of mllers. On the other hand, the regresson equaton showed that the varables machne capacty and length of servce n the mllng busness sgnfcantly and postvely nfluence the quantty of paddy purchased and mlled, whle modern technology was not statstcally sgnfcant. The sgnfcance of machne capacty means that the greater the capacty of a machne, the greater the quantty t mlls when paddy s avalable. The sgnfcance of length of servce could mean that over tme, mllers gan experence and acqure more skll and therefore ther actvty yelds more. However, ths s not corroborated by the MCA map, whch ndcates that length of servce s assocated wth mllers-only and s supposed to negatvely nfluence the quantty of paddy purchased and mlled snce mllers-only do not purchase paddy. Ths dsparty can be explaned by the fact that mller-traders are manly those who entered the sector after lberalzaton, the length of servce beng more assocated wth mllers-only (cooperatve and publc mllng unts whch were establshed a long tme ago) than mllertraders (more prvate sector operators who are newcomers to the sector). The non-sgnfcance of modern technology may be due to the fact that the dfference between modern technology and ordnary technology does not le n the quantty of paddy a machne can mll, but rather on the qualty of the rce t produces. The estmated proft ndcates the relatve proftablty of the two categores of mllng actvtes and could be used by rce sector-orented polcy makers to offer fnancal-based advce. Computaton of proft Table 6 shows the proft calculated for both types of mllers, that s, those who purchase paddy (mller-traders) and those who do not (mllers-only). The table descrbes the operatng accounts of the two types of mllng busness as a smplfed balance sheet provdng each major cost tem and source of revenue as well as the proft for each type of actvty. The average proft for mller-traders for 1 kg was FCFA compared wth FCFA for mllers-only. Thus, mllng was more proftable for mller-traders than for mllers-only, others thngs beng constant. It should be noted, however, that the proft of mller-traders s nfluenced by fluctuatons n the prce of paddy and mlled rce snce these mllers are also nvolved n marketng. Conclusons Due to the napproprate post-harvest technques (threshng, dryng, parbolng, and mllng) used by processors, the qualty of locally produced rce remans

9 Famohe et al Table 6. Operatng accounts. Processor Item Mller-traders Mllers-only Quantty of parboled rce (kg) (a) 11,600 41, Quantty of non-parboled rce (kg) (b) 62,080 49, Total quantty (A = a+b) 73,680 91, Prce of parboled rce (FCFA kg 1 ) (c) NA Prce of non-parboled rce (FCFA kg 1 ) (d) NA Mllng fee (FCFA kg 1 ) (e) NA 20 Total value for mller-traders [B=(ac+bd)] 25,429,807.3 Total value for mllers-only [B=(ae+be)] 1,826,377.2 Deprecaton costs (FCFA) (f) 5, , Repar and mantenance costs (FCFA) (g) 181, , Expendture on purchasng paddy (FCFA) (h) 22,220,868.8 NA Total cost (f+g+h) (C) 22,407, , Gross proft (total) (D =B C) 2,613,077 1,459,262 Gross proft per kg (FCFA kg 1 ) (E =D/A) far below that expected by urban consumers. Processors thus have a major role to play n mprovng the qualty of locally produced rce. Ths study assessed the factors that can explan the economc behavor of mllers faced wth the alternatve types of actvtes - provdng only mllng servce for a fee (mllers-only) and purchasng rce paddy and mllng t for sale (mller-traders). Ths was done by usng multple correspondng analyss (MCA) and the Heckman two-stage model. Whereas MCA facltated the categorzaton of mllers wth the same characterstcs, the Heckman two-stage model hghlghted not only factors that nfluence mllers decson to purchase paddy or not, but also factors that nfluence the quantty of purchased paddy mlled. The MCA showed two subgroups of mllers. Most of the mller-traders procured ther mlls wth ther own means; they are often not members of a processors assocaton; most of them have worked less than 10 years n the mllng sector; they were prevously n salared employment, and some of them buy paddy and process t for sale. Most of the mllers-only got ther mlls through support or donaton; they are often members of a processors assocaton; do not purchase paddy to mll but process paddy for others for a fee (farmers, traders or consumers); most of them have spent more than 10 years n the sector and were prevously nvolved n farmng and handcrafts. The Heckman two-stage model showed that prevous salary actvty, modern technology and trade as the man actvty are lkely to nfluence the decson of mllers. It also showed that factors such as machne capacty and length of servce nfluenced the quantty of purchased paddy mlled. The average proft of mller-traders (35.46 FCFA kg 1 ) s hgher than that of mllers-only (15.98 FCFA kg 1 ). These fndngs ndcate that processors gan experence and acqure more skll over tme. It s therefore, necessary to organze perodc tranng of processors, especally the newcomers. Polcy should create an enablng envronment by ensurng easy access to captal to facltate nvestment n mproved technologes by processors. Such polcy could ncrease the number of mller-traders whch s currently low. Mllers also need a fnancal ncentve to encourage them to purchase paddy. The expected outcome of ths polcy wll be an ncrease n the use of modern mlls that wll produce good-qualty rce as requred by consumers. Conflcts of Interests The authors have not declared any conflct of nterests REFERENCES AfrcaRce (2011). Lessons from the Rce Crss: Polces for Food Securty n Afrca. Afrca Rce Center, Cotonou, Benn. AfrcaRce (2012). Afrca Rce Trends Afrca Rce Center, Cotonou, Benn. AfrcaRce PAPA (2011). Post-récolte du rz et préférences des consommateurs pour le rz au Bénn. Rapport de projet. Afrca Rce Center, Cotonou, Benn. Astewel T (2010). Analyss of rce proftablty and marketng chan: the case of Fogera Woreda, South Gondar Zone, Amhara Natonal Regonal State, Ethopa. MSc Thess, College of Agrculture Department of Agrcultural Economcs Haramaya Unversty. Bll and Melnda Gates Foundaton (2012). Developng the rce ndustry n Afrca, Ghana assessment. Demont M (2013). Reversng urban bas n Afrcan rce markets: a revew of 19 natonal rce development strateges. Global Food Securty (In press). Darra SB (1994). The role of small rce mlls n the rce subsector of the offce du Nger, Mal. MSc Thess, Department of Agrcultural

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