Rice Parboiling Intervention Profile

PrOpCom (Promoting Pro-Poor Opportunities through Commodity and Service Markets) is an innovative market-driven programme funded by the United Kingdom’s Department for International Development (DFID) that aims to reduce poverty in Nigeria. The programme works with government institutions, businesses and individuals to enable agricultural markets to work better for the poor. PrOpCom started full implementation in 2008 and will be operational until December 2011.

The overall intention of the programme is to facilitate changes to market systems, to improve how markets operate, and to increase profits and revenue whilst providing benefits to the poor from these market interventions. PrOpCom facilitates and catalyses changes (by both making them possible and happen faster) through active engagement with businesses, civil society and government, in order to address problems in selected commodity sectors. The programme works along the entire value chain, as appropriate, including production, processing and marketing of agricultural products.

Using this market-led, pro-poor development approach, PrOpCom works through market forces to support the poor to:

• enhancetheirincomes• obtainaccesstojobs• gaingreateraccesstomarkets• havemorechoiceinthemarkets• usethemarkettoreducetheeconomicriskstheyface.

Parboiling interventionPrOpCom’s rice parboiling intervention aims to promote market development that is beneficial to poor people in Nigeria. Its two areas of intervention seek to improve the income of female parboilers and the quality of local rice through:

• facilitatingtheadoptionofimprovedparboilingprocessingpractices

• increasingaccesstocredittoprovideworkingcapitalforthepurchaseofpaddy.

Partners: TADCO Nigeria Ltd.; Bank of Agriculture (formerly the Nigerian Agricultural, Cooperative and Rural Development Bank or NACRDB); Standard Microfinance Bank (SMFB).

Profile of ChangeFurera Idi Garko Women Rice Processors Group Furera Idi is a parboiler in Garko village, Kano state. Like most women in Garko’s rice processing community, she used to hire out her parboiling services, earning roughly ₦1,000–1,200 (£3.90–4.70) per week.

In 2008 Furera attended a PrOpCom workshop to learn how to earn more from her parboiling work. PrOpCom helped her register with the Ministry of Commerce in the Garko Women Rice Processors Group, a women’s cooperative group. This gave her the opportunity to open a bank account with the Nigerian Agricultural, Cooperative and Rural Development Bank (NACRDB, now the Bank of Agriculture). PrOpCom also taught her group to improve parboiling and marketing techniques.

Furera applied for and received a loan for ₦50,000 (£196). Thanks to her newfound access to capital and the improved parboiling techniques Furera now earns ₦2,500–3,000 (£9.80–11.80) per week – an increase of ₦1,500–1,800 (£5.90–7.10). She has been able to quickly repay her loan and is now encouraging other group members to repay theirs, so that the group can apply for a new tranche of loans.

The additional income has also enabled Furera to buy clothes for her children, kitchen utensils, and a new parboiling metal pot. She has purchased fodder for her cow and started investing in vegetable farming. Furera boasts that she now earns more respect from her husband – so much so, in fact, that her husband’s secondwifeisalsoseekingtoobtainaloantoboostherincome.Asamajorsuccess story in the Garko Women Rice Processors Group, Furera is frequently called upon to represent the group at events and meetings about rice parboiling in Kano.

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Furera Idi is a proud new mother with more income to support her child.

Challenges facing Female Parboilers Nigerians consume 6 million tons of rice annually, and demand is growing at roughly 10% per year. The market is worth around ₦540 billion (£2.1 billion) per year, but domestic production only represents about 55% of the rice consumed in Nigeria; the rest is imported. In urban markets, 80% of consumers buy imported rice, despite preferring the fresh taste of local rice.

Why do many Nigerians favour imports over local rice? The problem is the low quality of local rice, with the process of parboiling paddy rice a key factor. Parboiling is the hydrothermal treatment of raw paddy before milling, which increases the processing efficiency and its nutritional value. 87% of the rice purchased in urban markets across Nigeria is parboiled.

Most parboiling is performed by poor people, who soak and steam the paddy in large drums and barrels. These are heated over open fires and produce poor quality rice. The paddy at the bottom, closest to the flames, can easily become overcooked, causing it to burn, discolour and break when milled. This reduces revenues and results in the loss of potential value for actors in the local value chain.

InKano,amajorhubfordomesticriceprocessingandtrading,99%ofthelocalparboilers are poor women. These women earn an average of ₦236 (roughly £1) per day by parboiling others’ paddy in exchange for a small fee. Not only are they poor,buttheirjobsaredangerous;theyareconstantlyatriskofsmokeinhalationand burns from the fire or heavy drums of boiling water.

They are also socially marginalised. It is culturally unacceptable for most Muslim women in northern Nigeria’s Hausa-speaking regions to participate in market transactions. Women rely on male family members to conduct all market-based financial transactions and to gain market information. Their lack of market access restricts them to repeating the same outdated parboiling methods and business models used by previous generations.

Strategy for Market Change Women parboilers’ meagre incomes and social limitations mean they have little encouragement to adopt new technology or improve processing quality. This further contributes to the continued poor quality of local rice.

To improve the quality of local rice available on the market, PrOpCom developed a two-pronged strategy. First, enhanced technologies were required to improve the quality of the end product for the market and to improve safety for the parboilers in their work. Second, access to finance was necessary for the female parboilers, so that they could purchase the new technology. Providing the women with loan capital also meant that they would have the financial means to purchase and resell the paddy they parboiled, rather than being restricted to only parboiling others’ paddy and receiving a minimum payment for their efforts.

PrOpCom began by conducting a baseline assessment of the various technologies available. PrOpCom then contracted TADCO Nigeria Ltd., a local fabricator, to supply improved equipment to the women. PrOpCom also supported the women’s training in the use of the technology and improved processing practices.

PrOpCom acted as a market intermediary for the women by helping them obtain credit from the Bank of Agriculture (BoA) (formerly the Nigerian Agricultural, Cooperative and Rural Development Bank or NACRDB) to purchase the new machines. PrOpCom also coordinated the women to form lending groups so that they would be eligible for the BoA’s community-lending scheme.

Lastly, PrOpCom sensitised the parboilers to the potential income gains from shifting away from fee-based parboiling to a trader model in which they buy and sell the rice they process. This included training on small business management skills, so that they would be better able to manage the loan repayments and accounting of profits.

Expected Impact

PrOpCom helped to organise 1,156 parboilers to receive training on group dynamics, activity monitoring, record-keeping and accounting, and applying for loans. Of these, 533 women from 44 groups received loans from the BoA. The total loan value amounted to ₦45.7 million (£181,000), an average of ₦85,685 (£340) per person, with a repayment period of 18 months. Repayment rates were as high as 92%.

Of the women who received a loan, 387 purchased the TADCO system and 93% of these changed from a fee business model to become active as parboiler-traders. Prior to the intervention, the women parboilers earned an average of ₦236 (roughly £1) per day in fees. But after adopting the parboiler-trader business model, their incomes increased by 363% to ₦1,091 (£4.30). Women interviewed expressed a clear preference for owning the paddy they processed over performing their work for others.

The TADCO parboiling technology itself turned out to be unpopular among the women, due to issues with the size, quality and cost of the drum. The real market-changers proved to be the motivation the women found from owning the rice they processed, and the quality-enhancing techniques they learned from PrOpCom’s training.Womenreportedan increase in job satisfactionand ricequalitydue tothese two interventions.

PrOpCom’s activities have shown that increasing women parboilers’ access to credit not only improves the local rice market, but also increases their families’ livelihoods. Using the additional income they earned from trading their parboiled rice, some women have reinvested in other income-generating assets such as sewing machines, livestock, or leasing additional farmland.

Commercial banks are now also starting to provide loans to female parboilers. Standard Microfinance Bank (SMFB) in Adamawa state asked PrOpCom for support in facilitating loans for local parboilers. By March 2011, SMFB had disbursed 115 loans across 19 local parboiler groups, totalling ₦8.5 million (£33,280).

Women clean the paddy, a practice that improves the quality of the rice.

Parboilers visit the bank branch and count the loan money they received.

Traditional parboiling, using large drums, produces low quality rice.