Agribusiness for Africa’s Prosperity. Country Case Studies
Cereal processing Cereal crops are a major component of Mali’s agricultural production: out of a total production of 6,335 tmt of cereals in 2009, rice contributed roughly one third, while maize, millet and sorghum contributed one fifth each (FAOSTAT data). Cereals are also the major component of the Mali diet. In urban areas, rice is the preferred dish (40 per cent of daily food intake), followed by sorghum and millet (together 35 per cent). In rural areas, farmers consider rice as a cash crop rather than as a food crop, whereby millet, sorghum, and fonio are the staple foods (Ember, ed. 2001). Despite some progress, Mali is not yet self-sufficient in its cereal supply: in 2008, 10 per cent of rice consumed was imported (FAOSTAT and COMTRADE data). Cereal processing is done in three stages: the first one includes the husking of rice, millet, sorghum, and of fonio, and the milling of maize and wheat. The second stage includes pre-cooking, especially of millet and sorghum. Dègué is the most important second stage product (constituting roughly one quarter of all second-stage transformed cereals), followed by couscous, monikuru, and precooked fonio (LTA/IER 2005, p. 10). Third stage transformation includes the preparation of flat bread, tacoula, didègué, and mugufara as well as liquid and semi-liquid porridges (moni, seri, tô) as ingredients for domestic cooking. Besides two larger companies, a considerable number of small enterprises operate as contract processors (customers bring grain to be milled) along with a multitude of second and third stage transformers. Nearly three quarters of Mali’s agro-alimentary businesses are cereal transformers (LTA/IER 2005, p. 10). Although wheat is not a major crop, contributing only 2 per cent to the total cereal production, it has gained some relevance due to an increased consumption in the cities. Of a total wheat flour consumption of approximately 70 tmt in 2008, one half was imported in its non-processed form, whereas one third was imported as flour (mainly from Senegal, Côte d’Ivoire, and France). Thus some untapped import substituting market potential exists. With a local producer price for wheat of $219 per mt (FAOSTAT data, 2007), an average import price of $530 per mt of wheat flour imported from Europe and of $750 for wheat flour imported from West Africa (computed from COMTRADE data, 2008), the substitution of imports of flour for locally milled wheat might allow value addition of more than $5 million p.a. and could provide employment for 550 workers. One of the main problems, however, is that due to impurities locally produced flour is considered of lesser quality compared to imported flour. Furthermore, any promotion of wheat should consider the fact that the nutritional value of white wheat flour is lower than that of unmilled indigenous grains (millet, fonio). In addition, the production of millet and fonio has a more equalizing effect on income distribution among farmers than the production of wheat, which requires relatively larger non-labour inputs. Sugar refinery Mali’s sugar production is mainly derived from sugar cane farming in the irrigated Office du Niger (ODN) zone. The annual raw sugar production is around 32 tmt, while net imports are around 106 tmt (ICSD and COMTRADE data). With an average sugar consumption of only 11 kg per year (as compared to 34 kg in the EU or even 58 kg in Brazil) there is still a large market potential. It is estimated that a 1 per cent increase in income will result in a 0.9 per cent increase in sugar consumption (Camara 2004). Presently, sugar is traded under government control, i.e. retail prices are fixed. Its import is licensed to only a few trading companies (although their number has recently been slightly enlarged). Although the UEMOA applies a Common External Tariff (CET) which, following an escalation pattern, should, in principle, be 20 per cent for consumer goods (DITS 2004, p. 12), additional tariffs are applied for sugar. The actual import duties are estimated to be 48 per cent (LQB, 06/10/2009). Given the differences between the CET and the actual tariff, smuggling of
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