Liberia Rice Production Cost Analysis

Rice is the main staple food grown in Liberia, with per capita consumption averaging around 53 kilograms per year. Most domestic production is consumed by the farmers who produce it, with little surplus being sold in the markets. Liberians prefer parboiled rice, and most imported rice is also parboiled. The prolonged conflict in Liberia had a devastating impact on the agricultural sector, displacing farmers, destroying infrastructure, and disrupting the agricultural value chain. The World Food Program's (WFP) Purchase for Progress (P4P) initiative was established to provide small-scale farmers with access to reliable markets and the opportunity to sell their surplus at competitive prices. In Liberia, P4P contracted 800 metric tons of clean, parboiled rice from five cooperatives in Nimba, Bong, and Lofa Counties. A study conducted by the Borlaug Institute for International Agriculture at Texas A&M University System aimed to identify and measure the average costs of production for paddy purchased by the WFP under P4P in Liberia. The study collected data from 103 farmers, with 60% being men and 40% being women, in Nimba, Bong, and Lofa Counties during February and March 2011. The data was collected on three different paddy production systems: traditional lowland, lowland with inputs, and traditional upland. The study found that labor represents 88% of total production costs for lowland farmers and 98% of upland farmers. The most common daily-wage rate, inclusive of in-kind wages such as food, is about $3 per day. There is little use of material inputs, including fertilizer, herbicide, or pesticide, with almost 100% of all fertilizer or pesticide used by farmers being provided by the FAO or NGOs. Credit was informal and used by approximately one-third of the sample population, with interest rates varying widely but averaging about 30% per annum. Transportation costs are high due to poor and limited transport fleets, poor road networks, non-availability of electric power, and lack of storage facilities. This exacerbates problems of post-harvest loss, quality deterioration, and timely market availability. The WFP subsidizes transport of paddy rice from the farm to the cooperative due to limited accessibility of marketing support. Most farmers do not produce in excess of household consumption, causing reluctance by farmers to sell in the market. Paddy sold to the coops was reportedly in support of the coop and community, as well as in return for the provision of inputs. Farmers also sold rice for cash, often at a discount in return for prompt payment. The study recommends a three-pronged paddy sector development strategy for Liberia: introducing high-quality seed, inputs, and technical training at the farm level; building local-level infrastructure such as wells and irrigation systems, and farm-to-market roads; and creating an enabling policy environment for increased rice production. This includes protecting farmers by ensuring a fair market price for local production through market-based interventions and investing in major transport and power infrastructure.