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Modernization of domestic food chains in developing countries : What effects on small-scale farmers ? : The rice value chain in Senegal

Abstract : The debate about the contribution of domestic food chains to national food security in developing countries was revived by the last food price crises. In Asia, midstream enterprises implement technical changes and integrate new functions, resulting in increased added value and lower prices for consumers. The general objective of the thesis is to contribute to knowledge about the organization of domestic food value chains in Africa and their economic and social implications for small-scale farmers. It addresses three issues. First, it analyzes the organization of the rice value chain in Senegal to determine if it follows the same modernization pattern as the Asian one. Second, the thesis examines the inclusion of small-scale producers in contract farming, with a specific focus on the combination of marketing modes. Third, the thesis assesses the impacts of contracts on small-scale farmer incomes and food security. The theoretical framework is the governance of the Global Value Chain, which analyzes the influence of the driver of the quality on the distribution of tasks and skills among the actors of the chain. It is combined with the theoretical frameworks of plural forms and livelihoods to address the second issue. The case studied is the Senegal River Valley rice value chain. Data analyses are based on 154 qualitative interviews and a body of quantitative data involving over 913 actors in the value chain. Producer participation in contracts is analyzed with a multimodal logit model and the selection bias is corrected with instrumental variable and propensity score models. The first result is that modernization of the Senegalese value chain is in step with what is taking place in Asia. Nevertheless, in Senegal, (1) the benchmark situation is a spot transaction (and not a tied output-credit transaction), and processors carried out paddy collection before the modernization, (2) credit policies directly contribute to the change in governance, and (3) the modernization of the rice value chain does not make it competitive relative to imports of broken rice. The second result is that small-scale producers participate in contracts to secure agricultural financing. The segmentation of the credit market is linked to the indebtedness of small-scale producers to the national agriculture bank. Uncertainty is a second order driver towards plural forms. Besides, producers continue marketing through spot transactions which can be adapted to household needs. The third result is that the impacts of contracts on small-scale farmers are different. The marketing contract is a financial device which has no impact on agricultural practices, yields, product quality and income. It nevertheless slightly improves food security by mitigating price seasonality. The production contract has a positive impact on the income of producers who were excluded from bank credit. It nevertheless includes implicit interest and insurance costs, meaning that these producers make less profit than those financed by the bank. In order to support the modernization, policies should enhance the design of an appropriate insurance system for agricultural credit. They should also include small-scale processors in the modernization through the promotion of semi-industrial technics and the opening up of operating and equipment loans. Finally, they should fund studies about the use of small-scale mechanization.
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Guillaume Soullier. Modernization of domestic food chains in developing countries : What effects on small-scale farmers ? : The rice value chain in Senegal. Economics and Finance. Université Montpellier, 2017. English. ⟨NNT : 2017MONTD018⟩. ⟨tel-01708304⟩

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