Millet Food Processors in Burkina Faso Millet Food Processing #2.Submitted to the Gates Foundation. IPIM Contract April 25, 2015 Introduction: As with Mali the objective of this country report is to estimate the present and the potential impact that this sector can have on the demand for millet. To get there we will first summarize the present state of this sector and then consider the progress of an important determinant of the growth of the millet processor sector, the increasing availability of clean millet. Then we will look at the present market structure and how we expect it to evolve to become more efficient. More efficient firms and improved market structures can lead to cost and price decreases. These price declines can enable a market expansion and shift the demand for millet, which will increase farmers incomes. This market expansion would substantially increase the consumption of millet food products by low and medium income consumers. Presently, consumption is concentrated among high income consumers and for special occasions. Low and middle income consumers will also be beneficiaries of these price reductions and qualitative improvements. The Processor Sector Burkina millet processing firms are mainly small of the neighborhood variety discussed in the Mali report though infant food has also become important (Table A-1). The concept of the importance of quality (clean millet and hygiene) is widespread and this comes from both the CTA (Center of Food Technology) and Afrique Verte (a French supported NGO). Afrique Verte performs a series of very useful services for the farmers associations and processors (see Box next page). The importance of the locally produced infant food reflects both the improved quality control of the firms and the increased confidence of consumers in these firms. Note that these firms are in competition with the more expensive but quality assured international brands such as Nestle. Approximately half the food processors interviewed obtained their millet from the OPs (Organization of Producers or Farmers Associations). The other half used merchants especially collectors (Table A-1). Collectors are very important when there are only small quantities at each collection point. Moreover, the millet food processors as in Mali reported that many of the merchants had become oriented to obtain cleaner millet for them. So there is a response in the marketing chain to this demand from the processors for cleaner millet. However, with the failure to introduce technological change in the farm sector there are smaller marketed surpluses from farmers than in Mali so the price spread between clean and dirty millet is larger between clean and dirty millet. The same products with different names than in Mali are the principal products of the millet processing firms: Grumeaux=Monikuru; Degue=Tiakry (see Appendix A-2). Specialization is very similar with one or the other of these two products being at least half of the value of production by sales and the two of then reaching 70 to 80%. These small firms are getting substantial technical help and machinery from various donors. They will need increased millet supplies and then for the industry to begin evolving cost cutting firms as models for the domestic market. 1
The level of exports is much less than in Mali. This is attributed to the lack of adequate supplies of clean millet making it more difficult for them to compete with the Malian exporters and the smaller diaspora of Burkinabe in Europe and the US than of Malians. In the Malian report we indicated the difficulty of expanding rapidly the domestic market unless prices were decreased and indicated a series of cost reductions that firms could pursue to help them reduce prices of their flour and other finished products. As support for the assertion that the neighborhood processors were principally selling to the middle to higher income consumers and for special occasions we cited the merchants in Mali who mentioned the importance of advance domestic orders. In Burkina we asked more specifically for this information and found that advance domestic sales ranged from 10 to 30% of the value of sales (Table A-1). Competition for the Millet Processors: There are two sources of competition for the millet processors. First millet products have to compete with other cereals and secondly they have to compete with consumers buying the unprocessed millet and making the processed products themselves. The lowest cost cereal staple is the broken rice at 300 cfa/kg. All millet products begin with the flour including the basic dishes of most of the population, to, a thick porridge 1, and bouillie, a breakfast cereal. The neighborhood processors are starting with a cleaner millet but their product is still very expensive compared with rice. Moreover, the main products sold by millet processors require further processing of the flour and are even more expensive (Figure 1). Hence, the processors market to higher income consumers and occasional sales as for holidays especially Ramadan. Also these high costs help explain why there has been the slow evolution of the sector. Support services of Afrique Verte to farmers, farmers associations and processors 1.furnish improved seeds to farmers associations 2. tarps for keeping cereals of the ground 3.training in production techniques including post harvest 4. cereal exchanges- buyers and sellers 5, combination of machines in central location for villagesthreshers, cleaners 6. technical advice and monitoring at the village level. 7. for processors-hygiene 8. for farmers associations management training 9. access to credit-micro credit organizations 1 With the much lower maize price than that of millet this to is often made with maize flour. 2
Figure 1. Prices for broken rice and the principal millet products of the millet processor in Burkina Faso Retail prices in F CFA/kg 1400 1200 1000 800 600 400 300 750 1020 1073 1126 1266 200 0 Millet processors also have to compete with the households buying the raw millet. Households can buy and process (dehull and mill) millet into flour for about the same price as the broken rice. Again with the comparison to the 750 cfa/kg of flour sold by the processors it is clear why there are few purchases of millet products by low and medium income consumers. 3
Prices in F CFA/Kg 1200 1000 1000 800 750 600 Millet Purchase 400 200 260 217 299 252 Cost for flour Retail price millet flour Retail price millet couscous 0 Firms Housewife Purchase Figure 2. Burkina Millet Processors Prices Competing with Household Buying the Raw Millet and Processing Themselves So for the processors to be competitive and increase sales and the importance of this sector to the economy they can follow the Mali strategy of increasing the availability of the clean millet. This will then enable them to make a second cost reducing activity of reforming the market structure. With greater access to clean millet some processors in Mali have already reduced the flour price by 30%, which would be 535 cfa/kg here. We estimated that with market reform another 30% reduction to 375 cfa/kg would also be possible. At this price the higher quality flour 2 and products of the millet processors would be much more attractive to urban consumers. So in the next two sections we consider the availability of clean millet and reforms in the marketing structure made possible with an increased clean millet supply. Availability of Clean Millet In Mali millet food processors were able to obtain clean millet directly from the village farmers associations. In Burkina Faso there was less production so farmers and farmers associations had less millet to sell. So the collectors had an important role in aggregating sufficient quantities of clean millet for the processors. We asked about the price premium processors were willing to pay for clean millet and got widely varying answers. If we compare the price the processors had to pay to get clean millet with the 2 The processors buy a cleaner millet than is available at this price in the retail urban market. Moreover, we are assuming that in the future milling would be done with hammer mills rather than disk mills reducing or eliminating the metal residues in the cereals. 4
price in the villages for ordinary millet (Figure 3), we get a price premium similar to 250 Figure 3. Prices of clean and dirty millet during 2014 in Burkina Faso 200 217 236 Purchase price CFA F/Kg 150 100 187 150 167 185 Poducers Processors 50 0 Harvest 0 price Price 40months Price 80months after harvest after harvest Source: Field survey taken from 17 observations In Ouagadougou. For the observations eight months after harvest there were only 7 observations the price processors had to pay for quality ranging from 37cfa/kg at harvest to 50 cfa/kg four months later and 51 cfa/kg eight months later. The clean millet price premium was then substantially higher than the 15 to 25 cfa/kg paid by processors in the Segou region of Mali, who bought clean millet from farmers associations, With these differences in the prices of clean millet it is not surprising that the prices of the products of the processors remain much higher than in Mali. Hence, the sector is not expanding from the neighborhood processor level. The millet processing sector is much smaller and less developed than in Mali. The enterprises are almost entirely of the local neighborhood variety (see #1 Millet Food Processing). The concept of clean seed is known in the farmers associations and by the processors. However, it is much more expensive for the millet food processors to obtain clean millet than in Mali. The principal hypothesis for the difference is the failure to introduce new millet technologies in the principal production zones of millet in Burkina in contrast with the rapid introduction of this technology in the principal millet production zones of Mali, the Segou and Mopti regions. 3 Without an increased 3 In Mali an intermediate height millet was combined with two to three sacks of inorganic fertilizer to obtain yields 400 to 600 kg/ha higher than local cultivars. This was combined with various marketing techniques of the farmers associations. These included storage and later sales, selling in larger quantities to later stages of the marketing do not give an increased marketed surplus. 5
Figure 2. Current millet market structure with collectors playing a key role in aggregating larger quantities Consumers Retailers Processor gets her supply mainly from regional merchants and farmers organizations Wholeseller in Ouaga receives his cereals from the collectors and regional merchants Regional merchants are supplied by the collectors or farmers associations located in the millet growing region Collectors going around to the farmers, village markets and farmers associations to buy clean millet Small or no storage capacity. Sometimes retailers even do this Farmers Association. Afrique Verte support to produce and screen for cleaner millet. Cleaning equipmentthreshers Farmers. Low yielding local cultivars grown by farmers.. Low productivity leading to small surpluses to be marketed marketed surplus there is little incentive to simplify the chain.hence, prices remain higher for the raw material and for the finished products. Improvements in the agricultural technology are expected to drive the changes in the marketing and processing sectors. 6
Thus the failure to increase farm level productivity results in a more elaborate market structure with a greater dependence upon collectors to search for and aggregate small quantities of clean millet (Figure 2). Farmers organizations aggregating sufficient quantities of clean millet can sell directly to the processors. But both farm organizations (some exceptions) and processors were reported to have little investment in storage facilities compared with Mali. Some of the retail merchants even became collectors going to the village markets during the year as farmers sell small quantities. 4 The upper part of Figure 2 of consumers illustrates the choice of buying from retailers the dirty grains and processing them in the neighborhood or purchasing the cleaner more finished millet products from the neighborhood merchant. Unfortunately, in the neighborhoods the disk mills add the metal residue. The neighborhood consumers can opt for the cleaner millet of the neighborhood processors but neighborhood processors also use the same disk mills. As processors obtain more and cheaper millet some will shift to more efficient milling equipment, which do not leave the metal residues. One large food processor has begun specializing in producing maize flour with a hammer mill and he promises to begin producing millet flour on a large scale for bakeries and school feeding programs.he could provide the same role of cost reducing processor as is being performed by several in Mali Figure 3 shows the emerging market structure with increasing farm level productivity. With technology introduction farmers have more to sell and famers associations obtain more clean grain from them. Farmers Associations can also do some of the cleaning with cleaning machines or just screens. Then the Farmers Associations can sell the clean grain directly to the processors or wholesalers for the premium price. Or the wholesalers can engage in larger cleaning operations as is being done in Mali. Note that in this market evolution case the role of the collector is taken over by the farmers associations (Figure 3). The big change will be when some of the neighborhood processors become lower cost processors. Then they can sell this higher quality flour as it will be from clean grain. At this point the neighborhood customers will have access to millet flour from 350 to 400 cfa/kg of flour. This flour will be cleaner and without metal residues as it will be milled with hammer mills. The cost reduction and the quality of the flour and the other products made from it will increase the substitution of the neighborhood processors products for the home made products of the women from the dirty millet. Many lower and middle class women can shift from previously buying the unprocessed millet and having it dehulled and milled in the neighborhood to the processors products. These are cleaner without metal debris and can be elaborated into final products of grameau (monikuru) and degue (tiakry) or sold as flour. The new sector of lower cost processors will need to invest in the better mills and to get their costs down. But in the earlier analysis for Mali we have shown that some processors are already reducing their costs by 30% with access to increased supplies of clean millet and we estimated that with market reform another 30% price decrease would be possible. 4 Farmers use their stored millet and sorghum as a checking account taking small quantities to local markets to exchange in order to finance the household purchases. 7
Figure 3. Future improved millet market structure with strong farmers association producing large quantities of clean millet grain. Consumer.Final quality Processed Products Processor. Contract for large quantities of clean millet Wholeseller with large storage capacity. Dirty millet is cleaned before being stored and sold. Regular supply from wholeseller or farmers association Farmers Association:. Increased production with high yielding cultivar. Large surpluses of clean grain marketed Farmers: Produce clean grain:. Increased association bargaining power. Improvements possible: thresher, tarps, PICs bags Millet Consumption in the Neighborhoods Are there a series of products that low and medium income consumers are already consuming occasionally? So here we review the millet consumption patterns in the neighborhoods for three income classes. Rather than going into a full consumer survey we interviewed the millet processors about consumption patterns in their neighborhoods. They should know present consumption trends because their sales depend upon this. The low income sector eats millet products 1 to 3 times per day. But it was estimated that only one-half of the low income households in the sample could buy these processed products (Table 1). There are also a range of other products made from millet that people eat occasionally. So this occasional consumption of other millet products and the preferences that people have for the 8
processed products, such as various kinds of grameaux, degue and couscous, indicates a strong potential demand if their prices are lowered and with economic growth. Table 1. Consumption of Millet Products in the Neighborhoods of Burkina Faso No. (Refer ence No.) 1. (3) Principal Products G, D,C,F, Gnou No. of times per day consume products of the neighborhood processor Low Income 1 2 (4) G,D,F,C Low Income 1 3 (6) G,D,C Low Income 3 (7) G,D Low Income / 1 to 2 days High Income 4 (8) G, D,C Low Income High Income 5 (9) G, D,C, B Low Income Medium Income 2 High Income 2 6 (10) Dehulled millet; G, B Low Income 1 7 (11) D,G,C Low Income 1 8 (13) F, Zoomkom Low Income 2 Medium Income 2 High Income 2 9 (15) G, D,B Low Income 2 Medium Income 2 High Income No. of times/day consume millet products bouille and to a 3 1 1/week 3 2 1 2 to 3/day (to) 1/day (to) 2 to 3/week 3/ day 2 to 3/week 2 to 3/week Bouillie 1/day 2 to 3/week 1/week 2to 3/day 2/day 1/day 2/ day 2/day 1/week 3/day 2/week 1/month 1/ day 1/day 1/ day 1/ day 3/week Other millet Products; frequency of consumption Couscous 2/week C 2/week; Degue 1/month; Zoom- Kon 1/one to two months Couscous 1/day Couscous 1/week Couscous 1/week Degue 1/two weeks Degue 1/week Degue 1/day Zoom-Kom 1/week 1 to 2/week 1/month Degue 1/day 1/week 1/ day Gnou, Couscous 1/week 1/ month Boire-boire, couscous 1/ month 1/week 1/month Gnou1/day 3/week 1/month 9
10 (16) G,D,C Low Income 1 2/day 2/ day 1/day Couscous, Zoom-Kom 1/month 1/month 1/week G,D, Low Income 1 b 1/ day Zoom-Kom,others 1/day cookies 2 to 3/ day 1/day 2 to 3/day 2/ week G,D,C,B Low Income c 3/day Couscous 1/month 1/day 1/ month 2/month 1/month G,D,C,B Low Income d 1/day e Zoom-Kom 1/day e 1/day e a. To often made from maize because the flour is cheaper but millet is expected to regain some of this market if millet flour price can be reduced. b. Low income sector buys more at Ramadan(respondent). c. Low income sector buys less due to high costs of the products (respondent). d. Low income consumers prefer to buy the bouillie sold on the street in this neighborhood 11 (17) 12 (18) 13 (19) (respondent) e. If add in the to from maize, this would double the traditional dishes G: Grameaux; D: Degue; C:Couscous;B: Bassie; F:Millet flour Source: Field interviews Conclusions: Burkina is behind Mali in the development of the millet food processing sector due to the failure to raise productivity at the farm level. Since both millet and sorghum are staple foods the continuing price premium for millet indicates a general preference for millet. Moreover, the price premium for clean millet is even greater as processors bid for the smaller quantities of clean millet available. The wide range of millet processed products indicates the potential for growth in the sector especially as costs and prices decrease so that lower and middle income consumers could increase their consumption of these presently expensive products. To do this in Burkina Faso the initial focus will need to be on increasing productivity with moderate levels of inorganic fertilize and better varieties. The other components for increasing clean millet availability are already being worked on by Afrique Vert and the marketing structure puts a premium on clean millet. Table A-1. Characteristics of Millet Processors in Ouagadougou No. Millet Purchases 2014 (Tons) Purchased from Infant food (% value of sales) Major Products (% value of sales) Exports (% value of sales) Domestic Advance Orders (% value of sales) 10
1 12 OP Grumeaux/ bouillie 50%; galette 25%. 2 25 OP; wholeseller 90% 10% 3 4.5 OP Grumeaux/ bouillie 25%; couscous 25% 4 6.5 tons OP Grumeaux/ bouillie 5 14 OP; later collectors- village markets 6 14.5 Wholeseller a Grumeaux 30%; Degue 15% 7 6 OP Grumeaux 75%; Degue 25% 8 2 Regional Grumeaux 60%; merchant; OP Degue 35% 9 1.25 Bourse Cereal b ; Grumeaux 50%; merchant Degue 30% 10 1 OP; collectors Dehulled millet 60%; Grumeaux 20% 11 1.7 OPs; merchant Degue 40%;Grumeaux 30% Exports e 32 %; Fairs d 50% 2% Exports 10% 10%; Fairs 50%; Degue 30% 20% 100% NGOs 58% c Fairs 10% 2% 20% 15% 15% Fairs 10% 30% Export 10%; Fairs 20% 12. 62 tons (25 processors) collectors 100% boutique, pharmacy, hospitals 13 5 wholeseller 80% 25 to 60% 14 Part of network of No. 12 10% wholeseller 100% boutiques, pharmacy, hospitals 15 96 Merchant Grumeaux 60%; Degue 35% 16 1.9 Wholeseller; Grumeaux 60%; personal contacts Degue 35% with farmers 17 10.5 OPs; collectors Grumeaux 60%; Degue 35% 18 2 Collector Grumeaux 50%; Degue 25% 19 12 Collector Grumeaux 60%; Degue 30% a. Had quality problems with an OP. Exports 3%; Fair 7% 10% 10% 90% 2.5% 2.5% 11
b. Cereal exchange. Buyers and sellers meet. Show samples. Make contracts c. In a domestic program. d. Fairs include national and international buyers. We put them in the export category but some would be advance orders. In either of these categories they reinforce our point of selling to higher income clientele with a higher quality product. e. Two thirds of production exported in 2013. Source: Field interviews Notes: OP: organization of producers. Farmers association. Grumeaux is Monikuru in Mali. Degue is Tiakry in Mali A-2. Definition of Millet Products in Mali and Burkina Faso Surveys Tô : Is a thick porridge from cereal (maize, millet or sorghum) flours eaten with stew of meat or fish; process: boil water; add flour and steer slowly until you get thick paste. Gnon: prepared with millet flour, powder of cowpea leaves and spices. The mixture is then steam cooked. Bassi or Sweet Couscous. Process: a mixture of fine flours of millet and peanut is granulated, steam cooked, addition of sugar and the product is dried then packaged and labeled for marketing. Zoom-koom : Is a non steamed product. Millet grain milled into very thin flour; add water; steer to get a millet beverage widely used in Burkina Faso. Grumeaux or Monikuru séché or Bouillie: is a non steam cooked granulated flour; large granules used to make a thick porridge consumed morning and evening. Process: Screen to get thin flour; add water and hand granulate (large granules). Sundry and do packaging. Tiakri or Degue: This product is widely used for dinner by some communities in Mali, Burkina and Senegal. Process: wash the decorticated millet grain; add spices and aromas then grind and screen; add water and agglomerate the flour into small granules then steam cook ; screen for the second time then sundry. Packaging in plastic bags for marketing. Couscous sec: The millet couscous is eaten with milk or stew. The flour is first screened; put small quantity of water and agglomerate; second screening; steam cook; break the large granules to get the desired size; steam cook for a second time; break the large granules and screen; sun dry and package in plastic bags. Segoudégué: is a spicy granulated flour used to make thin porridge. Consumed any time during the day. Process: wash the decorticated millet; grind and screen the flour; add spices; add water and agglomerate into small granules; dry and pack. Farine infantile: infant food enriched with peanut and soybeans and supplemented with vitamins and minerals; distributed in regions where malnutrition is chronic. This infant food is 12
often sold in pharmacies. Process: Wash the non decorticated millet; dry and roast the grains ;add roasted peanut and soja ; mix and mill; screen the product and package in 100, 250 and 500 g bags. Bénédèguè : enriched flour with sesame ; flour used to make thin porridge consumed by the family (infant and adults). Process: wash the decorticated millet; clean the sesame; roast millet and sesame grains; mill the mixed grains and add spices; for marketing package in plastic bags (500 to 1000 g/bag). 13