SWAT to Boost Rice Production in Liberia

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Mr. Nehme (2nd from right) and partners posed shortly after the signing ceremony

…Signs Public-Private Partnership Agreement

The Supplying West Africa Traders (SWAT) has signed a Public-private partnership (PPP) agreement with Cultivating New Frontiers in Agriculture (CNFA)/Liberia Agriculture Development Activity (LADA), to support the production and distribution of locally-produced rice in the country.

This agreement, which was cemented recently at a signing ceremony, will also help empower Liberian rice farmers in the areas of productivity, innovation and value addition.

The signing ceremony was witnessed by officials of the ministries of Commerce (MoC), Finance and Agriculture as well as other partners.

Agriculture Minister Mogana Flomo pledged the commitment of the ministry in making sure the partnership succeeds.

“The initiative is in support of the government’s pro-poor agenda,” SWAT Chief Executive Officer (CEO), George N. Nehme said upon signing the agreement.

By this, farmers will supply locally-produced rice to importers, who will sell on the market as well as directly to the public for consumption. The main objective of the PPP agreement, Mr. Nehme said, is to help, to some level, reduce the huge amount of rice that is imported annually.

Liberia imports a huge consignment of rice annually; a situation which affects the country’s meager resources. Huge quantities of about 400,000 metric tons of rice are imported every year. This represents more than 50 percent of the entire consumption of a total value of about US$200 million per year—an amount that could be diverted to other development priorities if local rice production starts to boom.

SWAT, which is the largest rice importer in the country, has pledged its full commitment to supporting the Liberian government achieve its pro-poor agenda.

It can be recalled that in 2009, the company started operations in the country and was given the rights to import rice. Shortly following the signing ceremony, Nehme expressed gratitude to President George Weah for challenging importers to look into investing in local production, and for consultation with the MoC and the Ministry of Agriculture and technicians of those two institutions, who remain committed to supporting this initiative.

Already, SWAT is working with some local farmers in Lofa and Nimba counties, with the aim to expand its network. Nehme also thanked the USAID (United States Aid for International Development) and CNFA/LADA team for continuing to build the capacity of the local farmers to produce more rice for the market.

“We are happy about this agreement because it is a new beginning to increase rice production, working together with the farmers as partners. My team at SWAT has been supporting this process over the last several months,” he said.

Nehme also thanked John Bestman, chairman of the Liberia Rice Importers Association, for his support to make the event come to light and other partners as well. “Over the years, we have had our share of ups and downs, but we have always worked with the MoC to make sure we prevented shortages or price hikes we could control. We believe in Liberia and the potential to grow a business in the country. This is why we have worked hard to attract investors in our company to help grow our company.

“Today, our investment covers two large warehouses, one with the capacity of 90,000 metric tons, while the other with the capacity of 68,000 metric tons. We have some 400 employees assigned in various capacities and many more working as brokers and agents in the counties,” Mr. Nehme said.

LADA Chief of Party (CoP), Willem Van Campen, reminded the participants that rice is the staple food of Liberia with a population of approximately five million. “The situation is not only a question of food security and food sovereignty. It is also an important issue for the use of foreign exchange and for the overall Liberian economy,” he said.

CNFA/LADA is under the United States Government’s feed the future initiative with funding from USAID.

Campen then pledged the unflinching support of CNFA/LADA to ensure the partnership succeeds and boost the agriculture sector of the country.

The goal of LADA is to increase income of smallholder farmers through increasing private sector investment in the Liberian Agribusiness sector, but the PPP agreement with SWAT supports component II of the CNFA/LADA program, which calls for market facilitation and policy advocacy for Liberian farmers and actors along LADA’s four supply chains (rice, cassava, vegetables and aquaculture).

SWAT, one of the importers of rice in Liberia, in consultation with the MoC, continued conversation with CNFA/LADA which led to the conclusion of the PPP agreement. The agreement, according to the two institutions, aims to achieve the boosting and distribution of quality locally-grown rice while empowering rice farmers to grow more.

The agreement wants to support Liberia to produce roughly 15,000 metric tons good quality milled rice per year. To reduce rice imports to below 30 percent by the end of 2020. The agreement, which expires on December 31, 2020, calls for SWAT to support the development of rice processing capacity by providing technical advice to local rice processors, by purchasing local quality rice that meet established specifications and eventually investing in local processing.

SWAT will consider provision of auxiliary services such as warehousing, transportation and equipment lease to rice sector actors, will consider forward contracting with local processors as a means to guarantee its provision of good quality locally produced rice and to facilitate processors’ business operations.

The company agrees that purchases from selected rice processors will be based on transparent quality and price negotiation where both business partners openly explain their opportunities and limitations. CNFA/LADA shall support procurement of rice processing mills to be utilized by local entrepreneurs to establish or expand private sector agro-enterprises, promote the full-time operation of mills procured with LADA support.

The party of the second part shall provide management oversight as needed to ensure mill operations are business and profit-oriented. CNFA/LADA shall facilitate and support the creation of market linkages between the processors and potential off takers, including the party of the first part.

6 COMMENTS

  1. This is very alarming to see that the USAID will use tax payers money to support a Lebanese business man in Liberia. There are lots of Liberian businesses that can utilize this funding. Also does USAID realize that there are Americans of Liberian origin whose taxes utilized to support a venture that is counter productive to the ordinary Liberian and should be given the opportunity to produce rice? USAID should stop this racist and secretive selection in rendering contracts. I respectfully request that USAID revisit this tender as it will be vigorously challenged.

    • if you vex, go do your own distribution. All this time, why you na build your own network? So so big big talk. We hungry. Are you in Liberia? I don’t care if the man is red or blue, if he bring he food direct. Thank you USAID. You know how to choose the company that will work. if you na like it, go grow your own rice.

    • This is disappointing. I prefer to see a Liberian-owned business benefit from this in the spirit of PPP strengthening local economies. Liberia’s economy has enough Lebanese control. FABRAR Rice is Liberian owned and is capable of farm to market supply chain movement. It has done it for years and has received support in the past from USAID to help grow its productivity. The problem with Liberians is we assume that there are no capable Liberian businesses which is not true. Although a Liberian businesses may not operate on the level of a multi million dollar corporation there should be provisions in contracts such as this that require the inclusion of a certain percentage of Liberian owned business.

  2. Which Liberian business can move rice from one area of the country to the other counties? is USAID responsible for the road network in the country? The bid was out, which Liberian did the bid? You think these Americans will just waste their money with no evidence about who can deliver? Everybody is doing it. What taxpayers’ money you talking about? “New economic pressures from the global slowdown, in fact, have been pushing more and more companies to successfully outsource transportation and other distribution functions to third-party logistics providers. Sixty-five percent of shippers surveyed for the 2013 Third-Party Logistics Study, for example, said they are increasing their use of third-party logistics services” burrislogistics

  3. Rice growers in Liberia will do well when the roads are completed. I am not suggesting that the rice growers should wait for roads to be completed before farms are made. Oh no. For a long time, subsistence farming in Liberia has been the norm. Now that roadwork is a top priority in Liberia, it’s about time that subsistence farming is phased out. But, our farmers will do well when swindlers are barred from interfering in the operation of the business.

  4. This is nothing more than an “offtaker” agreement and I am not sure why the author refers to it as a “Public-Private Partnership/PPP.” The GOL is not a party in the deal. LADA is an NGO project funded by USAID and has entered into essentially a supply chain aggreement whereby SWAT will purchase using its own financing locally grown rice to distribute wholsale to local rice retailers for sale to the public. What is the problem with that? SWAT employs hundreds directly and indirectly through an established supply chain as an importer. The model’s assupmtion is that by including locally grown rice in SWAT’s extensive ditribution channel, that will boost local rice farmers, processors, and producers and reduce the need for imported rice. This is all about access to market.

    Lets assume this model works, it could be expanded to include other entities as offtaker-wholesale distributors and not just SWAT, and besides, if the model can work with the biggest importer, then it can work with others.

    I don’t see the problem. It is a win-win. LADA supports farmers, processors and producers through its programs to increase their production, and SWAT buys as an offtaker and distributes to retailers.

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