SIERRA LEONE maq 4ª.indd - agrilife - Europa

3 The Agricultural Sector
64
Table 15. Price of Local vs. Imported Rice in Sierra Leone per 50kg Bag
(Per 50 kg Bag) Freetown Up-Country Average
Local Rice SLL 80,000 SLL 66,000
Imported Rice SLL 65,000 SLL 72,000
Source: Freetown Interview: November 2006 Economic Policy and Research Unit, Ministry of Finance Government of Sierra Leone
May 2007 (Data from Fieldwork, November 2006).
Rice, the major food crop, has been
marketed by the private sector since the early
1990s. It is important to highlight that according
to several government reports (NRDS, 2009;
Economic Policy and Research Unit, Ministry of
Finance of Sierra Leone 2007) local rice is sold at
a premium price in the country’s capital market.
Table 15 presents the price differentials for local
and imported rice in Sierra Leone (per 50kg Bag)
between Freetown and the Up-Country Average.
In Freetown, the price of local rice is
generally about 15 to 20 percent higher than
the price of comparable grades of imported rice.
This reflects the high technological capacity from
foreign producers whose economies of scales
allow them to introduce rice into Freetown (and
other low income country capitals) at levels
which are below or close to the price of domestic
rice. The latter is in principle determined by
the local production costs. It is argued that the
price differential is also accentuated by the fact
that local rice is preferred to imported rice for
its taste and the belief that it is more nutritious
than imported rice for it has been parboiled
(NRDS, 2009). Consequently, an unmet demand
in Freetown (due to the limited supply of local
rice in the Western region) contributes to local
rice selling at a premium in the capital (Ministry
of Finance, 2007).. However, substitution of local
with imported rice may increase in the future
due to (i) growing appreciation of non parboiled
imported rice by the younger generation of the
population and urban dwellers (NRDS, 2009),
and (ii) the expected import tariff reduction that
may result from tariff harmonisation occurring in
the framework of ECOWAS and UEMOA regions
(see the above section on Agricultural taxation
and tariff policies).
Outside Freetown, local rice is cheaper than
the imported rice by about 8 to 10 percent. The
latter reflects that the cost of production of local
rice is lower than imported rice which has to be
transported up-country. Therefore, in these rural
markets, imported rice would not be traded at
all were domestic rice production high enough
(Economic Policy and Research Unit, Ministry
of Finance Government of Sierra Leone, 2007).
In other words, the higher price of imported rice
in the country side is reflecting both transport
costs and potentially the stress price paid by rural
households whenever their consumption of local
rice has been hampered due to local harvest loss
or reduced yields.
According to the report of the Ministry of
Finance (2007), the price differential for local
rice between the capital city and the country side
(approximately of SLL 15000 per 50kg bag) is
not entirely explained in terms of transport costs
which average SLL 2,000 from Makeni up to SLL
4,000 from Kono or Kenema per 50kg bag. The
latter implies that a mixture of not only transport
costs but also preferences in demand for local
rice and the high variability/uncertainty in the
domestic supply would better explain the price
differentials for local rice between the capital city
and up-country areas.
It is also reported that during rainy
season average transport prices may increase
substantially (by 40 to 50 percent) particularly
in the most remote areas (Table 16) The latter
implies that almost all of the observed price
differential between imported rice in Freetown
and up-country (SSL 7,000 per 50kg bag) would
be highly dependent on transport costs which
reach SSL 4500 in Kono headquarter during the