Breaking the myth of urban consumers

The rice value chain team at Africa Rice Center, Cotonou (Benin), Dar-es-Salaam (Tanzania) and Saint Louis (Senegal) organized and hosted a training workshop from 21 to 25 April 2014 in Dar-es-Salaam on ‘Experimental Auctions’ for national agricultural research systems (NARS) scientists from seven African countries, namely Benin, Côte d’Ivoire, Madagascar, Niger, Nigeria, Tanzania and Uganda. Supported by the African Development Bank he training workshop , aimed to contribute to building the capacity of partners from the ‘Support to Agricultural Research for Development on Strategic Commodities in Africa (SARD-SC)’ project countries in the theory and practice of conducting experimental auctions. Experimental auctions are conducted with the aim of promoting value chain innovations through improving existing marketing strategies for rice and rice-related products in the rice sector development hubs. In his opening remarks, Dr. Paul Kiepe, Regional Representative for East and Southern Africa, emphasized the importance of consumer-based research which responds to consumer needs and preferences, instead of the traditional focus on issues of production without linkage to market. During the training, theoretical aspects of experimental auctions were covered and practical auction sessions were conducted. Forty-one participants, including 20 men and 21 women, were randomly recruited from two markets (Kisutu and Tandare) in Dar es Salaam. The participants were asked to assess four rice types in both cooked and uncooked forms. Each participant was given one kilogram of the benchmark rice generally perceived to be of a lower quality in terms of some prior determined criteria. They were then tasked to make a decision of upgrading to an available rice type of a better quality and offer an amount expressing the willingness to pay (WTP) in order to obtain a kilogram of the alternative rice type. The offers were assessed and the highest bidder was declared winner of the auction. In the light of the Vickrey Auction Procedure, the winner of the auction was charged a second price (certainly below what his/her price offer for the auction was!) The benchmark was SARO-5 (TXD 306) a semi-aromatic rice variety, mainly grown in the Morogoro region of Tanzania. There were three alternative rice varieties: (1) ‘Mchele wa Mbeya’, which is commonly found in the Dar-es-Salaam market but is generally considered to be a mixture of different rice varieties , (2) Supa, presumably the most preferred by consumers (grown in Mbeya and Arusha regions), and (3) Kalamata mainly grown in Shinyanga region but with a historically bad reputation in terms of consumer perception; known for poor grain quality due to direct drying on the ground and by the road side. Although the drying system has since improved considerably by using tarpaulin, to the urban consumer with a preference for clean rice, Kalamata is still not well perceived; rather it is Supa Mbeya that enjoys the place of honor in as far as consumer taste is concerned in Dar-es-Salaam. Supa is considered the best in terms of its aroma, cleanliness, freshness, and low percentage of breakage. This professed preference was however called to question during the experiment as consumers expressed strong preference for Kalamata. It was confirmed through their unanimous decision to upgrade from the SARO-5 to Kalamata which was not the case for the other alternative rice types that were presented to the consumers. Furthermore, the average WTP for Kalamata was the highest observed, ranging from 560 to 630 Tanzanian Shillings (Tsh) per kilogram in comparison to the other varieties whose WTP lay between 190 and 310 Tsh per kilogram. The preference for Kalamata remained dominant throughout all the rounds and was even more pronounced after the sensory test of the cooked rice, and during and after the discussions among participants in the collective auction sessions. While preference for Supa improved with the tasting of the cooked rice, no other changes were observed in the other rounds. Although consumers claimed they preferred Supa, and strongly believed they had correctly affirmed their preferences, it is the less-known traditional Kalamata variety which emerged as the clear winner of the auction, implying that indeed it holds the potential to compete in the urban market of Dar-es-Salaam. This certainly is good news for the Kahama rice hub in Tanzania, which is the biggest producer of Kalamata. Certainly, these results will be investigated further. Yet, the experimental auction unveiled its potential in becoming competitive at the Dar-es-Salaam market should quality improvements, promotions and branding activities be pursued to restore its image and reputation. As Dr Paul Kiepe emphasized in his closing remarks, these tangible results can be adopted as areas for further action in research in enhancing consumer awareness. A comparison of producer prices in the production regions which are located at no less than 500 km from Dar-es-Salaam and wholesale prices in Dar-es-Salaam confirms the suspicion that the ‘good/aromatic rice varieties are just mixed with the non-aromatic rice.