The Story Behind Jollof
Jollof, a rice and chicken dish, is a favourite across West Africa. In Nigeria it is the spicy centrepiece of family get-togethers and celebrations. Rice is a staple food in this nation of 186 million people and Nigeria’s relationship with it is complex and political. For decades Nigeria imported much of its foodstuffs including rice. But with negative oil price shocks this policy became unsustainable. Successive governments tried to stimulate domestic production by introducing bans on rice imports but this did not solve the problem as the country’s porous borders allow smuggled rice to enter the market. In addition lack of investment in agriculture meant that local producers were not able to compete with cheap Thai imports.

Meanwhile rice consumption grew rapidly in tandem with the nation’s rising population. Decades of imports have led Nigerians to prefer imported rice to local rice. Not only is imported rice generally cheaper but local rice often contains stones because of the rudimentary way it is threshed. After the 2008 spike in rice prices the Nigerian government made rice production a national priority providing incentives to local growers. This year, it is hoping that the nation will not need to import rice and that it can cover local consumption with its target of 7 million tons of domestic production.
Across the globe, the availability of rice is an extremely sensitive subject. The largest rice producing countries tend to keep most of their harvest with only around 10% total production traded annually on global markets. Stockpiles are three times greater than annual trade. Even with heavy investments in rice production most nations that rely on rice as a staple cannot guarantee sufficient production to cover their needs given the volatility of harvests in a post climate-change world. Add rapid population growth to the mix and the stage is set for steep increases to the price of basic food stuffs. In light of this it is crucial for food security that markets for basic commodities operate in an efficient and transparent way.
Currently, the $450 billion global rice trade is dominated by large opaque transactions that make it difficult for market participants to get price transparency and to hedge against volatility. As many complex steps are required to complete a trade small-scale rice producers are forced to rely heavily on middle men and bureaucratic procedures and they tend to be penalised on transactions costs. These farmers also struggle to get the financing they need to improve farming methods and boost yields.
All this is about to change with the birth of Rice Exchange, a digital platform built on block chain technology, designed by rice traders specifically for the global rice trade. The initiative is the brain child of Stephen Edkins, successful entrepreneur, who cut his teeth in China in the renewable energy sector. Edkins and his team have built an innovative rice trading platform that allows buyers and sellers to enjoy full price and reputation discovery. In turn this will help improve food security and outcomes for small-scale rice producers and reduce price volatility.
Block chain technology lends itself to commodity trading because it simplifies the steps and provides transparency. Once a transaction is made it is immutable and a record of each step of the trade can easily be found. This has important implications for transparency as information such as the provenance of the rice, its grade and the fertilisers used in its production can be stored in the digital profile. Each step of the trade can be viewed in real time reducing the costly delays that result when paperwork goes missing. The transparent nature of blockchain technology could help reduce speculative trading in rice. Speculation was partly to blame for the 30-year high in the price of rice in 2008 that resulted in food riots and hoarding in many countries.
Rice Exchange is now onboarding buyers and sellers on its trading platform ahead of the full launch later this year. The first parties that commit to trade rice on the platform will receive an allocation of tokens at the launch of the exchange. Token holders will be eligible for discounted fees when accessing and using the trading platform. As the platform develops and its value is demonstrated buyers and sellers will come to the exchange without the need for incentives.
So next time you settle down to a hearty jollof in downtown Lagos, the rice on your plate could be the fruit of brand new technologies applied to one of mankind’s oldest foods.

