Milling and related activities are central to the improvement of the quality of locally produced rice in many African countries. Fee-based milling and paddy buying-milling-selling services are among the strategies used in the milling business. The Heckman two-stage model and gross profit method were used on survey data, collected in 2011 on rice millers in major rice-producing regions of Benin to identify the factors that influence millers’ choice of strategy and determine the quantity of paddy milled under the buying–milling–selling strategy. Results from the first stage of the Heckman model identified previous salary activity, utilization of modern technology, and trade as main activity as factors positively influencing millers’ decision, while the second stage showed that the milling capacity and length of service in milling activity as factors positively influencing the quantity of paddy milled. The average profit of miller-traders was higher than that of millers-only.
Key words: Rice milling activities, determinants of paddy purchase, Heckman two-stage model, profitability.
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