Rice, the new tool to fight poverty
Jan 15, 2009
GOVERNMENT efforts to promote rice production in the country are gaining momentum, a situation that is transforming the cereal not only as foreign exchange saver but also as a foreign exchange earner.
IBRAHIM KASITA
GOVERNMENT efforts to promote rice production in the country are gaining momentum, a situation that is transforming the cereal not only as foreign exchange saver but also as a foreign exchange earner.
This has led to investments in rice mills, expanded employment and created competition for farmers’ output, thereby improving prices. Among the local investors who have entered the rice industry is Philip Idro, who has been a local leader, electoral commissioner, chief spy, diplomat and now an industrialist.
His posting to China brought him into close contact with Hu Jintao, the President of the People’s Republic of China who continuously talked to Uganda’s top leadership about prospects of business in China.
This exposure enabled Idro to turn to rice milling. He says the real money is in agribusiness. “There is need to eradicate poverty and ensure that Prosperity For All thrives in rural areas, especially the farming communities,†explains Idro.
“The activities involved in the rice value addition have a potential to create wealth for all. This chain includes the farmers, transporters, middlemen, millers, traders and the economy.â€
Idro discloses that according to the Food and Agricultural Organisation (FAO) statistics, Ugandan farmers contribute 170,000 tonnes of rice which fetches about sh102b annually as household income.
“Africa consumes about 15 million tones of rice but produces only 10 million tonnes. The five million is imported,†he says.
“With the good climate, Uganda can produce more rice to feed the region and earn foreign exchange. Therefore, we should convert rice into a foreign exchange earner from foreign exchange saver.â€
Upland Rice Millers Ltd (URM) born
To implement the Properity For All programme (Bona baggawale), Idro invested and started the Upland Rice Millers Ltd (URM) in Jinja in 2006. This was with the support from DANIDA, USAID-APEP, UDET, Enterprise Uganda, government agencies and the British Council. The firm purchases and processes rice harvested mainly in eastern Uganda.
“My goal is to demonstrate that small farmers and enterprises can be developed faster into commercial ventures to ensure that farming becomes a business,†stresses Idro.
“For a Ugandan rice farmer to benefit from national, regional and international markets it demands the establishment of quality standards and URM will ensure quality and standard rice for customers.â€
Why rice milling?
According to Idro, rice demand in Uganda stands at 250,000 metric tones and is expected to increase to 550,000 in the next five years.
He says rice imports for Kenya and Tanzania stand at 750,000 metric tonnes per year.
“The total number of rice farmers has increased. The demand and supply of rice will continue to increase substantially over the medium- term,†predicts Idro.
“The growth underscores the need for quality milling services that will meet the growing demand and supply at commercial levels.â€
Benefits of rice to the farmer
In a bid to boost rice production and add value to rice from producers, URM has started training and providing agronomical skills to farmers.
Idro says the training will go a long way towards increasing rice production for the local market and export sustainability.
“Once a farmer is properly trained and skilled, production will grow, which will eventually yield more income to the farmers because of the high yields,†he explains.
“We have also managed to facilitate rice farmers to access loans to boost production. This is one of the strategies that will upgrade subsistence farming into commercial venture.â€
Idro adds that rice growing has been regarded as a foreign exchange saver but his mission is to ensure that it also becomes a foreign exchange earner.
Other efforts to promote rice
The country’s rice output has risen 2½ times since 2004, according to the Ministry of Trade. Rice production is expected to reach an astonishing 180,000 metric tones this year, from 135,000 in 2006 and 102,000 in 2005. Consumption of imported rice, meanwhile, fell by half from 2004 to 2005, and by half again from 2005 to 2007.
One of the leaders of Uganda’s rice revolution is the Vice President Gilbert Bukenya. He is also a leading advocate for commercialisation of agriculture.
He wants Ugandans to eat more homegrown rice, boost local farmers and rice millers, while freeing hard cash for other uses.
The boom in rice production is also attributed to the resurgence of the Kibimba Rice Scheme and the Government’s efforts to promote rice growing among small holder farmers who account for more than 80% of the production.
Challenges
Rice production is mainly carried out by small-scale farmers whose yields per acreage are low.
According to Idro, a Ugandan farmer gets an average of two tonnes per hectare yet his counterpart in Egypt harvests 10 tons per hectare.
“Because of low productivity, Uganda’s cost of productivity is high. How do you expect our farmer to come out of poverty when his/her productivity is low?†he asks.
“Our farmers are insufficient and therefore, there is a need to provide technical knowledge to them in order to increase productivity.â€
Lack of inputs, argues Idro, is also contributing to low productivity. Because most farmers use hand hoes, they are unable to afford the required agricultural inputs to improve soil productivity and quality control hence low production.
Access to credit for small farmers and small and medium sized businesses is exceedingly difficult through normal commercial channels.
Lenders incur high administrative costs when providing credit to this segment of the population and the interest rates that need to be charged to offset this risk make the loans unaffordable to the would-be borrowers in the rice sector.
“But farmers are reliable with rice when given credit as seen by Centenary Bank which gave loans to rice farmers in Lira and Kapchorwa,†Idro adds.
Edge to move the rice sector
There is a need to ensure that all land is utilised effectively. This requires proper land use planning and resolving land use conflicts. The Government should reduce reliance on hand-hoes, particularly by improving access to credit and technology.
Credit to enable farmers and business people acquire appropriate equipment, especially oxen, power tillers, tractors and other tools should be provided.Equipment hire services also help.
The Government should ensure proper functioning of the credit and extension advisory services and enforce a strict code of conduct for SACCOs leadership.
Improve the development and use of seeds, fertilisers, herbicides and pesticides in order to raise productivity. This requires improvements in extension services to remote areas. A system of properly targeted cost effective supplies to be commercially viable and competitive in the world market is also needed, Idro concludes.
GOVERNMENT efforts to promote rice production in the country are gaining momentum, a situation that is transforming the cereal not only as foreign exchange saver but also as a foreign exchange earner.
This has led to investments in rice mills, expanded employment and created competition for farmers’ output, thereby improving prices. Among the local investors who have entered the rice industry is Philip Idro, who has been a local leader, electoral commissioner, chief spy, diplomat and now an industrialist.
His posting to China brought him into close contact with Hu Jintao, the President of the People’s Republic of China who continuously talked to Uganda’s top leadership about prospects of business in China.
This exposure enabled Idro to turn to rice milling. He says the real money is in agribusiness. “There is need to eradicate poverty and ensure that Prosperity For All thrives in rural areas, especially the farming communities,†explains Idro.
“The activities involved in the rice value addition have a potential to create wealth for all. This chain includes the farmers, transporters, middlemen, millers, traders and the economy.â€
Idro discloses that according to the Food and Agricultural Organisation (FAO) statistics, Ugandan farmers contribute 170,000 tonnes of rice which fetches about sh102b annually as household income.
“Africa consumes about 15 million tones of rice but produces only 10 million tonnes. The five million is imported,†he says.
“With the good climate, Uganda can produce more rice to feed the region and earn foreign exchange. Therefore, we should convert rice into a foreign exchange earner from foreign exchange saver.â€
Upland Rice Millers Ltd (URM) born
To implement the Properity For All programme (Bona baggawale), Idro invested and started the Upland Rice Millers Ltd (URM) in Jinja in 2006. This was with the support from DANIDA, USAID-APEP, UDET, Enterprise Uganda, government agencies and the British Council. The firm purchases and processes rice harvested mainly in eastern Uganda.
“My goal is to demonstrate that small farmers and enterprises can be developed faster into commercial ventures to ensure that farming becomes a business,†stresses Idro.
“For a Ugandan rice farmer to benefit from national, regional and international markets it demands the establishment of quality standards and URM will ensure quality and standard rice for customers.â€
Why rice milling?
According to Idro, rice demand in Uganda stands at 250,000 metric tones and is expected to increase to 550,000 in the next five years.
He says rice imports for Kenya and Tanzania stand at 750,000 metric tonnes per year.
“The total number of rice farmers has increased. The demand and supply of rice will continue to increase substantially over the medium- term,†predicts Idro.
“The growth underscores the need for quality milling services that will meet the growing demand and supply at commercial levels.â€
Benefits of rice to the farmer
In a bid to boost rice production and add value to rice from producers, URM has started training and providing agronomical skills to farmers.
Idro says the training will go a long way towards increasing rice production for the local market and export sustainability.
“Once a farmer is properly trained and skilled, production will grow, which will eventually yield more income to the farmers because of the high yields,†he explains.
“We have also managed to facilitate rice farmers to access loans to boost production. This is one of the strategies that will upgrade subsistence farming into commercial venture.â€
Idro adds that rice growing has been regarded as a foreign exchange saver but his mission is to ensure that it also becomes a foreign exchange earner.
Other efforts to promote rice
The country’s rice output has risen 2½ times since 2004, according to the Ministry of Trade. Rice production is expected to reach an astonishing 180,000 metric tones this year, from 135,000 in 2006 and 102,000 in 2005. Consumption of imported rice, meanwhile, fell by half from 2004 to 2005, and by half again from 2005 to 2007.
One of the leaders of Uganda’s rice revolution is the Vice President Gilbert Bukenya. He is also a leading advocate for commercialisation of agriculture.
He wants Ugandans to eat more homegrown rice, boost local farmers and rice millers, while freeing hard cash for other uses.
The boom in rice production is also attributed to the resurgence of the Kibimba Rice Scheme and the Government’s efforts to promote rice growing among small holder farmers who account for more than 80% of the production.
Challenges
Rice production is mainly carried out by small-scale farmers whose yields per acreage are low.
According to Idro, a Ugandan farmer gets an average of two tonnes per hectare yet his counterpart in Egypt harvests 10 tons per hectare.
“Because of low productivity, Uganda’s cost of productivity is high. How do you expect our farmer to come out of poverty when his/her productivity is low?†he asks.
“Our farmers are insufficient and therefore, there is a need to provide technical knowledge to them in order to increase productivity.â€
Lack of inputs, argues Idro, is also contributing to low productivity. Because most farmers use hand hoes, they are unable to afford the required agricultural inputs to improve soil productivity and quality control hence low production.
Access to credit for small farmers and small and medium sized businesses is exceedingly difficult through normal commercial channels.
Lenders incur high administrative costs when providing credit to this segment of the population and the interest rates that need to be charged to offset this risk make the loans unaffordable to the would-be borrowers in the rice sector.
“But farmers are reliable with rice when given credit as seen by Centenary Bank which gave loans to rice farmers in Lira and Kapchorwa,†Idro adds.
Edge to move the rice sector
There is a need to ensure that all land is utilised effectively. This requires proper land use planning and resolving land use conflicts. The Government should reduce reliance on hand-hoes, particularly by improving access to credit and technology.
Credit to enable farmers and business people acquire appropriate equipment, especially oxen, power tillers, tractors and other tools should be provided.Equipment hire services also help.
The Government should ensure proper functioning of the credit and extension advisory services and enforce a strict code of conduct for SACCOs leadership.
Improve the development and use of seeds, fertilisers, herbicides and pesticides in order to raise productivity. This requires improvements in extension services to remote areas. A system of properly targeted cost effective supplies to be commercially viable and competitive in the world market is also needed, Idro concludes.