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COMMON FUND FOR COMMODITIES
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East African Rice Sector Development (Tanzania and Uganda)

 

The project, which has not started yet, seeks to improve the level of food security and living standards of rice farmers in Eastern Africa by a quantitative increase and quality improvement in rice production, and the simultaneous provision of a sustainable market. This will be achieved through a Public Private Partnership (PPP) approach in Tanzania and Uganda, that will substantially enhance the efficiency of model rice supply chains from primary producers to agro-industrial processors. 

The project rationale and activities are based on the results of two CFC workshops that were conducted in 2011 in Uganda and Tanzania in order to take stock of all previous and on-going activities in the East African rice sector and to identify persisting generic constraints and opportunities. During the workshops it became clear that numerous useful “upstream interventions” such as research on rice varieties and agronomy were completed over the last twenty years but “downstream” activities such as the commercialization of intensified rice production have not been fully addressed. Also since a few years a dichotomy has arisen in Africa between large scale food security programmes and smaller scale commercial approaches in food production. In contrast to large scale programmes undertaken in the past in the East African rice sector, the CFC project addresses a crucial issue: the harmonization of food security-supply policies applicable in Africa with demand driven policies focusing on market oriented activities of African farmers. If food production on the African continent needs to be expanded, a supply driven approach similar to most large scale food security projects is required. On the other hand African farmers also need to have access to a reliable and attractive market in conjunction of manageable risks, as a commercial incentive for selling their surplus food production.

The CFC intervention will address the issue of low competitiveness of locally produced rice, vis -a vis imported rice in terms of quality and price, that will lead to an incentive for East African farmers to engage in surplus rice production and make the sector competitive, even beyond the currently applicable 75% import tariff imposed on rice imports into the East African Community. An estimated number of 16,000 smallholder farmers and their dependants, with limited or no access to markets, are expected to have a substantial and sustainable increase in net income out of rice sales, as a result of the project. On a macroeconomic level, the project would lead to considerable foreign exchange savings in both countries due to the reduced rice imports. The value chains introduced by the project will serve as a model for other commercial rice processors and potential investors in the region to establish similar direct business linkages with farmers in order to secure high quality supply for the benefit of all value chain stakeholders.