The structure of emerging rice markets in Uganda

Masako Fujiie Chiba University

6.0

mt/ha

Rice Yield by Region

5.0

Africa

South America

Asia

4.0

3.0

2.0

1.0

0.0 1961 1971 1981 1991 2001 2011 Source: faostat

How rapidly the green revolution can be achieved?

Japan :started in the late 19 century It took 100 years to raise the yield of rice from 1t to 2t. Asia :started in 1960 40 years from 2t/ha to 4t/ha.

South America :started in 1980

20 years from 2t/ha to 4t/ha. Uganda :started in 200?
CARDCoalition for African Rice Development

aims to double rice production in 10 years

NERICA High yield variety in Africa

Glaberrima

NERICA

Is underdevelopment of local rice market hinder the development of rice production? What are the characteristics of local rice market in Uganda? how middlemen at various levels are organized into an entire network of rice marketing and how efficiently the system works ?

Study Area
1) Traditional rice growing area (Eastern part of Uganda) 2 villages in Namutumba Distrit 2) New rice growing area ( Western part of Uganda) 2 villages in Hoima District

Samples

240 farmers Namutumba : Near town 60 far from town 60 Hoima : Near town 60 far from town 60 60 traders 30 ricemillers

Village

Local Town

Urban area

Trading center Outside/Urban Trader Wholesaler

Village middlemen
Miller

Miller

Farmers

Town middleman
Village middleman Miller

Retailer

Retailer

Agent/Independent collector

Urban Trader

Town middlemen

Transaction between farmers and middlemen

Payment mode Selling rice in several times (when farmers need cash) due to bad security condition Competition among middlemen every year farmers sell rice to different middlemen In Namutumba Distrit , 85% of farmers sell milled rice while in Hoima district, 90 % of farmers sell paddy rice.

Findings on the characteristics of the middlemen of rice in Uganda

1. Most millers do not deal rice sale. (1/30 of millers deal rice in a large scale.)
2. Most village middlemen are farmers at the same time. (about 80%) 3. There are no restriction to enter the rice market. Average initial investment for becoming a middleman is about $200. 4. Average education level of middlemen is statistically higher than that of farmers 5. Most rice traders are also dealing other crops. 6. All Middlemen buy maize at farm gates before milling.

Transaction between local middlemen and urban traders

Buying rice from Selling rice to

Village middlemen

Farmers 88% Other village middlemen 12%

Outside traders 56%

Town traders and others 44% Outside traders 87%

Wholesalers in Kampala 11% Retailers & others 2%

Town middlemen

Farmers 47% (including through collectors) Village middlemen & others 53%

Customs of rice trading between local middlemen and outside traders.

Institutional arrangements between middlemen and traders

- Outside traders generally come once or twice a week and make order of rice to local middlemen with price, volume to buy, and deadline. - Outside traders give some fund in advance to middlemen to buy the rice - Only the middlemen who possess physical assets such us stores or storage can get order from outside traders. - Outside traders and local middlemen generally keep long relationship.

Complementary relationship between outside traders and local middlemen. -Under the conditions of communication development in Uganda-

Outside traders
Lack local information on the conditions of production. Use local middlemen to save searching cost of farmers.

Local middlemen Have local information but lacking funds to buy rice. Always monitor the rice production conditions of farmers so that they can respond the rice order from outside immediately.

Why in eastern region most farmers sell milled rice while in west region most farmers sell paddy rice?

Problem of lemon market