Market Opportunities

The Rice Value & Commodity Chain Butaleja Uganda

Progress towards starting the WRS in Doho as a pilot

A technical presentation was made to the NAADS district Farmer forum, District NAADS Coordinator and District production officer
Potential storage facilities were identified in Doho rice scheme, Busolwe Ginnery, and Budumba Railway station.
A private investor, Cereal and Pulse EA was identified to operate the WRS with partnership and collaboration with NAADS, Doho Rice Scheme Management, Ministry of Agriculture, and Entebbe.
An official request for the stores in Doho was made to the Permanent Secretary MAAIF in Entebbe and was approved
Uganda Commodity Exchange (UCE), the government authority mandated to license WRS was contacted and a visit was schedule for inspecting the stores

Rational for Warehouse Reciept System.

Doho Rice Scheme Association!

Warehouse Reciept System at Doho!

The resulting seasonal floods of crop harvests (e.g. rice and maize) hitting the market always lowers prices, and farmers usually have no other choices but to sell at the prevailing market prices to the local traders. Their need for money arising from the accumulated bills piling up during the growing season, forces them to sell their produce immediately after harvest to village traders to get cash for school fees and food, to pay farm laborers, and to buy inputs for the next crop. Because Uganda’s financial sector traditionally has viewed farmers as too high-risk — especially those who rent land and therefore have no land for collateral, borrowing from a bank or other financial institution is not an option. The Warehouse Receipt System allows a farmer to store his crop, use it as collateral for a loan worth 80 percent of its value (at current prices), and sell it later when prices increase. The system helps farmers to overcome two challenges — the cyclical nature of farm income and lack of access to credit, that keeps many of them operating not far above the subsistence level.

RECOMMENDATIOS AND WAY FORWARD

Breaking through the cyclic market challenges facing small scale farmers is far from being achieved. However, this consultancy has clearly identified the key constraints and gaps with possible remedies through a participatory market chain analysis process. Accordingly, a strategy and road map has been drawn with the following recommendations:

Since rice is the number one commercial crop in Butaleja district, there is need to take forward the WRS for paddy rice with the stakeholders identified or else the opportunity is lost.
Training alone will not take away marketing challenges facing farmers in this area but rather an engagement of the farmers in the business opportunities already identified. Trainings need to be tailored to the market opportunities identified.
NAADS Butaleja and the district authorities may need to consider mobilizing more resources to extend this contract in order to:

o Continue with the process initiated for piloting a WRS in other potential and interested sub counties such as Budumba and Busolwe

o Continue the brokerage of market opportunities and linkages already identified and established

o Provide technical training to farmer associations that is tailored to specific market opportunities identified and brokered.

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