Uganda: Country's Bet on Rice Begins to Payoff

Source from:  The Monitor (Kampala) 28 October 2008 10/29/2008

Trucks laden with cartons of rice make their way out of Kibimba Rice Scheme, momentarily turning the rice farm into a beehive of activity. Kibimba, a rice estate famed for its Tilda rice brand, is one of Uganda's leading rice growing estates. Tilda currently produces 20,000 metric tonnes of rice per year, accounting for about 20 per cent of the total rice production in the country. Ten years ago, Uganda was hardly known among rice producing countries but recent successes in rice production have earned the country a respectable place among rice producers that it could quickly turn into the regional supplier of rice. The Consultative Group on International Agricultural Research cites Uganda as the best case of a country that has turned from heavily depending on rice imports to one that is almost producing more than it needs. Rice production has increased by more than 400 per cent in a decade due to improved agricultural practices, effectively positioning Uganda into a potential rice basket. The Ministry of Trade estimates that rice output has more than doubled every year since 2004 and is expected to reach 180,000 metric tonnes by end of this year, up from 135,000 metric tonnes in 2006. Consumption of imported rice, meanwhile, has fallen by half every year since 2004. Uganda partly owes the recent boom in rice production to the resurgence of Kibimba Rice Scheme and the government's effort to promote rice growing among small holder farmers who account for more than 80 per cent of the total rice production. "We promote rice as something that brings food and also money," Prof. Gilbert Bukenya, the vice president and also the leading advocate of rice growing as a poverty alleviation tool, said. Mr George Bigirwa, a crop scientist and also the programme officer of Alliance for Green Revolution who was also instrumental in steering rice production in Uganda as a researcher at National Agricultural Organisation (Naro), said upland rice makes rice growing much easier as opposed to traditional varieties that mainly grow in paddies. "Rice was previously a low priority crop but due to innovative research at Naro we were able to come up with adaptable varieties," he said. "The government then took up the seeds and begun promoting rice growing." Uganda mainly produces three varieties New Rice for Africa (Nerica) that is Nerica 1, 4 and 10. Nerica 4 locally known as upland rice is what has turned many rice farmers into millionaires. "Nerica varieties can be grown in places that were not possible before," he said. Smallholder farmers cultivating pieces of land less than 5 acres are reaping from the rice windfall. Mr Frank Twimukye, a rice farmer from Bugangari sub county in Rukungiri District recently got Shs2.2 million from 30 bags of rice he harvested rice on 2-acre piece of land. "We now have a better standard of living; we can afford to send our children to school; put up iron-roofed houses and buy blankets and mattresses," he said. Mr Ntaho Frank, the chief administrative officer of Rukungiri said tobacco growing in the sub counties of Bugangari and Bwambara has virtually collapsed after the government introduced rice growing in the area. "Farmers realised that growing rice was more economically viable than tobacco growing," he said. Over the past few months, increase in rice prices due to a temporary imbalance in the supply and demand of rice, has created more profits for Ugandan farmers as farm-gate prices for rice shot to unprecedented levels. During this period a bag of rice increased to Shs75,000 up from Shs40,000. The current premium price of rice and other food stuffs offers smallholder farmers an excellent opportunity to grow more rice and other cereals. "The remunerative price of food will significantly raise rural household income, living standards and also feed the region," Mr Venugopal Pookat, the director of Tilda Uganda Limited, said. Uganda's total area under rice cultivation is now 300 per cent of what it was a decade ago. The area has increased from less than 60,000 and is now about 180, 000 hectares, showing a high rate uptake in rice production. The country's decision to increase tariff on rice imports is also partly responsible for increased production. Uganda imposed a 75 per cent duty on rice imports as a way of boosting local rice production. Rice importers on seeing the shift in the government policy thus heavily invested in new rice mills and expanding rice production in the country. This decision to increase tariff on rice imports mirrors that of big rice exporters, such as the US and Vietnam that continue to supply massive subsidies to their rice farmers. And such policy actions have quickly turned the country into a regional supplier of rice. "We estimate that approximately 75 per cent of the rice we produce is consumed in the domestic market and the balance is exported to neighbouring East African Countries," Mr Pookat said. "The main market for various brands of Tilda rice namely Tilda Kibimba Rice, Tilda Classic Aromatic, Tilda Crystal Rice and Tilda Rice Halves is the domestic market in Uganda, Western Kenya, Southern Sudan and Eastern DRC." However, due to the popularity and explosive growth in rice cultivation in the country, firms such as Tilda have begun losing skilled field workers. "When we lose our workers, we have to make great efforts in finding and training their replacement," Mr Pookat said. He said the exponential increase in the cost of fuel, fertiliser, herbicides, and packaging material also presents its own challenges. Mr Pookat said the current financial crisis and squeeze of disposable income, forces consumers to consider what they believe to be cheaper carbohydrate alternatives whenever available. While Uganda is turning into a regional supplier of rice, the country still imports rice from Pakistan, India, and Vietnam, some of the world's leading rice producers that can afford to dump rice in the market. Keen on taking on the big rice exporting firms from Asia, Tilda Uganda Limited has diversified into the aromatic basmati rice. "We have successfully managed to cultivate Basmati type varieties at our farm in Kibimba in Bugiri District and this product is available in limited quantities," Mr Pookat said. "Tilda Classic Aromatic rice represents excellent value to consumers in Uganda when compared to the high price of imported Basmati." As Uganda positions itself to be among the leading rice producers in the region, the general feeling among rice producers is that the government must sustain the current support because the industry has not fully taken off. "With the continued support of the Agricultural Ministry and our government, Uganda will be able to also supply our neighbouring countries, generating valuable foreign exchange and leading to greater food security for the East African region," Mr Pookat said. While the country is currently enjoying a boom in rice growing supported by good farming practices and premium market prices, players in the rice industry say the boom may not last long. "Due to the diversion of agricultural land for bio-fuels, increasing unreliability of traditional weather patterns due to climate change and desire of many rice growing nations to build up buffer stocks, we may seen the end of very cheap food (cereal) prices for the next 10 to 15 years," Mr Pookat said. Enditem