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Musoma enterprise wins orders in regional market

The Competitive African Rice Initiative in East Africa (CARI-EA) project aims at enabling locally-produced rice in East Africa to competitively substitute the over US dollars 300 million worth of rice currently being imported into the East Africa Common Market. 

CARI-EA is commissioned by the United States Agency for International Development (USAID) through the Alliance for a Green Revolution in Africa (AGRA) strategy of Promoting Inclusive Transformation in Africa (PIATA). The three-year (2019-2022) CARI-EA project has leveraged a total of USD 2,416,753 from public and private sector investments so far.

The project targets to reach 660,000 farming households (220,000 directly and 440,000 indirectly impacted). It aims to contribute to inclusive transformation of the rice sector in East Africa for sustainable increase in incomes of women, men and young people employed in the value chain of locally produced rice.

Jointly implemented by Kilimo Trust and the East African Community(EAC) Secretariat, the CARI-EA project will directly support the transformation of 220,000 smallholder-farming households (SHFs) ) – 150,000 SHFs in Tanzania, 50,000 SHFs in Uganda and 20,000 SHFs in Kenya. 

Indirectly, the project will benefit another 440,000 households (300,000 in Tanzania, 100,000 in Uganda and 40,000 in Kenya) – through the systemic change in market, trading, rice products, financial, inputs and knowledge systems to be developed. 

However, through spill-over effects, of a better regional rice trading system, CARI-EA will influence the entire rice 3 million metric tonnes a year industry of locally produced paddy in the EAC, made of 2.7 million smallholder farmers, more than 1,500 SMEs of millers and other actors.

The overall goal of this project is to contribute to inclusive transformation of the rice sector in East Africa for sustainable increase in incomes of 220,000 women, men and young people employed in the value chain of locally produced rice in the East Africa Community.

The project aims at increasing productivity, commercialization, profitability, and resilience for enterprises and smallholder producers of rice. To date, the project has established 22 business consortia in Kenya, Tanzania and Uganda.  

It also seeks to strengthen and expand access and competitiveness in the national and regional markets for the locally produced rice.CARI-EA has attracted support from the Executive Office of the President of Kenya.

All Government institutions are urged to buy rice from farmers through their cooperatives such as the Mwea Rice Growers Multipurpose Cooperative Society. The cooperatives are expected to mop up, mill and sell the rice to the Kenya National Trading Corporation (KNTC), a government owned agency/parastatal.

Further, the project is designed to strengthen local, national and regional enabling policy and institutional environment for optimal commercialization of the rice sector.

Expected outcomes principally aims at capturing at least 20% of the rice imports (US dollars 60 million and year and replace the imports with rice from paddy locally produced in the EAC.Large importers of rice into EAC, are through CARI-EA expected to source at least 30% of supply from locally produced rice.

New investment into the rice value chain to the tune of USD 10 million are to be leveraged from private sector investors.The project aims at a 50% increase in incomes of the targeted SHFs, strengthened and expanded business development, and financial and risk management services in the rice value chain.

Also expected to be achieved through CARI-EA are increased adoption of technologies and practices enhancing productivity and reduced post-harvest losses along the entire value chain.It also seeks the reduction of trade barriers in the EAC because of a strengthened national and regional agricultural policy environment.

There have been major success stories recorded as a result of the CARI-EA project, with 22 business consortia established by the project to date (6 in Uganda, 4 in Kenya, and 12 in Tanzania).  

Project partners include Upland Rice Millers, Diners Group Ltd, ZAABTA, Equator Seeds Ltd and A K Purongo Ltd and Ssunad Ltd in Uganda, and Mwea Rice Growers Multipurpose Cooperative Society, COFA Cooperative Society, Nyabon Enterprises and Tag Ahero CBO in partnership with Western Millers Ltd in Kenya.

The project has the largest number of partners in Tanzania – RM Holdings Ltd, Kyela Rice Processors Ltd, Ruaha Milling Company Ltd, Faki Rice and Milling Enterprises Ltd, One Goal Company Ltd, Wami Valley Growers and Processors Company, Alaska Tanzania Ltd, Busega Mazo Ltd, Nondo Company Ltd, Kishapu Food Processors Ltd, Mamboleo Farm Ltd and Musoma Food Company Ltd. 

These partners will directly integrate at least 211,649 SHFs and the project will leverage at least USD 2,759,366 from matching fund partners. 

CARI-EA will support the EAC Secretariat to address the most critical bottlenecks in creating an enabling environment for structured trade in rice at both national and regional levels.

Back in 2016, the Musoma Food Company Ltd (MCFL) operated as a local company targeting the local market for its products, mainly rice and maize flour. The company relied heavily on its outlets in Shinyanga and Mwanza and small trucks which supplied rice and maize flour to food vendors around Shinyanga town.

Few tonnes of rice were sold to off-takers from Arusha and Dar es Salaam. This was mainly due to inconsistencies in getting adequate quality supply of paddy resulting in significant shortage of raw materials for operation. Despite having good machines, MFCL continued to produce low-quality products that couldn’t compete in the market.

The beginning of 2016 turned things around significantly for MFCL. The company is grateful to CARI-EA for bringing a new business model that has changed its thinking and operations.

The establishment of a business relationship between MFCL and smallholder farmers has improved the quality and quantity of paddy supplied to the company through contract farming and collective selling.

Also, the farmers have adopted an improved rice variety (SARO 5) that produces a high yield. The CARI-EA project has improved milling efficiency through good manufacturing practices and training. 

MFCL production personnel have acquired new skills on how to improve rice quality by observing hygiene and safety issues, machine setting, laboratory testing, proper packaging, and transportation.

Such improvement has now attracted big rice buyers including traders from East African countries and international organizations. MFCL has been awarded a tender by the World Food Programme (WFP) to supply 2,000 metric tonnes of rice to refugees in Western Tanzania.

MFCL is also supplying 6 metric tonnes of rice per week to Kenyan traders via the Namanga border post. All these have been made possible through the improved milling environment stimulated by the CARI-EA project.

Capturing these new markets will enable MFCL achieve its annual target of marketing 25,000 metric tonnes of rice in 2021. The CARI-EA project has farmers who supply paddy to MFCL to strengthen business relations with the buyers.

For example, farmers in Bukangilija and Nyida now practice collective selling courtesy of the FBS training received during the project period. The training ensures MFCL of the availability of the quantity of paddy required and in turn ensures farmers of market availability.

Thanks to the USAID and AGRA, PIATA strategy.

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