Sustainability as the key to strong and competitive rice markets in Tanzania and Uganda | COMPLETED

Sustainability as the key to strong and competitive rice markets in Tanzania and Uganda | COMPLETED

Significant business opportunities remain for rice farmers. Future investments must enable smallholder farmers and processors to build their businesses in a sustainable way and to acquire new skills.

Rice farmers worldwide are the most vulnerable to the impact of climate change. Droughts, floods, high temperatures and water salinisation due to rising sea levels, seriously affect harvests. Rice farming requires around 40% of the world’s irrigation water and contributes significantly to climate change. Large amounts of greenhouse gases are generated by rice farming, with 10% of global methane emissions coming from rice paddies. The challenge is to meet global rice demand while still protecting our planet.

In East Africa, rice is an important food security crop, with an average per capita consumption at 25.8kg for Tanzania, 14kg for Kenya, and 8kg for Uganda. Consumption exceeds local production, with Kenya and Uganda being significant importers of rice; and demand for rice is growing. There are however large disparities in import dependency across the region; Uganda’s rice import share for example stands at 24 percent (MAAIF Statistical abstract 2018) while that of Kenya stands at about 80 percent. The governments of Tanzania and Uganda have recognised the opportunity for their rice sectors and protect their developing farmers, processors, and traders by imposing a 75% tariff on rice imports while Kenya has imposed a 35% tariff. They are also investing in new irrigation schemes, mechanising existing schemes and promoting new rice varieties.

Rice production in Uganda and Tanzania is dominated by smallholder farmers, although they are often operating within large irrigation schemes that were developed by the Government with significant donor funds. Key donors like the World Bank, Africa Development Bank, Islamic Development Bank, and Japan International Cooperation Agency (JICA) continue to prioritise support to rice sector development.


Despite the significant development of the rice sector in Tanzania and Uganda, there are still significant challenges, especially the high production and trade costs and variable quality which limits the sector’s competitiveness in world markets.

  • At the farm level, a key challenge is that markets do not incentivise farmers to invest in upgrading their production and post-harvest techniques. There is also a lack of knowledge on how to improve quality and produce sustainably. When farmers want to invest, they also face challenges in accessing improved rice seeds and genuine fertilisers and pesticides. There are differences between Uganda and Tanzania, a key one being that fertilisers are over-used in Tanzania and under-used in Uganda. This means that the cost per metric tonne of production is expensive compared to other countries, especially in Asia.
  • At the processing level, milling, storage, warehousing, and mechanisation services are poor in Uganda, but above average in Tanzania. However, Tanzanian mills are rarely running at full capacity and therefore the business profitability is often low. A significant reason for this is the lack of business analysis and planning in the sector, which means that Government and donor support can lead to too many or the wrong type of mills in one area, or the cooperatives present do not have the capacity to run a processing business.

These challenges were examined in more detail by a Rikolto study in 2016, which confirmed that profit margins in the rice value chain are small and investments are essential to reduce costs and achieve economies of scale at both production and processing levels.

Strategies and actions

Rikolto has been working in the rice sector in East Africa since 2014. Currently, our actions are geared towards finding solutions to the disruptions caused by covid-19 and ensuring that our activities are sustainable after the end of the current programme in 2021.

In response to the covid-19 pandemic, we will conduct the following activities throughout 2020 and 2021:

  • Support farmer organisations specifically to adapt their business models and governance structures and processes in order to be better prepared for shocks as the covid-19 pandemic.
  • Covid-19 interrupted the rice harvesting season and delayed planned activities to improve access to finance and insurance for smallholder farmers. In Uganda, we’ll restart these activities and cooperate with the Microfinance Support Centre for credit access and the agro-insurance consortium set up by the government of Uganda.

To ensure the sustainability and continuation of the activities beyond 2021, we will set up the following exit interventions:

  • By setting up National SRP Chapters in Uganda and Tanzania, ensure that the Sustainable Rice Platform Standard is reflected in national strategies and policies. The purpose of these chapters is to adapt the SRP standard to make it relevant to the national context in a multi-stakeholder setting. This is necessary because the SRP standard was developed in Asia. The National Chapters will also provide the leadership essential for scale and durability.
  • Support the Ugandan National Bureau of Standards in the popularisation of the rice standards by translating the standard into local languages.
  • Assess the business environment for family farmers in consultation with the Tanzanian Chamber of Commerce, Industry and Agriculture. Based on the assessment, barriers that exist for farmers will be addressed.
  • Strengthen the internal capacity of farmer organisations to be strong and professional, especially in negotiating business deals. In Tanzania, capacity building is done by local consultants and graduates from the Moshi Co-operative University who are interns at the farmer organisations. In Uganda, special attention is given to support two farmer organisations (Taabu Integrated Cooperative Society Limited and Bunambutye Area Cooperative Enterprises) who were previously producing soybeans and maize but who recently switched their focus to rice.
  • Further develop a commercial seed distribution system with local entrepreneurs to ensure the availability of pure seeds and support the multiplication process, for instance for Magugu rice
  • Develop and improve access to digital solutions for smallholder farmers and other actors with the rice value chain.
  • Facilitate multi-stakeholder forums in Tanzania and Uganda addressing challenges with access to finance for smallholder farmers. The forums aim at the adaptation of existing financial products to make them fit for purpose and responding to the various financing needs of chain actors.

Rikolto East Africa is also part of Rikolto’s Global Rice Cluster which works in 9 countries in Africa and Asia. The work that we do therefore feeds into evidence building that can be used in the Sustainable Rice Platform.


Rikolto currently works with over 6,000 rice farmers in Uganda and Tanzania to support inclusive business development. Within one of the rice schemes we also are piloting the Sustainable Rice Platform tool with 3,250 farmers.

Sustainable rice cultivation

In 2018, Rikolto launched its work on the Sustainable Rice Platform (SRP) standard with pilots in Uganda and Tanzania. The work to strengthen SRP scores of farmer organisations in two irrigation schemes in Uganda and one scheme in Tanzania continued in 2019. Our SRP work has not gone unnoticed by other actors in the value chain. We have stepped up engagement on the policy level to advocate in favour of the SRP standard with technocrats as well as policy makers. In the private sector, one fertiliser company has shown interest in working with us with environmentally safe fertilisers. In Tanzania, Wehubit – funded by Enabel – enabled us to expand our work in cooperation with Kilimo Trust to four additional irrigation schemes in Iringa, a major rice producing region. Explore more here.

We have also trained private Business Development Services (BDS) providers, such as Bongomin Group which has engaged 300 youth to provide professional labour in the rice sector, on the use of the SRP standard. To ensure the sustainability of our activities, we are building a pool of service providers who can continue to provide SRP trainings to other organisations and private companies that want to implement SRP projects.

For one such service, soil testing, we have not been able to develop a strong business case just yet, but we hope to engage youth to provide this service in the future. We have conducted soil testing, together with the Tanzania Agricultural Research Institute (TARI), for two farmer organisations in Tanzania (Uwamale and Magugu) to support farmers in the decision about the quantity and type of fertilisers to use. While the service itself is valuable to farmers, there is more work to be done on building a business case that’s strong enough to attract the private sector in soil testing.

Rikolto has also pioneered the testing of new approaches, such as Sustainable Rice Intensification which led to an increase in productivity per acre from 18 to 26 bags. Farmers also reported savings such as the reduction is seed use from 20kgs per 0.3ha to 6kg. Although labour costs were higher in absolute terms, these costs were more than offset by the increase in yields and other cost savings. Expansion of the System of Rice Intensification remains challenging as government policies have not prioritised this approach, however this is expected to change as water stress becomes more acute.

Inclusive business: The consumer perspective

In partnership with TARI, we have supported farmer organisations to put in place basic Quality Management Systems that enable them to deliver quality rice products that meet consumer demands and attract better prices in the market. We have also engaged with the East African Grain Council to promote Quality Management Systems. In this light, they have organised trainings to enable farmers to produce, process and trade in higher quality markets.

Inclusive business: The producer perspective

Our activities have also focused on supporting inclusive business models in the rice sector. In Uganda, we’ve been working with three big rice millers – SWT, Diner’s Group and Kingdom Rice – and connected them with rice cooperatives. These discussions have attracted this interest of the Microfinance Support Centre, which facilitates the access to finance for farmers to buy high quality and sustainable inputs.

To improve the market information available to farmers, we have worked with the East African Grain Council to set up a SMS system to which farmers can subscribe to receive market information messages – for instance about market prices - through SMS.

Enabling environment

Rikolto also supported policy work, such as the advocacy work by the Uganda Rice Millers Council to ensure the import duty was set at an appropriate level for rice sector development. We also funded a study supported by the Rice Millers Council to evaluate and recommend investments for future development of the rice sector, with a focus on mechanisation.

In Tanzania, we have been advocating with District Environment Officers to address critical ecological issues, such as deforestation and water sources management.

John Ereng
John Ereng
Rice Cluster Director in East Africa

Djalou Franco
Djalou Franco
Rice Senior Agribusiness Advisor