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Rice in Zambia Contracting with Small Holder Producers

Rice in Zambia Contracting with Small Holder Producers. Frontier Grinding and Packaging Dixon M. Chanda MANAGING DIRECTOR. Situation before local sourcing. Market Commingled rice, no choice for quality in buying (Paddy prices US$0.19/kg) Ad hoc selling of Paddy rice to traders Producers

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Rice in Zambia Contracting with Small Holder Producers

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  1. Rice in ZambiaContracting with Small Holder Producers Frontier Grinding and Packaging Dixon M. Chanda MANAGING DIRECTOR

  2. Situation before local sourcing • Market • Commingled rice, no choice for quality in buying (Paddy prices US$0.19/kg) • Ad hoc selling of Paddy rice to traders • Producers • Loose farmer association, sales done individually • Low number of Rice Association members 400, whereas potential is 2,000 • Low per capita production (1.5MT per farmer per year) • Low productivity 0.9MT/ha • Farmer Income below poverty datum line (US$237 per annum)

  3. Business Case • Opportunity: farmers • Fair market at farm-gate US$ 0.25/Kg • Opportunity: processor • Ease of transport: US$ 267/5MT • Higher volumes to penetrate local market • Opportunity: farmer & processor • Stable source of required volumes of stock -150MT -> stable market for farmers • Favourable prices –> possible higher returns • Mitigation of the effects of seasonal price variation

  4. Rice Value Chain including Frontier Financial:ZATAC, Woord en Daad CDS: SNV, MACO Wholesalers:(Ex-Calibre & IDRIS Patel in Copperbelt ) Consumers:Several Producer:Chambeshi Rice Farmers Association Processor: Frontier Grinding and Milling Exploring export market Retailers:2 local supermarkets, 5 shops, 3 Govt. suppliers, 7-open air vendors 4Transporters Lobby & Advocacy: Zambia Rice Federation Thickness of arrow indicates volume of transaction CDS = capacity development services

  5. Impact

  6. Lessons • Producers • Empowerment of producers enhances business relationship • Processor • Mutual business trust between producers and buyers is cardinal for growth/development • Enabling environment • Extension services critical for quality of rice and improving yields

  7. Challenges • Rice Value Chain • Improve quality/variety of paddy rice • Enhance knowledge/skills of producers through affordable and reliable extension services • Market conditions • Avoid market distortion through cheap imports • Reduce high cost of doing business (commodity branding, transport, etc) • Improve condition of financial services from commercial banks

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