Success Story: Eastern Rice Company Ltd
In Uganda, Uganda Development Trust (UDET) has been providing business development services to Eastern Rice Company Ltd (ERC) a private limited liability company based in Tororo District. The Company is engaged in large-scale rice growing and processing. ERC has a nucleus farm of 2,000 acres of which it utilizes 500 acres and leases the rest to out-growers each getting an average of 1.5 acres. Although the company was registered in 2009, the rice mill was acquired in 2014 and installation and commissioning done early 2015 when milling eventually began.
ERC has on site a 60 ton per day fully automated rice mill with a color sorter, a 6,000-ton capacity warehouse, offices, there is also various farming equipment like tractors, planters, combine harvester and post-harvest handling equipment.
ERC has an out-grower network of 3,000 smallholder farmers organized in 120 farmer groups (each group has an average of 30 members). The farmer groups are in Iyolwa, Magola, Molo, Merikit, Osukuru, Mulanda, Nabiyoga, Rubongi, Petta, Paya & Sopsop sub-counties, Tororo District. Each of the farmer groups has a 7 member executive team that consists of a chairman, secretary, treasurer, and mobilizer. The groups are registers as Community Based Organizations at district level.
ERC also uses demonstration gardens as a training tool and was able to set up 15 demos last season and proposes 8 demo gardens this season. Each of the demo gardens measures 1 acre and are located at Magola and Ilyowa sub-counties.
Rice, being a seasonal crop, ERC has established tree nurseries from which members are provided with free eucalyptus and seedless orange tree for free to keep them busy and earn extra income in the long run.
Ayo Mary Justine is a widow with 4 children living in Tororo and a member of the Makmot farmer group which started in 2002 with 30 members. She was weary after the death of her husband and didn’t know how she would support her young family through school, pay for medication, and feed them; eating three meals a day was a challenge. She couldn’t afford to pay UGX 15,000 required per child in the local Universal Primary Education School, at the time, the children spent half the time they should have been at school at home for lack of school fees. This affected their performance at school and after a while, the children detested going to school. She also hadn’t identified a profitable crop to grow that would support her family. Rampant drought and weather vagaries affected farm yields and made farming challenging for Mary. The fields were over cropped and fertility was waning. She had no access to funds to hire labor to open land and weed her garden. Rice yields at the beginning were as low as 500 kilograms per acre and it was cumbersome selling rice to Kampala traders who were unscrupulous with their inaccurate weighing scales. Poor Post-harvest practices where food was dried on bare ground led to spoilage and fetched low prices in the market hence Mary had no savings.
With technical assistance from UDET under the Market access program funded by AGRA, Eastern Rice Company (ERC) brought together 25 women and 5 men and formed them into a group that would benefit from the various programs it was implementing in the area that would target people such as Marry. Each member had to have access to at least one acre of land. ERC has trained Marry together with her group members in rice agronomy and postharvest handling, as an enterprise rice gives more money than comparative enterprises like maize, sorghum, and chili. It has also availed credit that facilitated group members for land opening, access to improved seed, access to genuine fertilizer, weeding, and harvesting expenses. The farmer group was taken through VSLA training and consequently, they were able to start a VSLA in their farmer group and the members were able to open an account with DFCU having saved UGX 8 Million shillings.
Through ERC interventions, rice yields have grown from 500 kilograms to 1,600 kgs per acre hence tripling production and gross income from UGX 500,000 to UGX 1, 600,000. Access to fertilizer and improved seed and agronomic training has driven improved yields. The family can comfortably afford three meals a day and paid medication when they fall sick. Mary has been able to take all her lastborn to a private school where they pay UGX 48,000 much higher fees than the 15,000 she couldn’t afford to pay before while her eldest son is in Kampala pursuing a course in plumbing. The Makmot Group was able to save UGX 8 million shillings in 2015 of which they banked with DFCU Bank and have been able to borrow from DFCU using their savings as collateral. Members now save between UGX 1000 and UGX 5000 weekly.
Several strides have been made to increase production and productivity by the members at Makmot farmers group, however, more work needs to be done in the areas of access to mechanization and storage of produce. AGRA support through a UDET led consortium of implementing partners will focus on working to address some of these challenges.