Abstract:

Rice has now become one of the government's strategic crops for ensuring food security and
alleviating poverty among the rural poor in the country. It has comparative market advantage
and rate of returns (output: input ratio of 1:1.83; NAADS, 2004) over other crops especially
cereals in Uganda. Owing to the high rate of return, farmers and rice millers have therefore
taken considerable interest in the rice industry. They consider it as a food security crop and an
income generating enterprise. Due to the economic importance of the crop, rice production has
now being embraced by 64 of the 80 districts in the country. The non traditional rice growing
regions of the central and western have taken up the enterprises very seriously. Since 1981
there has been steady increase in local rice production from 14,667ha to an estimated figure of
183,350ha in 2008. Consequently the number of small scale rice milling enterprises has
increased substantially from about 156 units in 2001 to about 591 units in 2007 (mainly the
poor performing engleberge and mill-top types) spread throughout the country, 61% are in the
eastern region (Candia et. al, 2008). Such a rapid adoption of rice enterprise (from production
to the rice milling sub-sector by the private sector) demonstrates its potential of being one of
the key national enterprises for the government to meet the millennium development goals
among the rural population in the country. Despite the tremendous increase in rice production,
the country still imports large quantities of rice which stands at about 45,000 metric tons
(Oryokot et. al, 2004) costing the country hard earned foreign cash to a tune of about US$ 45
million. Unfortunately the local rice processing industry is facing a lot of challenges. There is
high grain loss during various post harvest processing operations and low quality grain which
inevitably compromises its wholesomeness, nutrition and market value. The locally processed
rice has high percentage of broken grain and foreign matter especially stones. The highlighted
constraints therefore render Uganda's rice less competitive with the imported rice.
Consequently, the local farmers and rice millers cannot effectively access niche markets in the
urban centers like Kampala, Jinja, etc where quality and quantity issues are paramount.