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

5. Impact Impact area Before sourcing After sourcing Producer income per 50Kg bag ( guaranteed payment on delivery ) US$ 4.5 US$ 12.7 Paid-up membership 4001500 Paddy purchased 20-40MT 130 MT Farmer income/year US$237 US$ 800 Productivity0.9MT/ha2.5MT/ha Company turnover US$ 10,000 -20,000 US$ 35,000-40,000 Company employees 25 Local transporters - 5MT load per trip 14 Vendors of polished rice 3 locally 15 outlets locally and nationally

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