1. Uganda: Imported rice levies encourage local production

| June 9, 2008

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On his single acre of land, Ugandan farmer Geoffrey Bisubirwa can grow enough rice each season to earn 150,000 Ugandan shillings – the equivalent of 100 American dollars, or 60 Euros. This is a pretty good return, given that a farmer would get less than 75,000 Ugandan shillings – about 50 American dollars or 30 Euros – for growing maize, one of the most common crops grown in Uganda.

Up until a few years ago, Geoffrey Bisubirwa would not have been able to sell his rice, because the local market was flooded with cheaper rice from countries such as India, Vietnam, and Pakistan. Governments in these Asian countries subsidize rice production. Meanwhile, rice production in Uganda was on a downward trend in the 1990s after the government, like many African governments, sharply reduced or eliminated duties on imported rice, as part of a global push towards market liberalization.

But in 2004, the East African community – a loose grouping of five countries including Uganda, Kenya, Tanzania, Rwanda, and Burundi – decided to re-instate duties on imported rice. The import duties are putting a smile on the faces of Ugandan farmers, and giving them a reason to grow rice again.

In fact, Ugandan farmers are growing much more rice. The Ugandan Ministry of Trade projects that rice production will hit the 180,000 metric ton mark this year, up from 135,000 in 2006, and 100,000 in 2005.

Okasi Opolot is Uganda’s Commissioner for Crop Production and Marketing. He expects that rice imports will soon come to a halt. The Ugandan government further expects to boost its rice exports to areas such as southern Sudan and eastern Democratic Republic of the Congo, becoming the food basket of the region.

Mr. Opolot acknowledges that levies on imported rice are against the policies and advice of the World Bank and World Trade Organization. But he is quick to add that the same organizations have failed to rein in other countries’ subsidies.

Nevertheless, the Ugandan government is preparing for the day when it may be pressured by the World Trade Organization and World Bank to re-open its markets to imported rice. The government is investing in research of new rice varieties that could out-compete imported rice on the basis of quality.

Dr. Ram Chaudhary is the project manager for New Rice for Africa, known as NERICA. He says that a new rice variety called NERICA 10 will give imported rice a run for its money. According to Dr. Chaudhary, the new rice re-introduces a scent and taste preferred by Ugandans, which is not found in any imported variety. He says NERICA 10 should be able to edge imported rice out of the market, even if import duties are removed in the future.