Regional Markets

3 Cases
RUDI empowers micro–small enterprises (MSE) and farming communities through
improved market linkage and distribution channel for their products. Its activities are
targeted to building strategic partnerships and strong business associations especially
within farming communities that can: formulate and advocate policy reform measures;
improve market linkages through Warehouse Receipt Systems (WRS) and through
information sharing; facilitate access to credit; and, expand crop/product through business
skills management training. These integrated activities are designed to empower
MSEs/farmers group to help reduce poverty through wealth creation in rural and
urban communities. They consist of: conducting business management training for
MSE/Farmers; improving the policy and regulatory environment for MSEs/Farmers;
improving and diversifying added value crop production; creating farmers/business
associations and strengthening a Savings and Credit Cooperatives (SACCOs) network;
and, broadening MSEs/farmers’ access to markets and increase international trade in
agricultural commodities.
The rice farmers and operators hire many labourers to work in the fields, employ people
to transport commodities, sell to local traders or to mills. An intricate network of
brokers, wholesalers, touts, middlemen, and retailers is responsible for transporting the
product to the end consumer. Overall, there are up to 35 cash transactions involved
in this entire process, making cereals extremely good crops for stimulating economic
activity. RUDI carried out a baseline study in the cereal producing regions of Morogoro
and Mbeya (specifically in Kilombero, Handeni, Iringa and Mbarali districts) in order
to investigate how farming communities in these regions can be empowered through
improved market linkages and distribution channels for their products.
Farmers producing cereals sell part of their harvest immediately, keep a part as seed for
the following year, to feed their family and as in-kind savings when cash is needed. As a
result, commodities are sold at different times throughout the year, with varying prices.
As cash is always short right at harvest time, nearly all farmers will sell some (if not all)
of their harvest to traders. As a consequence, farm prices are lowest in the period just
following the harvest (from May to August) and then rise gradually through the year.
Cereals are milled and hulled in or close to the production areas to reduce transport
costs. Occasionally farmers or traders go to a larger mill in an urban area, but usually
they prefer to have it processed close to the point of purchase. Commodities are sold to
traders either at farm gate or at nearby spot markets.
The cereal value chain
Although most cereals are primarily consumed within the producing households, the
main commercial forces driving the cereal business are the urban food markets, with
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