Increased market power The company assessment of Mwea Rice Growers Multipurpose Co-operative Society Ltd. (MRGM) was conducted in the week from 14 to 19 April 2014. The assignment aimed:
 
•	To achieve an in-depth understanding of the practice and performance of MRGM.

If the assessment gives enough confidence to continue, objectives were:

•	To jointly develop an action plan/strategy for Agriterra’s Agribusiness team’s support to Mwea Rice Cooperative.

The mission team concluded:

•	MRGM has a good business track record and meets criteria for management, governance, finance, internal procedures etc.;
•	There is a clear business case;
•	According to the mission team, key is to increase supply by members (economies of scale) while at the same time working on marketing. 
o	In order to get higher rice volumes, MRGM has to compete with brokers who pay cash. In its cash flow forecast, MRGM should find an optimum between its own liquidity needs and the financial needs of members. Moreover, member communication or “member marketing” could be improved. Key question: what are the advantages of being member of MRGM? 

•	Financial management is at accurate level, but new business opportunities will also require organisational development, i.e. financial management.
o	MRGM is financially healthy. 
o	In particular cash flow is a challenge
o	Financial procedures are in place
o	Much work is done manually

Recommendations:

o	Elaborate a financial procedures manual 
o	Include a written conclusion on the financial reports to management
o	Elaborate a more detailed cost price calculation (hourly rate or per acre) for the use of tractors and other machinery
o	Elaborate a new strategic plan including a financial forecast for the next 5 years and update it every year in an annual plan
o	Need of new software package for financial bookkeeping (in process) and make sure there is a perfect start with the new accounting package. Follow the recommendations of the external auditor based on the financial statement for the year ended 31 December 2013, point 9: Accountancy

•	Governance and management are on adequate level. 
o	Adapt by-laws
o	Define ways to train young members to be active in the cooperative (youth council)
o	Marketing committee is operational, but cannot play a satisfactory role in such a competitive sector

•	Relationships with buyers and financial institutions are good. 
o	Taking into account how competitive the rice market is, more frequent contacts especially with supermarkets is advised.

In conclusion, the mission team advises Agriterra to start up partnership with Mwea Rice Cooperative.

The mission team who conducted the company assessment defined the following areas in which Agriterra could support:

•	Assistance in designing and implementing of new accounting software;
•	Training financial management and cost price calculations
•	New strategic plan including financial forecast;
•	Optimising cash flow planning in relation to needs of members;
•	Improved marketing/communication to members in order to get higher volumes of rice;
•	Elaboration of new marketing plan;
•	Generally, cost price must decrease both on cooperative level as on farmer level. On farmer level, this may be achieved by mechanisation and increased yields per acre. At cooperative level, increased volume of rice, efficient use of machinery and efficient use of available human resources are factors to improve.

See further draft action plan.

Increased market power for MRGM