Capacity and business development of a district rice farmers'association - improved proposal In order to address the problems facing the rice farmers, Isoka District Rice Association (IDRA) was formed in 2009, by representatives of more than 700 rice farmers. The vision of IDRA is to improve the capacity of rice farmers in the district to operate as profitable business. The association wishes to create value for its members through continued provision of a number of business development services such as extension, training input supply, marketing, warehouse facilities, finance and other services. The project of IDRA is to improve the capacity of rice farmers in the district to operate as profitable business through provision of business development services. This will be done through establishing an office and secretariat to develop and improve services to farmers. Within the project a business plan was developed in which it is stated that IDRA has to find capital investment to build warehouses and trade finance.

This project proposal is the follow-up of the earlier introduced project 5551, which has been revised. The project of IDRA is to improve the capacity of rice farmers in the district to operate as profitable business through provision of business development services.The present proposal consists of two sections:
1. A proposal to enhance the capacity of the IDRA to render business development services to its members
2. A business proposal for a paddy rice trading warehouse

Isoka District Rice Association (IDRA) was formed in 2009, by representatives of more than 700 rice farmers from various agricultural camps in the district. The association was formed to spearhead rice specific issues and registered on 19th May 2009 under the Societies Act, CAP 119. The initial listing had 715 members (475 male and 240 female). The number was maintained for the whole of 2009 but presently they are at different stages of paid up status. The ultimate aim is to increase membership to at least 1500 in 2010. Structurally, the association includes the Annual General Meeting (AGM), Board of Directors, Management, and the farmers groups. IDRA has no full time staff and is currently managed by volunteering members of the board. The organisation does not have own offices at present and uses volunteer member’s premises for meetings and coordination. 

The project of IDRA is to improve the capacity of rice farmers in the district to operate as profitable business through provision of business development services. To promote research, production, processing, marketing and distribution of rice produced in the district of Isoka.
The mission of IDRA is to improve the income of and empower the rice farmers to produce and market quality rice that meet competitive quality standards in Zambia and the export market.

IDRA is currently participating in the implementation of a production, income and employment programme in the rice value chain and has in the past facilitated agronomic practice training for rice farmers, this with the technical assiatnce of SNV. This includes development of farmer to farmer extension systems and demonstration plots. IDRA has also acquired learning for implementing marketing programmes and is presently participating in the bulking centres and warehouse receipting programme facilitated by SNV.

Isoka District Rice Association assists its members by providing services that improve their rice farming, trading and processing business. The association also caters for social inclusion of groups, such as women, youth and HIV/AIDS affected members. The organization helps the poor, underserved, or marginalized groups in the community by having specific programmes targeted at the special groups. We recognize in our constitution a quota of 1/3 leadership positions reserved for women and mainstream environmental and HIV/AIDS education in our programmes. The association wishes to create value for its members through continued provision of such services as:
1. Facilitate bulk procumbent of inputs through business arrangements with suppliers
2. Lobbying for better government extension services to assist farmers to practice more productive rice farming methods
3. Lobbying for infrastructural development to ease access to both inputs and markets
4. Disseminating knowledge among the farmers so that they develop peer to peer extension services to supplement government efforts
5. Link farmers to new technology that improves efficiency in production 
   and product quality. Such linkages are with private companies,     Government institutions, learning institutions and NGOs. The impact of    the technology together with the better farming practices is to reduce    the cost of production while at the same time improving the quality,    thereby making the Isoka rice very competitive in the market
6. Negotiate and enter into contract farming arrangements with buyers to  enable farmers better access both inputs and profitable markets
7. Adopt models that improve access to more profitable markets such as    the warehouse receipting system that provides farmers with access to    storage and credit to allow them to keep their product while they    search for better paying markets
8. Promoting savings amongst farmer groups using the Savings and Credit 
Cooperative (SACCO) system to support the warehouse receipting system with a source of borrowing. Ultimately this is aimed at developing into village bank.
9. Linking and negotiating with services providers for specific packages for the farmers such as insurance, banking, transportation, access to    information and others
10. Participating in private sector led for a as a way of profiling rice     farming activities in Isoka and open up opportunities for the farmers. 

This will help IDRA and its members to be more recognised player in the value chain and improve bargaining power and chain relations

To be able to provide these services and address the challenges, the association requires assistance to establish a management team, and service office for rice farmers that will run all administrative duties. Besides being a secretariat for the organisation, the unit will also be the launching pad for various business initiatives the association wishes to undertake in order to improve self-reliance and ensure future sustainability.

To enhance capacity for service provision to members, Isoka District Rice Association would like to apply for grant funding for office operations, employment of full time staff. This is an initial stage to more business oriented financing that will be sought once operational issues are addressed. The funding should specifically be for:
1. Recruitment and remuneration an agri-business manager (who is also a field and marketing officer) and bookkeeper for two years
2. Motor cycle for field work
3. Bicycles for use by lead farmers to reach members with extension services

The funding will assist the IDRA to realizes higher level socio-economic objectives as set in the capacity building arrangement with SNV. These include:
1. Raising production to 3MT per farmer with an average income of ZMK3   600 000 (USD800) per annum from rice farming
2. Improve the average yield per HA from the 2007 0.9MT to 3MT by the   2010/2011 season
3. Contract farming arrangement for # small scale farmers and Nzia Mills
4. Increase 8 SACCOS capital base by 300 euro each 
5. Establish a rice warehouse supported by 5 collection centres across the District 
6. Creation of employment opportunities for people in our local  communities to engaged in the cultivation, harvesting and processing     of rice.
7. Environmental conservation through better and more modern method of  rice farming.

The budget of de capacity development proposal is:
1. Year 1 in total € 23.000 for office rental, salaries and recurrent costs. In year 1 member contribution in kind (additional) = € 4.500.
2. Year 2: in total € 14.750, of which € 7.350 is asked from Agriterra and the other half ( € 7.400) is covered from the rice business.  In year 2 member contribution in kind (additional) = € 4.500.

IDRA proposes to establish a warehouse receipt system for rice. In the first two project years (2011 and 2012) DRA want to implement a simple trading model. For this business IDRA asks for a grant of € 58.000 to finance construction/refurbishment of 10 collection centres, warehouse equipement and a motorvehicle. It als needs a working capital (loan) for the purchase of 500 MT of rice and the rental for the 1rst 6 months (€ 93.000).

Consolidated budget:

Year 1: € 27.500 capacity development (Agriterra € 23.000)
Year 1: € 58.000 investment grant (Agriterra 58.000)
Year 1: € 93.000 working capital

Finance need: € 178.500 (grant € 81.000)

Year 2: € 19.250 capacity development (Agriterra € 7.350)
Year 2: no additional investments

Period: 
1. capacity development: € 46.750 (Agriterra € 30.350, sale proceeds      € 7.400 and members € 9.000))
2. investment: € 58.000 (Agriterra: € 58.000)
3. working capital  € 93.000 (bank)
4: total: € 197.750

The project proposal contains a cashflow statement.

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