Risks and Uncertainty from Climate Change affect Actors along the entire Rice Value Chain

A new collaborative study conducted by the Economic Policy Research Centre (EPRC) and the International Institute of Sustainable Development (IISD) has revealed that risks and uncertainty from climate change impacts the entire rice value chain. The study was code-named; ‘Private sector investment in a changing climate: Resilient rice value chain development (PSI-Climate).

The study focused on rice value chains since rice is one of the priority crops for the Government of Uganda in improving food security and household income. The research was conducted through two case studies on domestic private sector investment. This involved Equator Seeds Ltd, a domestic seed company investing in new rice seeds in Northern Uganda and Centenary Bank, a commercial bank providing financial services for rice value chain actors in Eastern Uganda.

Among the impacts of climate change included the increased drought frequency and intensity, rising temperatures, and change in seasonal rainfall distribution. The most significant finding was the impact of floods on rice value chains. In inputs, floods resulted in a reduced quality of rice seeds and delayed deliveries. For production, there were reduced yields, destruction of crops and reduced quality among others. At the consumption end of the value chain, floods resulted in reduced food availability and higher food prices.

For the value chain actors such as farmers, millers and traders, there were three major factors in managing climate risks. The value chain actors noted a need for diversification of crops, products and income sources. Informed decision making, planning and preparedness for shocks were issues of importance to them. Finally, there was a need to ensure rice supply and quality.

The study concluded that climate change impacted the entire value chain. One of the lessons learned was that the domestic private sector has a role to play in supporting Climate risk management along agricultural value chains. Other lessons included the integration of climate change into policies and strategies, the involvement of SMEs and commercial banks and finally a need for climate information was a necessary input for the mainstreaming process.