Business Opportunity in Cameroon (Rice Project)

U&I is happy to announce the rice project over 1,000 ha of land in the south west region of Cameroon as an opportunity for those who are seeking for venture with high growth and returns. The promoter of the above project is Camrice ltd in which U&I is a consultant to the project, Camrice is a newly establish company and it is seeking for partners with whom the can take the venture.

Below is the executive summary of the project for your review.

Introduction
Global and National Context
The high demand for food brought about by the sustained growth of Asian economies and skyrocketing and unstable petrol prices led to grain shortage and an increase in cereal prices on the world market. Indeed, global stocks have experienced their lowest level in a quarter of a century. This resulted in the crisis of high living costs which manifested in social upheavals in Cameroon during the first quarter of 2008. Despite the current petrol prices, many analysts are of the opinion that cereal prices will remain high for along time.
Faced with this situation, the meeting of the council of Ministers of the Africa Rice Center (WARDA) member states held in Abuja, Nigeria in September 2007 sounded the alarm by drawing the attention of the international community to the fact that Africa, in spite of being home to just 12% of the world population, draws in 32% of world rice import and has a high growth rate of consumption at 4.5% per annum. The council also stated that in Central Africa rice imports increase 14-fold between 1961 and 2007, rising from 32,100 to 470,974 tons while cereal production per inhabitant reduced from 157 to 84.9kg.
The Council recommended that an urgent special program be implemented; the program is called the Coalition for African Rice Development (CARD). The National Strategy for the Development of Rice Growing (NSDR) was also developed in response to this concern.

Objectives
Main objective
To build sustainable increase in domestic rice production in 1 pilot country in sub-Saharan Africa (Cameroon)
Specific objectives:

1. To introduce and improve on the production of the NERICAs thereby improving food security of subsistence farmers,
2. To increase household income of subsistence farmers,
3. To improve nutrition conditions of subsistence farm households,
4. To decrease rice importation by introducing nericas,
5. To empower women farmers,
6. To diversify agricultural production based on NERICA farming,
7. To develop agro-industry based on NERICA,
8. To establish sustainable NERICA based farming.

Expected results

To mitigate the possible rice shortages and to reduce the need for rice imports and the associate drain on foreign currency reserves in the sub-Saharan region.
The Initiative will enhance rice production in each target country by 5 to 10% by participating farmers as compared with 2006 production levels during the initial phase. Farmer training on improved integrated rice management practices, rural radio and videos will have a lasting effect on farmer productivity and the quality of the environment. This effect will be especially visible in lowland rice systems.

Target groups: Farmers, researchers, commercial multipliers, processors, producers
Beneficiaries: Farmers, Consumers etc.
Main activities: Production, Training in rice production (Rice Field School), Traning communty based seed producers.

National production and consumption trends, their importance in rural earnings, economic growth and food security
Rice is the staple food for rural and urban population in Cameroon. National demand was estimated at 300,000 tons in 2009, essentially covered by imports. According to the latest household consumption survey (ECAM 3, 2008), average rice consumption per head in Cameroon in 2007 was worth FCFA 11,180 that is 23 dollars in urban areas for towns more than 50,000 inhabitants, FCFA 5,817 that is 9 Euros in rural areas, the national average was FCFA 7,709 that is 16 dollars. Taking an average price of FCFA 300 per kilogram, this consumption would be around 37.3 kg in urban areas, 19.4 kg in rural in rural areas and 25.7 kg per inhabitant for the national average. According to the survey, around FCFA 138 billion that is (276 million dollars) devoted to the purchase of rice in the food budget for households against FCFA 112 billion in 2001 that is (224 million dollars), representing an increase of about 4% per year.
National production is estimated at 100,000 tons of paddy grown on 44,000 ha each year. Most of this production comes from irrigated schemes in the North West and the Far North regions which are far away from the centers of consumption in the South of the country (Yaoundé and Douala). About 145,000 farmers are involved in producing rice, which mainly is exported to neighboring countries (Nigeria, Chad and the Central African Republic).
The Far Northern region produces around two-thirds of the country’s rice. It is estimated that the number of people directly living off rice growing activities is 180,000, in 27,000 households and 3000 other actors. (Agricultural workers, business people, retailers, hulling machine operators, suppliers of inputs, sellers of packaging material etc)

Constraints of rice production in Cameroon

Despite the magnitude of the investment, production of rice in Cameroon only meets 20% of domestic demand. Several factors can help explain this situation
- High cost of production of irrigated rice that requires considerable investment for the development of production perimeters or basins.
- Location of three major production facilities far from the major urban centers (Yaoundé and Douala) and close to border market (Nigeria, Chad and Central African Republic)
- Preference by consumers in the southern regions for long grain which is imported for its superior quality (these varieties can as well thrive in Cameroon rice ecology)
- Lack of promotion of other types of rice production, especially in the southern parts of the country.
- Biotic and abiotic constrains (pests, diseases, weeds etc.)

Importance of Introducing New Rice for Africa (NERICA)

The time has come to scale -up operation to reach many more farmers in sub-Saharan Africa (SSA). However, more is required than just promoting the Nericas. Environmental problem in SSA are becoming acute. Already, depletion and degradation of the natural resources are widespread, cultivated soils are losing their natural fertility and subject to erosion due to over-exploitation, and tropical forests are being destroyed at an increasing rate. Complementary technologies (for example, to maintain soil fertility) and enabling policy and market environment are needed to make Nericas work. NERICAs are seen as a catalyzing element to (a) reduce risk and improve the productivity of rainfed production system and (b) conserve and ameliorate the environment by improving the sustainability of rainfed production system and reducing pressure on fragile environment in West and Central Africa (WCA).
Nericas is the fertile progenies from crosses between Asian rice, O.sativa and African rice, O.glaberrima which was carried out in the early 1990s at WARDA the rice center in Africa. About 3,000 NERICA lines have been produced so far. NERICA characteristic include easy harvesting and threshing, local consumer-acceptable cooking and eating qualities, and better resistance or tolerance to drought and soil acidity. Many of the NERICA lines have also shown resistance against major African endemic insect pests and disease, such as AFRGM (African Rice Gull Midge) and RYMV (Rice Yellow Motte Virus). A number of NERICA lines have rapid early vegetative growth, making them more weed competitive and improving the productivity of scarce labor. NERICA protein content is generally high. Moreover, NERICA generally have shorter growth duration than most traditional rice varieties.

ORGANIZATION

The promoter of the above project is Camrice LTD, it intends to cultivate NERICA species of rice over 1000 ha of land in the Southwest region of Cameroon and later move to other countries in the Central Africa. The objectives are to promote NERICA rice and supply of seeds to local farmers and provide quality rice to Cameroonians. In South west region Otto has already undertaken a rice project over 2 ha of land for the NERICAs and the results were goods and it intends to expand the project over 4 pilot countries while starting in Cameroon.

Investment Objectives

The investment objective is to promote the NERICAs species and producing large quantity of milled rice, rice seeds for the farmers and thus lead to wealth creation for the farmers and also to maximize the investment of partners. The fund asset allocation will concentrate in the feasibility study, purchase of equipment, setting up of plant, construction of processing units, office premise, health centre, vehicle and working capital. The total cost of the project is 2 billion franc cfa with a return of investment of 50%.