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For the development of rice production in sub-Saharan Africa, it is critical to improve the quality of domestic rice produced and sold in the market. Being at the entry point in the upstream of the postharvest marketing chains, rice mills hold the pivotal position in the improvement of rice quality. Based on data collected from rice mills all over Uganda, this paper presents the evolution of the rice mill industry in the last two decades. It looks into the present state of rice mill operation, examines the structure of the rice milling market, analyzes the cost and returns structure of rice mill operation, and discusses the future directions of the rice mill industry. The rice mill industry in Uganda has developed at a remarkable pace since the early 2000s. The high profitability of rice milling business and a low entry barrier facilitated small scale rice mills to have grown rapidly. Rapid increase of the number of rice mills still continues particularly in newly emerging rice growing areas but the growth begins to stagnate in traditional rice growing regions. The majority of rice mills are small-sized but some large-scale ones have been emerging. In traditional rice growing regions, the rate of milling fee is declining due to increasing competition and begins to reflect the difference in rice quality. Under the scale economy inherent in rice mill operation and growing quality consciousness in the rice milling market, milling machines would become larger and more sophisticated replacing the current competitive milling market with oligopolistic one. It is important to develop efficient small to medium scale milling system with emphasis on quality improvement features such as de-stoning and grading so that small scale rice mills can be competitive step by step countervailing against the scale economy of large scale rice mills. Key words: Break-even scale, milling fee, rice quality, rice value chain, scale economy.

JICA Rice Technology Advisor

JICA Rice Technology Advisor

JICA Rice Technology Advisor