The aim of this study is to find out the dynamics of rice supply chains and their impacts on the small-scale rice producer in Magugu village. The problem addressed in this study is the changes in the food trading paradigm and how it is shaping power relations at a local level. The empirical material in this study has been collected during a fieldtrip to the Babati district in Tanzania from the 25th of February to the 19th of March (2008). The First Mile Project (FMP) in Tanzania had the purpose to teach farmers how to build more equal and efficient supply chains and linking the producer to the consumer. A comparison between a regular rice supply chain and one involved in the FMP was made to explore how the two was forming in the changing food trade paradigm and how the farmers were adapting to this fact. Several methods were employed in this study. These include: case study method, qualitative methods, and secondary data. The results in this study was analysed with the use of the Global Value Chain (GVC) analysis and the Network theory. The conclusion was that depending on how the networks and the power relations within them, actors in the leading position in the GVC determines how the product is going to be: produced, processed, and marketed, at what time and to what price and establish requirements of the GVC. The rice farmers involved in the FMP were the once most able to adapt to the requirements of the GVC and food trading paradigm because of the cooperation among the group and good relations with other actors along the supply chain.