Page 1

Crops that make you a millionaire quickly

Theme: Promoting Agro-Technologies to enhance food security and competitiveness in the regional Markets

Increasing production through

technology Irrigation; mechanisation: vital to achieving food security How Uganda will become a regional

food basket

Lion Assurance launches Agri-insurance


Sugar & Allied Industries Limited has already signed up 5000 outgrowers. We have developed an active support system where we provide training and give soft loans via equipment and seed cane to support them and give them a proďŹ table crop. We are already looking to sign on 5000 more. Together, we can ďŹ ght poverty with agriculture.

alam@alam-group.com www.alam-group.com


1

Publisher’s Word Source of the Nile Agricultural and Trade Show magazine is produced and published by the Uganda National Farmers Federation and the East Africa Agribusiness Magazine Ltd and is the official Show Magazine.

Publisher

F

ALL CORRESPONDENCE TO: East Africa Agribusiness Magazine Ltd P. O. Box 33752, Kampala-Uganda Tel: +256 414 223 471 /+256 200 902 012 Fax: +256 414 223 475 Email: info@ea-agribusiness.co.ug Website:www.ea-agribusiness.co.ug Rwanda: Agri Publications Ltd P. O. Box 2227, Kigali, Rwanda Tel: +250 788 306 052 Email: rwanda@ea-agribusiness.co.ug Website: www.ea-agribusiness.co.ug In association with:

Uganda National Farmers Federation P.O. Box 6213 Kampala- Uganda Tel: +256 414 230705 Email: unfa@starcom.co.ug Website: http://www.unffe.org

Team C.E.O Managing Director Managing Editor Editor Sub Editor Advertising Manager Project Head Design & Layout Administrator Sales Officers

Godrick Dambyo Jennifer Nalubega Patrick Matsiko wa Mucoori

Moses Sserwanga Patrick Kagenda Jessie Hamala Luke N. Kasolo Peter Mugeni Joanne Kukunda Cliff Tigawa, Kasibin Francis Mutaka, Muwonge Razac

To advertise in the next issue, call:

+256 414 223 471, +256 200 902 012

or send an email to: info@ ea-agribusiness.co.ug Opinions expressed herein represent views of the authors and do not necessarily reflect views of East Africa Agribusiness. All rights reserved. No part of this work may be reproduced or transmitted in any form or by any means, electronic or mechanical, without prior permission in writing from East Africa Agribusiness

www.ea-agribusiness.co.ug

About the UNFFE Source of the Nile Agricultural and Trade Show

July 2013

rom 8th-14th July 2013, the Uganda National Farmers Federation (UNFFE) will hold its 21st Agricultural and Trade Show at the Source of the Nile grounds in Jinja. The six-day show is being organized under the theme: “Promoting Agro-technologies to Enhance Food Security and Competitiveness in the Regional Markets.” With Uganda considered the food basket for the regional market, emphasis is now shifting to encouraging farmers to embrace agro-technologies in order to enhance production and productivity. Despite the high costs of adopting such technologies, the entry of Rabo Bank (now part of dfcu Bank) coupled with the products operated by other local commercial banks: Centenary bank, Stanbic Bank (though Stanbic supports large scale farmers) and Micro Finance Institutions (MFIs), the agricultural sector is destined for better times. The continued call by government to farmers to adopt high tech farming methods is a clear message that for the Ugandan farming community to reap better dividends from agriculture, there is a need to change from subsistence to commercial farming. With the changing global weather patterns, the only way agriculture will remain relevant to Uganda where it employs over 70 percent of the population, is through adopting agro-technologies including irrigation. The growing threat from global warming and flooding that has of recent hit the coun-

try is such a reminder that farming needs to take a new dimension. The harvesting of rainwater for irrigation, increased use of green houses for farming, is one sure way of having all-year production which improves farmers’ household incomes. The commitment by government to support SACCOs (Savings and Credit Cooperatives Organisations) is another good measure to help farmers access credit to enable them invest in modern farming. With the allocation of Ushs 394.4 billion, which represents 3.4% to the agriculture sector in the national budget read on 13th June 2013 government is committed to addressing the requirements for agricultural transformation that will be part of the broader strategy towards making Uganda a middle income country. Government should therefore continue to dialogue with farmers, through the UNFFE, as the primary partners in the implementation and realisation of meaninful agricultural transformation for food security and poverty eradication. Over the past 20 years, the Agricultural Trade Show has moved from being a mere farmers’ event showcasing improved livestock species and crop yields to being a source of high tech agricultural farming equipment as well as markets for ready products for the local and export market. However, it is important to appreciate that as much as there are huge benefits the shows have created, the Ugandan farmers are not yet in the comfort zone. Working in farmer groups (co-operatives) is crucial especially for access to finance and other agro-services.

Godrick Dambyo

Chief Executive Officer, East Africa Agribusiness Magazine


UGANDA’S MOST RELIABLE SUPPLIER OF AGRICULTURAL EQUIPMENT


3

1 | Publisher’s word 3 | Message from the UNFFE President 4 | Word from the Ag. Chief Executive Secretary

08

Choosing the right tractor for your farm

10

Irrigation: Key to transformation of Uganda’s agricultural sector

14

How Uganda will become a regional food basket www.ea-agribusiness.co.ug

July 2013

16

Sugar cane policy is needed to improve quality of sugar Kaliro Sugar boosting agriculture

18

Lion assurance launches Agri-Insurance

23

How to access credit for agricultural production

25

Standards compliance boosts agribusiness

25

Minting money from poultry farming

25

Integrated soil fertility management

25

Oil palm growing uplifts smallholder farmers in Kalangala

28

Crops that make you a millionaire quickly


4

H. E. YOWERI KAGUTA MUSEVENI President of The Republic of Uganda July 2013

www.ea-agribusiness.co.ug


5

Word from the UNFFE President for the 21st National Trade and Agricultural Show 2013

O

n behalf of Uganda National Farmers Federation and on my own behalf, I welcome all development partners, readers, exhibitors, participants, organisers and the general public to the annual Farmers’ Week at Jinja Show Grounds under the theme: “Promoting Agro-Technologies to Enhance Food Security and Competitiveness in the Regional Markets.” The theme of the show has been chosen purposely to focus on improving Uganda’s agricultural products’ competitiveness on the regional markets for the majority of the small scale farmers who still majorly produce for consumption with limited surpluses for the market. In this show, people from all walks of life will be offered a chance to explore and learn about the different agro-technologies that can enhance agricultural productivity geared towards the regional markets (EAC, COMESA, and SADC) subsequently making Uganda the regional food basket. The show will therefore, offer a platform for technology, marketing experience and information sharing between the farmers, researchers, traders, manufacturers and the general

public from Uganda and the region. I would like to thank the government and in particular MAAIF for the continued support to the farmers at all levels and to request for increased support to the entire agricultural sector given its importance to the national economy. I would equally like to thank all our development partner especially NAADS for their support during the preparation of this year’s show. I equally thank the National Executive Committee, Show Board and Staff for their efforts in organising the Show. Thank you and enjoy the Show

Charles Ogang President, UNFFE

GREEN SPIRIT FORESTRY SERVICES

COMMERCIAL TREE PLANTING, EXOTIC FRUITS, FORESTRY MANAGEMENT, NURSERY MANAGEMENT

LOCATED IN MUKONO, OPP KAUGA, NEXT TO TOTAL PETROL STATION

TEL: +256 0774 743 062/ 0756 993 013 0701 162 332 www.ea-agribusiness.co.ug

July 2013

The theme of the show has been chosen purposely to focus on improving Uganda’s agricultural products’ competitiveness on the regional markets for the majority of the small scale farmers


6

Message from the Ag. Chief Executive Secretary to the Show Exhibitors and Goers

D

ear Show Exhibitors and Goers at this 21st Source of the Nile National Agricultural and Trade Show, it gives me much pleasure to address you all at this year’s Show. First and foremost, I welcome you and congratulate you on having managed to make it to the Source of the Nile Jinja Show Ground. I note with pride that the Show continues to play its important role of bringing together the different stakeholders in the agricultural sector to share experiences, learn from each other and exploit market opportunities. The stakeholders include players at all segments of the agricultural value chain. There are researchers, agricultural inputs dealers, farmers, agricultural extension providers, media and business development service providers like banks, traders and processors as well as consumers. This mix of stakeholders makes this Show a must-visit event. I am sure this is why the number of Show-goers keeps growing every year. I therefore, encourage Show-goers to make sure that they visit as many stalls as possible so that they can learn new things. I also appeal to the Exhibitors to make themselves available to the Show-goers so that they can benefit from their visit to the

The theme of the show has been chosen purposely to focus on improving Uganda’s agricultural products’ competitiveness on the regional markets for the majority of the small scale farmers

Show. In this way, the Show will fulfil its role of accelerating the adoption of the wide range of technologies exhibited there and linking producers to markets. I thank all Show exhibitors and goers as well as sponsors for this year’s show. I thank the Ministry of Agriculture, Animal Industry and Fisheries for its continued support and role in organising the National Agricultural and Trade Show. Finally, I wish to thank the sponsors of the Show Magazine 2013. I wish all of you a nice Show and let us meet next year in July 2014 at the same venue.

Augustine Mwendya Ag. Chief Executive Secretary

SIMLAW SEEDS COMPANY LTD

Associate of Kenya Seed Company Ltd Suppliers of top quality seeds of maize, various varieties of vegetable seeds, Agricultural chemicals and tools in the Great Lakes Region

Plant maize seeds from Simlaw that mature in

90-100days

Visit our branches in Nakivubo, Mbale, Kapchorwa & Masindi Plot 78-84, 6th Street Industrial Area, P. O. Box 21303, Kampala Tel: +256 417 130 151, Fax +256 417 130 150 Email: simlaw@simlawseeds.com Website: www. simlawseeds.com

Top Quality Seeds For the Great Lakes Region

July 2013

www.ea-agribusiness.co.ug


AGRICULTURAL MARKETING INTELLIGENCE SERVICES Keeping you at the front of dynamic markets Do you need to know todays Market prices for commodities you want to sell Or buy?

We provide you with market prices for 3-5 commodities of interest to you regularly on Your mobile phone and /e-mail.

Do you need to know whether somebody is buying or selling commodities you are Interested in and at what price?

We provide you with trade alerts from our trusted network of agents,buyers and sellers as and when they occur.

Do you need to make your product or service known to potential customers throughout Uganda or a particular region?

We market your products or services to our wide network through mobile phone SMS Advertising and information boards strategically located at shops and market Places.

Do you want to buy or sell your commodity Through AgriNet?

We link you to reliable sellers and buyers and organize secure and transparent transactions and payments.

MARKETS MONITORED We collect, analyse and disseminate real time agricultural market information from Local Markets Over 100 local markets on weekly/ monthly basis

Over 50 wholesale markets

International markets; Kampala, Busia, Katuna, Kigali, Juba, Nairobi, Mombasa, Arusha

FEATURED MONITORED CEREAL AND PULSES

FRUITS AND PULSES

Maize, Rice, Beans, Millet, Sorghum, Simsim, Soya beans, Sunflower, Ground Nuts

Pinapples, Watermelon, Passion fruits, Oranges

CEREAL AND PULSES

ANIMALS AND PULSES

Cabbage, Carrots, Tomatoes, Onions, Green pepper

Beaf, Milk, Pork, Goat, Poultry (Eggs, Chicken, local, Broilers, Layers)

Plot 209, Upper Mawanda Road, old Mulago Hill Kamwokya P. O. Box 22130, Kampala | Tel:/Fax +256 414 530 696


8

Choosing the

right tractor By Jim Middleton

for your farm

Mechanised farming does not only increase production but also improves quality of the crop. There is a variety of machinery used in the production process especially at farm level. The most commonly used machinery in farming is a tractor. Tractors too are of various types and a farmer needs to know which type he should buy depending on various factors like the terrain of the farm, type of crop he wants to grow, the amount of money at his disposal, among other considerations.

T

he initial choice facing a farmer may be a two-wheel (walking) tractor versus the conventional four-wheel tractor. There is a big difference in price between the two types, which is the reason the two wheel tractors have found favour from many governments and donor agencies. But does this efficiency in price translate into performance in the field? In 2011 the European Union commissioned a study into the effectiveness of two-wheel tractors supplied under an EU donor programme. After visiting around 50 farms in North Korea and Tanzania, the EU consultant concluded that the programme had not been very successful. There were several reasons for this. ■■ Two-wheel tractors are ineffective for draft operations (that happen below the surface such as ploughing) as they were unable to reach the required depth. Also the mouldboards exhibited very high rates of tear and wear and quickly became unusable.

■■ Almost all operators complained of the excessive amount of physical effort to operate the machines for more than two hours. ■■ The use of a single cylinder engine causes high level of vibration leading to components failure through fatigue. Of all the tractors examined, 95% were found to have failures on the exhaust silencers and air cleaners. The transmissions, belt guards and handlebars also suffered frequent failures. ■■ When used for transport, the trailer drawbar registered 100% failure rate, with many units having been repaired several times. This puts the driver at a risk of personal injury from being run over by the trailer when it fails. ■■ On sloping land, the large flywheel mounted on one side of the engine made the machines inherently unstable and overturning was a common problem. ■■ The fuel consumption was very high compared to output. There is a place for the two-wheel tractor

but this would be primarily using powered implements in the production of high value crops on a very small scale such as growing vegetables in a greenhouse. They are clearly not suited for large scale field use on crops such as maize, cotton, wheat and others. So having made the decision that a tractor with a wheel at each corner is desirable, what are the main factors that should affect the farmer’s choice? The single most important factor is availability of spare parts and service for the tractor. This is fundamental as every tractor will need spare parts and service. To import spare parts into Uganda from distinguished UK suppliers takes at least 5-7 days by courier. If they are imported from India or China, it can take over four weeks. A one-week delay for a

Mechanisation is crucial for modern farming.

July 2013


9 farmer from the optimum planting date is a long time. It can result in significant yield losses. It is therefore essential that the local supplier, for example in Uganda, has a large stock of spare parts. It is advisable a farmer looks for an established dealer who sells a large number of tractors each year. Basic economics dictate that even the most committed dealer cannot stock many spare parts if he is only selling a few machines. A farmer should insist on seeing the dealer’s spare parts store. If the dealer is reluctant to show you his store, it suggests he does not hold a large stock of spares. If you are satisfied that one or a number of different dealers can support the machines with spares and service, then the other factor affecting your choice will largely depend on your budget. New versus Used tractors: In a mature market, such as Europe, there is a vibrant market for second hand tractors as many large farmers will change their tractors every 2-4 years. There is plenty of good quality used tractors. However, in Uganda, very few companies have a replacement policy. They tend to keep their tractors for many years and sell when they are worn out. Coupled with the countrywide shortage of tractors, this means there are very few good used tractors for sale. But also it is advisable to avoid buying cheap second hand tractors from Europe. The specifications of these tractors are usually different from the models sold new in Africa. They have more electronics, computers and hydraulic functions. And would therefore require computer diagnostic software to trace

Mechanised farming is the way to go. problems. Given that even their spare parts will not be readily available on the Ugandan market, such tractors would be much more expensive to operate in the long run. Buying a new tractor has advantages as you will benefit from the manufacturer’s warranty, lower operating costs in the early years, higher availability and it will be easier to get financing from a bank. It is also important to buy new tractors from the official dealer and not from the bond/warehouse yard dealers who cannot provide the manufacturer’s warranty, spare parts or service and often sell lower quality tractors not specified for the Ugandan market.

2 versus 4-wheel tractors

require less capital amount and maintenance costs. But it’s less efficient in the field. At 90hp engine power and above, except for specialised transport operations, only a four-wheel drive tractor is capable of transferring the power to the land. For lower horsepower units, a two-wheel tractor can be used for field operations, but it is less efficient in the field than its 4-wheel counterpart. (This Article was first published in The East African Agribusiness Magazine Issue 04). Jim Middleton is a chartered agricultural engineer and a farmer in Nwoya District with experience o over 20 years in agricultural mechanisation in Uganda and Kenya.

A two-wheel drive tractor will initially

MACHINES WORKING HARD FOR YOU!!! Diesel Generators Wood Working Machines Agricultural Machines Power Tools

Petrol Generators Walking Tractors Water pumps Construction machines TRACTOR

Plot 24 Jinja Road Opp. Bank of Africa Tel: +256 776 288 222, +256 776 288 666, +256 702 226282 www.ea-agribusiness.co.ug

July 2013


10

Irrigation Key to transformation of

Uganda’s agricultural sector

By Our Reporter

A

griculture is no doubt the backbone of Uganda’s economy, contributing about 23.7% of Uganda’s GDP and employing approximately 70% of the total population. The sector also accounts for over 40 percent of Uganda’s exports. However, these figures don’t reveal the real potential of the sector. Agriculture has potential to transform Uganda’s economy if better farming technologies and practices such as irrigation, which not only guarantee increased yields per acreage, but also ensure all-year sup-

ply of produce, are applied. This is not only critical for food security but also guarantees all-year income for farmers, thus making agriculture a sustainable economic enterprise. Uganda generally enjoys two rain seasons: March-May and October-December, leaving much of the January-February and June-September periods idle, except for land preparation. Statistics show that in Uganda only 1 percent of the small scale farmers and 5 % of the commercial farmers use irrigation. This is something to worry about

given that weather patterns are increasingly becoming erratic, thus threatening the livelihoods of households surviving on agriculture. The best way, therefore, to boost and ensure continuous agricultural production for sustainable food security and household incomes is to adopt irrigation.

Is it affordable? Although irrigation is generally thought to be expensive and out of reach for many, sector players recommend a phased approach especially for smaller


11 holder farmers. Eng. Amen Bulwadda, a Pump Division Manager at Davis & Shirtliff, one of the leading companies dealing in irrigation equipment advises farmers to start with simple and affordable irrigation systems. And later, using earnings and savings from increased yields, he says farmers can slowly venture into large scale irrigation. Bulwadda says a Super Moneymaker Pump- a manually operated pump which costs Shs350, 000 (about $135)- can quickly lift small-scale farmers out of chronic poverty. “Super Moneymaker pump can be used by both crop farmers and cattle keepers. It is suitable for farmers with 1-2 acres of land on a relatively flat land and can be used for both crop farming and pumping water to a dam or water reservoir for animal keepers,� he says. From the reservoir, farmers can then use simple technologies such as watering cans. Starting small, he says, helps farmers evaluate the benefits/output against the cost of the irrigation system and thereafter be able to add other accessories such as sprinklers and pipes- which could go up to a reasonable Shs1.5 million for an acre. Pamela Mugisha, an engineer at Balton Uganda, says that Drip Irrigation works for all crops and reduces water wastage as the weeds generally do not benefit from water. Mugisha says Balton Uganda’s irrigation system costs as low as Shs500, 000 for a 250sq metre area. The cost of irrigation system varies depending on the distance covered and the topography of the area; steeper areas attract higher installation costs and vice-versa. For large scale farmers, with over 20 acres, Bulwadda recommends high pressure pumps such as the famous Lister Petter that range between Shs30m to Shs400m.

Uganda Gifted by Nature Unlike in many places where there is an apparent lack of access to water, Uganda is so gifted with water sources that if there was a concerted effort to irrigate, there should be no shortage of water. In the east of the country, there is

www.ea-agribusiness.co.ug

July 2013

a water source almost after every 5 kilometres. For example, for Kumi and Soroti, the wide River Awoja can be used as a big water source. There are also small rivers between Soroti and Kaberamaido, and from Kaberamaido to Lira. Overall, 11 districts share Lake Kyoga and its catchment tributaries in the Teso and Lango regions, but no farmers use

the lake water for farming-related activities. In West-Nile, the River Nile that passes through to the Mediterranean should be a big water source for irrigation. As if this is not enough, Uganda imports fruits from Egypt- a largely desert country, that relies on River Nile waters for irrigation. Ironically, there is no single irrigation


12

Advantages of Drip Irrigation

T

he key advantages of Drip Irrigation include: Reduced water use because it brings the water to the plant root zone and does not wet the entire field. Drip irrigation typically requires half to a quarter of the volume of water required by comparable overhead-irrigation systems;

Joint management of irrigation and fertilisation

Irrigation equipment exhibited at last year’s Source of the Nile Agricultural and Trade Show in Jinja. pipe running from the river to a farm on the Ugandan side. The central region too is blessed with a rich water catchment area. In Nakaseke, Kiboga and Hoima districts, River Kafu and River Mayanja are good and steady sources of water. There is also River Katonga in the Masaka, Mpigi and Sembabule area, as well as a host of man-made lakes like Kijjanabalola in Rakai and Kakinga in Ntusi- Ssembabule. In western Uganda, there are rivers like Rwizi, lakes Mburo, George and Edward from which water for irrigation can be tapped.

Rain water harvesting Outside the natural water bodies, there is also an opportunity to harvest water from the regular rains across the country for use during the dry season. There are a number of training institutions offering short term training in water harvesting at affordable rates. Bulwadda says that although many farmers know about the benefits of irrigation, many think it is too expensive. He recommends that government, development agencies, agricultural stakeholders and the private sector should work together to demystify the cost fear about irrigation but also guide farmers on the most suitable technologies. He also says that financial institutions should also work with farmer groups in extending low cost irrigation equipment to farmers.

Drip irrigation can improve the efficiency of both water and fertilizer. Precise application of nutrients is possible using the drip irrigation. Therefore, it reduces fertilizer costs and soluble nutrient losses. Nutrient applications may also be better timed to meet plant needs.

Reduced pest problems Weed and disease problems may be reduced because drip irrigation does not wet the row middles or the foliage of the crops as does overhead irrigation systems.

Simplicity Its parts are widely available in several diameters and are easy to assemble. Many customized, easy-to-install connectors, end caps, and couplers are available in different diameters. Cutting and gluing allows for timely repairs.

Adaptation Drip systems are adaptable to oddly shaped fields or those with uneven topography or soil texture, thereby eliminating the underutilized or non-cropped corners and maximizing use of available land.

Production advantages Combined with raised beds, polyethylene mulch, and transplants, drip irrigation enhances earliness and crop uniformity. Using polyethylene mulch also increases the cleanliness of harvested products and reduces the risk of contamination with soil-born pathogens. Reflective mulches further help reduce the incidence of viral diseases by affecting insect vectors, such as thrips, whiteflies or aphids.

Drip tubes take water to the root base of plants in a greenhouse.

Water source Common water sources for drip irrigation are surface water (pond, river, and creek), groundwater, and potable water (from municipality, county or utility company). Use the water source that will provide the largest amount of water of greatest quality and lowest cost. Potable water is of high, constant quality, but is very expensive. The goal of drip irrigation is to bring water to the crop. The main parameters that determine crop water use are the type of crop planted and row spacing. A drip irrigation system should be able to supply 110% - 120% of crop water needs. In other words, the system should be slightly oversized. Actual crop water use will be more or less than this amount, depending on weather and irrigation efficiency.

Maintenance and operation Maintenance is meant to preserve the high uniformity of water application allowed by the drip irrigation. The best maintenance of a drip-irrigation system is the Preventive approach. Keeping the drip tape (tube) unblocked is the best maintenance. It is easier to prevent a drip tape from clogging than to “unclog” it or replace it. Habib Taban is an agronomist and Charles Mulindwa is an irrigation technician

July 2013

www.ea-agribusiness.co.ug


Uganda Conservation Farming Initiative Enhanced Food Security for Uganda October 2011 - June 2015 Budget: $8.4 million SHORT-TERM IMPACT Working with 60,000 farmers with an adoption rate of 58 percent; • Farmers yield will increase by 100 percent in three seasons • Agro-input suppliers revenue will increase by 75 percent in three seasons • Tiller service providers will earn a revenue of USD 143,173 for ripping services while tool manufacturers earn USD 113,111 in conservation farming tool sales in three seasons

PARTNERS ● Government of Uganda ● Private sector ● USAID funded Implementors ● ● Agro input companies ● equipment manufacturers ● ● Uganda Carbon Bureau

Background

funded by the American people through the United States Department of Agriculture (USDA).

of maize, pulses and soybeans.

“Because of the training I received from CLUSA I am now able to earn

● ● ● Improve manufacturing links and tools

● ● ● Facilitate business plans at bulking centers ● priced products and services ● “My Husband and I have adopted money on labor costs.” Mrs Odong Sarah Oyima Farmers

● ● ●

Kampala Office: Plot No. 25 Luthuli Rise, Bugolobi, Kampala +256 (0) 414 505 525, +256 (0) 312202810/11, Email: Inquiries@ClusaUganda.co.ug, Website:www.NCBA.coop USA Office: 1401 New York Avenue, NW, Suite 1100, Washington DC 20005, +1 703 524 1739

services using ripping in my neighborhood.” Opiyo Sam Tiller Service Provider(TSP) Masindi District


14

How Uganda will become a regional

food basket A

s Africa`s rapidly growing population, Uganda inclusive, threatens to shoot through the roof and escalate food insecurity, Uganda has been identified as the only country in the East African Community that has the capacity to become a regional food basket given its abundant water sources and fertile soils. Uganda is said to have enough capacity and can become the food basket for not only East Africa, but the Great Lakes region which includes eastern and parts of central Africa. The Director of Crop Resources in the Ministry of Agriculture, Animal Industry and Fisheries Okasai Opolot said: “This is possible through causing an agricultural revolution in Uganda which should take a short time in the case of agriculture. Even as we speak now the revolution is on. We came up with a strategy for the development of agriculture as a ministry and this is in the name of the development strategy and investment plan for agriculture”. According to Okasai, the development strategy brings out clearly what needs to be done and one of the areas which must be addressed if Uganda is to become a food basket is increasing production and productivity. Production could be increased by functions of the area for agriculture. Here what needs to be done is to increase the productivity per unit area across those areas where there is already production and make them more productive. The second area which the ministry is emphasizing is improving market access and value addition. Okasai notes that if Uganda is to increase

market access, there is need to identify what it is that we need to do. He says we must start with the East African region producing those commodities which can go across borders and there Uganda can become a food basket for the region when the commodities which the ministry is emphasizing and prioritizing are the ones required in the region for food security. He says there is also need to improve the environment for investment in agriculture which for a long time was hard. “When I talk of improving the environment in investment in agriculture, do not just imagine big investors. It also includes improving the conditions for small holder farmers to do agriculture as a business,” Okasai said. The smallholder farmers require, for example capital, appropriate technology, knowledge to do agriculture etc, which constitute the enabling environment for the private sector to invest in agriculture and also for the public sector to play its role in agriculture. The ministry has also analysed internally that we have weak institutions. The ministry needs to address its own weaknesses, its research institutions and linkages with other institutions in agriculture because Uganda cannot single-handedly develop that market access in the East African Community. Uganda becoming a food basket needs all stakeholders who include the Ministry of Trade to play their role. Okasai says the Agriculture ministry has prioritized 10 commodities to start with and these have been categorized into two:

food crops which also double as cash crops. Under this category are maize, rice, beans, cassava, bananas and the fruits, which are the ministry`s first priority commodities. The second lot of the priority crops, are those which fall under the traditional cash crops and include coffee and tea, which the ministry thinks need to be moved. In the animal sector, the ministry thinks fisheries need to be developed and then the dairy and beef sub-sectors. Okasai says that with the above, Uganda

July 2013

www.ea-agribusiness.co.ug


15

Director of Crop Resources in the Ministry of Agriculture, Animal Industry and Fisheries Okasai Opolot

can be turned into a food basket for the East African region. He says this should not take a very long time because all that is needed is sharpening what is being done now as a country which the ministry has also thought through. He says to increase productivity, there is need to improve the availability of agricultural inputs; clean planting materials, clean seeds, use of fertilizers and provision of fertilizers, mechanization instead of relying on the hand hoe, and then move into the

www.ea-agribusiness.co.ug

July 2013

next level and then irrigation. “This means that even the ambitions of getting production to the next level will not be attained if the farmers are going to rely on rainfall for irrigation,” Okasai says. He points out that most importantly the agricultural sector must improve the way it does the marketing of the produce. He says there is need to streamline the marketing, add value to what is being produced, increase the product shelf life and safely store the agricultural products. If you store, even in the times of shortages like the country is going to experience, you will be able to have continuity. In the last season ended March 2013, the sector experienced a bumper harvest which should have been evenly distributed and we maximally benefit from it by regulating what is released to the market. All these should happen beyond the ordinary creation of awareness or sensitization but be taken a little bit further to actually teaching the farmers on what needs to be done. It is all about changing the attitude of the farmers to taking agriculture as a business. Okasai says: “It should start with the mindset and establishing whether we are ready to turn Uganda into a bread basket

for the region. The farmers must be brought to believing into themselves. The farmers must actually realize that agriculture is a business, they must invest in it to reap out of it. This can only happen when their mindset is changed to produce for the market and meet what the market wants.” The issue of quality, bulky and quantities must also be addressed and that is when the sector players will manage to turn Uganda into a bread basket. As of today the issue of Uganda being a food basket is just a gamble because the neighbouring countries will take anything but time is coming when they will want sustainable supply of good quality commodities. Okasai says the quality and quantities all originate from the farmers. All said and done, the sector is dogged by funding constraints. Okasai agrees that funding is very poor. However he says what is important is effective and appropriate utilization of what one has. “Everyone would wish to have all the money on this earth. But look into what you have, are you using it effectively and in the best way it can be used ? Let us take that in point. If one is effectively utilizing the little he has, then he can add more and it becomes simple to actually argue for more,” he says.


16

Lion assurance launches

Agri-Insurance By Patrick Kagenda A group of six insurance companies led by the Lion Assurance, on June 27, 2013 launched a new insurance product on the Uganda market that is set to change the future of farming in Uganda. Kungula Agrinsurance, as the product is known, is the first of its kind on the market paying particular attention to agriculture, which is the mainstay of Uganda’s economy and employs over 70% of Uganda’s labour force directly and indirectly.

A

nnouncing the new product at the Golf Course Hotel in Kampala, the Lion Assurance Managing Director Mr Newton Jazire said, in partnership with APA, UAP, FICO, NIKO and NIC, the players are championing Kungula Agrinsurance to help farmers in Uganda secure their yields and livestock in case of disaster. Jazire noted that the product is designed for the agriculture sector because 80% of the population depends on agriculture and as Uganda’s population is growing rapidly, there is increasing demand for agriculture products, and higher investments in the sector are needed. “Therefore, insurance facilitates easier access to finance, protects finance institutions and farmers against unforeseeable weather losses, ” he said. Kungula Agrinsurance, comes in two packages that include; Livestock All Risks Mortality (ARM) Insurance and Crop Indexed Insurance. To access the Livestock ARM Insurance, Jazire said, farmers and investors in Agribusiness are required to pay a premium of 2% to any of the participating insurance companies while financial institutions’ premiums are included as part of the loan package. The Crop Indexed Insurance, which is the latest form of insurance, covers crop and pasture losses due to drought and excessive

The executive director Insurance Regulatory Authority Mr Ibrahim Kaddunnabi, commended Lion Assurance and its partners for developing Kungula Agrinsurance, saying agriculture possesses a lot of potential for insurance firms in Uganda

rainfall and attracts a premium of between 2-5%, said Jazire. Together with aBi Trust, a multi-donor entity devoted to private sector agribusiness development, the insurance players, led by Lion Assurance, have invested more than Ushs350 million to ensure that Kungula Agrinsurance is made available to farmers. The chief manager for Financial Services Development at aBi Trust, Mr Peter Patel Ochiengs, said the call to the partnership follows the realisation that the agriculture sector has for a long time been neglected by players

in the insurance industry because of the risks associated with it. “As a development partner on this initiative, aBi Trust has invested over Ushs200 million to finance research, development and roll out of Kungula Agrinsurance product in Uganda which is in line with our vision,” Ochiengs said. Ochiengs thanked the government of Uganda for its varied efforts geared at fostering agricultural development, adding that aBi Trust will continue to pursue partnerships such as this to spur innovative solutions for the sector. Jazire thanked aBi TRUST, who have been a great partner in the development and implementation of the new product saying, “Not only have they given us invaluable advice but also extended financial support towards the establishment and operationalisation of this product.” aBi Trust was founded jointly by the governments of Denmark and Uganda and started operations in 2010. The Executive Director of the Insurance Regulatory Authority, Mr Ibrahim Kaddunnabi, commended Lion Assurance and its partners for developing Kungula Agrinsurance, saying agriculture has a lot of potential for insurance firms in Uganda. Mr Kadunnabi said: “The entire agriculture insurance potential for the country is estimated in excess of US$150 million (appx

July 2013

www.ea-agribusiness.co.ug


17

Lion Assurance Managing Director Mr Newton Jazire (R) and partners launch the Kungula Agrinsurance product

Ushs.390 billion). So, there is a lot to gain from agriculture for insurance firms.” He added that the insurance industry recorded 18.48% growth in gross premium written in 2012. “The industry’s total insurance premium rose from Ushs296.83 billion during 2011 to Ushs351.23 billion in 2012. The growth in the services sector of the economy and their increased appreciation of insurance as a vital support service to their operations led to the growth of the gross premium underwritten.

About Kungula Agrinsurance The product covers both livestock and crops. To access Livestock All Risks Mortality Insurance, farmers and people in Agribusiness are required to pay a non-refundable

www.ea-agribusiness.co.ug

July 2013

premium of 2% to any of the participating insurance companies while financial institutions premiums are included as part of the loan package. It is important to note that farmers who would like to get this product understand and meet the desired requirements and align their business practices to ethical standards.

Crop Indexed Insurance This is the latest form of insurance that covers crop and pasture losses due to drought and excessive rainfall. It is based on changes of rainfall data collected at the nearest weather station and remote sensing satellite data collected by EARS Earth Environment Monitoring. The premium

rate for this is between 2 and 5%. Key to note is that both Livestock Arm Insurance and Crop Indexed Insurance will help farmers in the recovery of monetary losses due to weather hazards, repay of loans and increases access credit for all agricultural stakeholders; particularly farmers. This cover starts at the beginning of the rainy season, when rainfall is deemed adequate and ends when the crop is ready for harvesting. If the rainfall is deficient for healthy crop growth during any part of the growing period, the farmer will receive an insurance payout that will be offset against his outstanding loan amount or pre-determined production costs.


18

Sugar cane

policy is needed to improve quality of sugar

By Moses Owino In a bid to improve on the quality of sugar production and to meet international standards; investors in the sugar manufacturing sector have called upon government to enact the sugar cane policy.

T

ment of issuing out licenses his was reached at to sugar factories to operduring a meeting ate in the region in total held at Kakira sugar disregard of the National factory where stakeholders sugar policy resulting into were informed that there massive engagement in is need to sustain the sugar sugar cane growing by the sub sector by implementresidents at the expense ing the sugar cane policy of food crops. The national which will allow good yield, sugar policy requires that establish research, and defor a sugar factory to start velopment in the growing in an area, it must at least of sugar cane. own 500 acres of sugar This follows a growing cane and should be located threat to which Kakira sugar Mayur madhivani within a 25kilometer radius factory officials called the from the existing factory. mushrooming sugar indusHowever, the joint Mantries in the region that may aging Director of Kakira sugar affect the quality of sugar works Limited Mr Mayur production. The meeting Madhivan said this was followed growing allegapreviously being observed Percentage of sugar tions that some of the new but when many players came entrants into Sugar produccane that is supplied to the industry things are tion are involved in the buyto industries is by running out of control. ‘’ ing of immature cane. out growers Prior to the coming of many According to the Chairfactories, we were talking to man of the Uganda Sugar the farmers and they were Manufacturers Association listening but now because we (USMA) Mr. Jimmy Kabeho, are many in the business, we up to 70% of sugar cane cannot control those belonging to our competisupplied to industries is by out growers. “We are tors. Otherwise, Kakira is still maintaining the ready for competition and am happy with the agreement’’ Mayur said. new coming sugar mills, but those sugar cane Farmers are now using all their land to grow factories should stop fighting for the immature sugar cane and those who cannot manage to cane because the market for sugar may fall” said grow the cane rent their land out cheaply leadKabeho. He said the growing competition may ing to food shortage in homes. Most Sugar cane cause a problem to sugar industry, therefore in Uganda is grown in the districts of Buikwe, there is need to have regulation. Jinja ,Kaliro ,Mayuge and Kamuli . The stakeholders also accuse the govern-

70%

July 2013

www.ea-agribusiness.co.ug


19

Message from chairman show board

T

o all farmers in Uganda, members of Uganda National Farmers Federation, All our partners and stake holders, the entire leadership of Uganda, the general public, ladies and gentlemen. You are most welcome to our show. On behalf of Uganda Farmers Federation, we wish to thank everybody for the support given to organise the show. We thank the ministry of Agriculture, NARO, and all other partners for a great job done. Early this year, UNFFE and its partners selected the theme for the show to reflect on 3 significant emphasis. Promoting Agro technologies to farmers, emphasis on food security and allowing completion in regional markets. The above 3 areas are elements to reflect a way forward for the farmers of Uganda and it’s a

www.ea-agribusiness.co.ug

July 2013

We thank all those who have sponsored our show int he past and today, You are great to us the Jinja show is a big attraction and involves the participation of many groups who attend the show. good promoter of production and marketing. We thank all those who have given good guidance in our efforts to prepare this show. Many organizations have set up gardens, for the exhibition, while others will display machinery, equipment, value addition products, energy sav-

ing system and trade related products. We thank all those who have sponsored our show int he past and today, You are great to us the Jinja show is a big attraction and involves the participation of many groups who attend the show. We humbly request government to assist and give a hand in improving the existing infrastructure. I wish to salute the Jinja leadership and the entire community for annually hosting our event and all our visitors as well. We thank you all for your support. Please enjoy the show

Charles Byabakama Chairman Show Board


20

Dr. Florence Muranga explains how to prepare Instant Tooke meal during the 2012 Agricultural show at Jinja.

PIBID leads Uganda’s banana industrialisation drive

T

he Board and Management Committee of the Presidential Initiative on Banana Industrial Development (PIBID) would like to take this opportunity to congratulate the Government of the Republic of Uganda, the farmers and all stakeholders upon participating in yet another National Agricultural Trade show. PIBID is excited to be part of this platform because it basically represents the most important stakeholders; the farmers upon whom our vision is based. As we join hands in promoting Agro- technology to enhance food security and competitiveness in the regional markets, PIBID has sustainably improved rural farmers to work with agricultural extension workers to train them in: ■■ best plantation management practices through demonstrations and introduction of improved banana planting materials,

■■ disease control measures, ■■ manure/inorganic fertilizer management, ■■ banana intercrops; agro-forestry and green manure/cover crops and banana-based cropping system options on how they can manage their plantations and add value to fresh matooke. PIBID is currently organizing a training of Trainers Workshop in the Western region to acquaint small and medium bakers in utilizing these new generic Tooke flours in their bakeries. PIBID was commissioned in 2005 under the patronage of His Excellency the President of the Republic of Uganda, with the aim of accelerating the growth of the banana industry through strategic empowerment of the peasants under the banana cropping system. Statistics show that by June 2005, Uganda

had not listed the banana sector among her potential wealth creating sectors. Yet ironically, banana offered the highest employment for the rural population (75%), who are mostly poor; offered the highest calorie resource base (60%) nationally but also suffered high postharvest losses of 40 per cent. This unfortunate gap in planning made the policy makers realise that it was not only important to attract investment for industrialisation but also equally important to address the object of preoccupation of the Majority stakeholders namely the rural farmers, who have been generally code-named the peasants. PIBID is based on a four-piston engine model for the development process consisting of the following segments: research and development; technology incubation (Pilot Plant); business incubation through the Commodity

July 2013

www.ea-agribusiness.co.ug


21

Students enjoying Tooke Porridge at the PIBID stall during the Trade show at UMA Trading Centre (CTC); and commercialization through the Industrial Technology Park, where viable enterprises will be scaled up. Under the leadership of the Rev. Dr Florence Muranga, who is also the brainchild of this project, PIBID has registered remarkable success as elaborated below. A medium-scale pilot banana factory has been established at the Technology Business Incubator in Bushenyi district with 85% of the civil works complete. This has been built to UNBS, NEMA, ISO, EUROGAP and HACCP/ International standards. Since quality assurance is a minimum requirement for export, a quality assurance laboratory block is also under construction with civil works standing at 45 per cent. A minimum processing unit with biogas which is a model for community processing operating on fuel is operational at the TBI. Not only that but also a construction of the intake water works at Kyamugambira for factory use and irrigation, with pumping capacity of 2000m³/day is 90% complete. Five patents for novel banana products which include; Instant Flour, Raw Flour, Extrusion cooking of banana flour, Low Amylase Starch and Banana Wool have been obtained. Tooke products were also approved by UNBS and a quality mark granted. School feeding programme: PIBID has positioned Tooke brands into the School Feeding Programme. With the introduction of Tooke porridge into various schools, Tooke could be used as an alternative to the other non-matooke flours given its nutritional benefits which include: high potassium, which reduces blood

www.ea-agribusiness.co.ug

July 2013

A Demo on sterilization process for cutting tools on how to control BBW during Farmers Training at PIBID demonstration plantation in Bushenyi

pressure and stroke risk. It also contains good starch properties and has a very good shelf life. It is gluten free. Tooke flour is virtually fat free, which is a popular trend among the increasingly large number of health conscious consumers. Tooke flour in the instant form has high energy density due to the partial solubilisation of the starches. The most pronounced advantage Tooke flour has over others is its convenience such that one can have a meal in less than five minutes. Indeed with Instant Tooke flour, one can have a ready meal in just two minutes. Just like that, instant and easy! Market: Tooke markets have been opened up in Europe, Japan, UAE and North America with orders put on hold pending completion of the pilot plant. The products will largely be

for export, but will support bulking for farmers’ value added produce. The flour, which has been tested under international quality standards in Germany and France, is now being promoted throughout Uganda and we can safely say that it is gaining ground. Products that will be brought on market upon completion of the development include:- Raw Tooke flour, Instant Flour, bread, biscuits, cakes, Extruded Tooke flour products, Tooke soups, Porridge and Tooke flakes. Generally, Matooke and bananas in general have also been credited to giving the consumer a feel-good effect, which may be consequent to the joy in Uganda’s population generally. As the saying goes; “show me what you eat and I will show what you are.”


22

TATA Uganda & Opportunity Bank launch agricultural financing drive Farmers to get loans to buy tractors

T

o support the adoption and modernization of agriculture in Uganda, John Deere Inc, TATA Uganda Ltd, and Opportunity Bank Uganda Limited have joined together to provide a winning combination of tractors and equipment with a local service package and an affordable finance package. This package will be launched at the UNFA Agricultural Jinja Show on 8-14 th July. John Deere is one of the largest tractor manufacturers in the world with 176 years of history in agriculture, originally producing horse-drawn ploughs and going on to produce tractors and tractordrawn equipment in early 20th century. Tata Uganda Ltd, part of the Tata Group from India, have recently been appointed to represent John  Deere in several

Once your loan is approved, TATA Uganda will provide operator training and also a service schedule, as part of the loan, to ensure the equipment is being maintained to operate effectively in the field African markets, this will not only be supply of equipment but a comprehensive service, parts and sales. The equip-

ments can be viewed and acquired from their premise on plot 47 Jinja RoadKampala. Opportunity Bank Uganda Limited, known for their Agricultural Finance programme supporting smallholder farmers, has developed a financing package to make it affordable for farmers and contractors. Subject to standard credit approval a client will secure a 3-year repayment schedule at a preferential interest rate with 36 monthly repayments.  Once your loan is approved, TATA Uganda will provide operator training and also a service schedule, as part of the loan, to ensure the equipment is being maintained to operate effectively in the field.

July 2013

www.ea-agribusiness.co.ug


23

Kaliro Sugar boosting agriculture

A

lam Group recently launched its new sugar factory in Kaliro District, eastern Uganda. We caught up with the Group Managing Director, Mr. Abid Alam, to ask him about the agricultural practices involved. ‘When we first set out to create a sugar plant we had a clear vision of where we wanted to go and how we would go about it. We believe that in this venture the key to our success would be our work with outgrowers.’ Mr. Alam said. When asked about the outgrowers involvement he added; ‘We have developed a scheme whereby we are offering our outgrowers soft loans through the usage of agricultural equipment and seed cane. We have invested in equipment so that we can use it on smallholders land and prepare their fields for cane growing. We then also provide the seed cane and recover our base costs after the first harvest. Sugar & Allied Industries Limited (SAIL) has 5000 acres of land which

www.ea-agribusiness.co.ug

July 2013

we are using to grow seed cane for our outgrowers. The outgrowers provide us with all of our cane and we are very happy about the positive impact this will have on Kaliro and the neighbouring districts. The commissioning of our sugar plant will give outgrowers a guaranteed income at a fair price; in fact we will be spending 60 billion shillings within the region on an annual basis.’ Further discussions with the agricultural team at SAIL revealed that they have already signed on 5,000 outgrowers and are looking to expand to 10,000 as more people come on board. The team explained that the outgrowers sign contracts and benefit from the stable pricing of sugar as well as the use of SAIL’s agricultural equipment. Sugar cane has the advantage of lasting for five years under the same crop reducing the cost of land preparation. They added that large scale land holders, over 50 acres, could even apply for a bank loan to buy their own tractor with the help of SAIL.

‘The one thing that makes this project really worthwhile for me is the positive impact that SAIL is going to have on all of the farmers in the region. Rather than just buying all the land we made a conscious decision to support them and prove that farming is the best way to beat poverty. Up to 10,000 families will benefit and it is fair to say that the district will now start to come up economically.’ Mr. Alam said. Mr. Alam also went on to tell us of SAIL’s plans to build a hospital and a vocational institute in Kaliro. The factory will be hiring 700 people and he plans to hire these people locally as well; ‘It is important that we now start to train up our youth so that they have the skills required to take up the technical roles in the plant. As a Ugandan company we are keen to hire from our own and build up the technical capacity within the country.’ SAIL’s brand, Kaliro Sugar, is already on the market around the country.


Centenary Bank

Agricultural Loans Loans designed to finance business activities in the agricultural production, processing and marketing value chain, animal production (diary, poultry and piggery projects), fishing and fish farming, bee keeping as well as food processing i.e. grain mills, oil mills and hullers. The loan period and repayment plan is dependent on the nature and season of the agricultural activity to be financed

Main Features: ■■ No principal loan repayments during the grace period except for the interest. ■■ Repayable through equal installment payments whose amounts are dependent on the projected cash flow of the agricultural activity. ■■ Interest charged on reducing balance. ■■ Minimum loan amount UShs. 100,000/=.

Basic Requirements: ■■ Project undertaken must be an activity in the agricultural value chain. ■■ Business project must be profitable. ■■ Applicant must be resident within the branch designated area of operation. ■■ Applicant must be owner or tenant of the land on which he/she operates. ■■ Securities include land titles, unregistered land or moveable assets like cows, goats, sheep, household property or business equipment and tools. ■■ Application fee of UShs. 15,000/=. ■■ Commitment fee of 2%.

Benefits: ■■ Faster loan processing speed. ■■ Attractive interest rate. ■■ Repayment plans structured to accommodate the crop seasonality or animal production cycle. ■■ Grace periods are offered. ■■ Multiple disbursements offered to accommodate different stages of production cycle.

Veterinary Association Loan Scheme (VALOS) This is a unique loan scheme through which veterinary doctors who are registered members of Uganda Veterinary Association (UVA) can access Centenary Bank loans to finance their veterinary projects/practices. The scheme is aimed at encouraging private veterinary practice in Uganda. Loan amounts range from a minimum of UShs. 500,000 up to a maximum of UShs. 35million for a loan period not exceeding 24 months with flexible repayment plans.

Main features: ■ ■ • Mainly intended for vet doctors (private practitioners) who are registered members of the Uganda Veterinary Association (UVA). ■ ■ • In some cases registered members who are not necessarily private practitioners may also be considered.

Basic Requirements: ■ ■ Recommendation letter from Uganda Veterinary Association ■ ■ Commercially viable project ■ ■ Loan applicant must be a resident of Uganda ■ ■ Flexible security requirements such as; land title, kibanja, vehicle, personal guarantee, e.t.c. ■ ■ Savings account or Current account at any of the Centenary Bank branches. ■ ■ Loan application fee of Shs.15,000 only.

Benefits: ■ ■ Comparatively much lower interest rate. ■ ■ Flexible repayment plans. ■ ■ Grace period available on a case-by-case basis ■ ■ Phased disbursements to accommodate different stages of business activity cycle


O

LL

EN

CE

TOGETHER, WE GO FURTHER F

BAN

KING

EX

CE

The number 1 supporter of agricultural lending We have tailor made agricultural solutions for your agricultural initiatives, so you can yield more.

Come transform your life. Centenary Bank Head Office: Mapeera House, Plot 44-46 Kampala Road & Plot 2 Burton Street. P. O. Box 1892 Kampala Tel: 0414-4251276/7 Fax: 0414 - 251273/4 E-mail: info@centenarybank.co.ug www.centenarybank.co.ug


AGRICULTURAL CREDIT FACILITY (ACF) Terms and Conditions of Sub Loans

Sub-loan amounts are determined on the basis of assessment and appraisal of project costs and genuine credit needs in accordance with the Lend- ing Policy of the PFI and are designated in Uganda shillings. The PFIs then disburse the total loan amount (100%) to the final borrower (Subborrower) on the following terms:

Loan amount:

The maximum loan amount to a single borrower is up to Shs 2.1billion. However, this amount can be increased up to Shs 5billion on a case by case basis (for eligible projects that add significant value to the Agriculture sector and the economy as a whole).

Loan Term

The maximum loan period should not exceed 8 years and the minimum should be 6 months.

Background

The Agricultural Credit Facility (ACF) was set up by the Government of Uganda (GoU) in partnership with Commercial Banks, Uganda Development Bank Ltd (UDBL), Micro De- posit Taking Institutions (MDIs) and Credit Institutions all referred to as Participating Financial Institutions (PFIs) to facili- tate the provision of medium and long term loans to projects engaged in agriculture and agro-processing on more favorable terms than are usually available from the PFIs. Loans under the ACF are disbursed to farmers and agro-processors through the PFI. The scheme is administered by the Bank of Uganda (BoU). It operates on a refinance basis in that the PFIs disburse the whole loan amount to the sub-borrower and applies to BoU for the 50 percent GoU contribution. The Scheme became operational in the year 2009.

Objectives of the ACF

The main objective of the ACF is to promote commercialization of Agriculture through provision of medium and long term financing to projects engaged in Agriculture, Agro processing, modernization and mechanization.

Eligibility for refinance under the Scheme

Private sector businesses or individuals operating in Uganda and engaged in agriculture and agro-processing of raw materials and intermediate products originating from crop and livestock production, fish farming, poultry farming/ breeding,bee-keeping,etc are eligible for financing.

Eligible Purposes

The acquisition of agriculture machinery and equipment/fixed Assets for agro-processing, agriculture mechanisation and modernisation, post harvest handling equipment, storage facilities and any other related agricultural and agro processing machinery and equipment. Agricultural inputs required for primary production will be considered provided this component does not exceed 20% of the total project cost for each eligible borrower The Scheme shall not be used for financing working capital for trading in agricultural commodities, purchase of land, forestry and refinancing existing loan facilities.

Grace Period

The Grace Period is up to a maximum of 3 years.

Interest Rate

The interest rate to the final borrower ranges from 10% to 12% per annum. The 50% GoU contribu- tion is disbursed to the PFIs at zero interest (interest free).

Facility fees

Facility fees charged by PFIs to eligible borrowers should not exceed 0.5% of the total loan amount. Legal documentation and regis- tration costs are borne by the borrower.

Where to apply Potential borrowers should apply through the Participating Financial Institution of their choice. These are: ABC CAPITAL BANK BARCLAYS BANK BANK OF AFRICA BANK OF BARODA CAIRO BANK CRANE BANK CENTENARY BANK CITI BANK DIAMOND TRUST BANK DFCU BANK ECOBANK EQUITY FINA BANK FINCA

GLOBAL TRUST BANK HOUSING FINANCE BANK KENYA COMMERCIAL BANK MERCANTILE BANK ORIENT BANK OPPORTUNITY BANK POST BANK PRIDE MICROFINANCE STANBIC BANK STANDARD CHARTERED BANK TROPICAL BANK UDBL UNITED BANK FOR AFRICA UGANDA FINANCE TRUST

The Executive Director Finance Bank of Uganda P.O.Box 7120, Kampala, Uganda Plot, 37/43 Kampala Road Tel: +256-41-258441/9 | Fax: 256-41-258218


27

How to access credit for agricultural production Back ground

T

he Agriculture Credit Facility (ACF) was set up in 2009 by the Government of Uganda (GoU) in partnership with Commercial Banks, Uganda Development Bank Ltd (UDBL), Micro Deposit Taking Institutions (MDIs) and Credit Institutions all refered to as Participating Financial Institutions (PFIs). Funds are contributed by both GoU and PFIs with each contributing 50% of the total loan to the eligible borrower (1:1 ratio). The Scheme which operates under a Memorandum of Understanding signed by all the stakeholders provides medium and longterm loans to projects engaged in agriculture and agro-processing on more favourable terms than are usually available from the Financial Institutions. Bank of Uganda (BoU) plays the role of the Fund Administrator.

Eligible Purposes The Scheme’s core objective is to support agriculturual expansion and modernisation through value addition along the agricultural value chain. The loans under the ACF are extended to private sector businesses or individuals engaged in agriculture and agro-processing of raw materials and intermediate products originating from crop and livestock production, fish farming, poultry keeping/farming and bee-keeping. The eligible purposes include; acquisition of machinery for agriculture and agro-processing, post harvest handling equipment, storage facilities/Warehouses for storage of agricultural produce and any other activity related to agriculture and agro-processing. A maximum of up to 20 percent of the total project cost can be used to finance inputs/working capital that mainly include fertilizers, pesticides, etc required for primary production. The facility however, does not finance working capital for trading in agriculture commodities, purchase of land, forestry and financing existing loan facilities.

Loan Terms and Conditions The ACF loans are disbursed to farmers and agro-processors through the PFIs on the

www.ea-agribusiness.co.ug

July 2013

Bank of Uganda, one of the key partners in agricultural financing. following terms; ■■ The loans are designated in Uganda Shillings ■■ The maximum loan amount to a single borrower is up to Shs. 2.1billion.However; this amount can be increased up to Shs 5billion on a case by case basis (for eligible projects that add significant value to the agriculture sector and the economy as a whole).There is no minimum loan amount to the final beneficiary. ■■ The maximum loan tenure is 8years including a grace period of up to 3years and the minimum loan tenure is 6months. ■■ The interest rate charged by the PFI to the final beneficiary is up to a maximum of 12 percent per annum. The GoU contribution is disbursed to the PFIs at no interest (interest free) as an incentive to lend to the agricultural sector. ■■ The loan administration fees charged by the PFIs to eligible borrowers should not exceed 0.5 percent of the total loan amount. Legal and documentation costs are however borne by the borrower.

Procedure of accessing the facility The ACF is a refinance facility where the PFIs upon appraisal of the eligible projects extend loans to the borrower and thereafter claim re-imbursement from BoU for the GoU contribution. Below is the procedure for accessing the facility;

■■ Client submits a bankable proposal through any of the PFIs mentioned above ■■ The PFI appraises/analyses the project to ascertain existence,eligibility,feasibilty and viability prior to sanctioning the loan in accordance with the ACF guidelines ■■ Upon satisfaction, the PFI sanctions the facility and extends the loan to the eligible borrower ■■ The PFI submits the relevant documentation to BoU for re-imbursement of the GoU contribution.

Performance todate Since inception in October 2009, loans under the ACF amounting to Shs.117billion have been extended to the Farmers and AgroProcessors contributed by both the GoU and the PFIs. The overall performance of the ACF to date has been encouraging with the increased involvement of the PFIs in Agricultural Financing which attracted very little participation in the past. A total of 212 projects spread across the country have so far benefited under the ACF. The Fund has contributed to value addition in the agricultural sector with 65 percent of the loan portfolio financing agro-processing projects. Other areas covered include; poultry farming, acquisition of tractors, storage facilities for agricultural produce and irrigation


28 among others. The chart below gives the details of the areas funded:

Areas Funded The facility benefits commercial farmers, Small and Medium Enterprises (SMEs) and farmer associations/ groups that comprise mainly of out growers. Most of the SMEs include those involved in poultry farming, fruit growing, acquisition of tractors for land opening and milk coolers among others. Through the provision of medium and long term credit to eligible projects under more favourable terms than usually available on the market, the ACF has indeed played a big role in promoting the agricultural sector.

Where to apply Potential borrowers should apply through the PFI of their choice. These are: ■■ ABC CAPITAL BANK ■■ BARCLAYS BANK ■■ BANK OF AFRICA ■■ BANK OF BARODA ■■ CAIRO BANK

■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■

CRANE BANK CENTENARY BANK CITI BANK DIAMOND TRUST BANK DFCU BANK ECOBANK EQUITY FINA BANK

■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■

FINCA GLOBAL TRUST BANK HOUSING FINANCE BANK KENYA COMMERCIAL BANK MERCANTILE BANK ORIENT BANK POST BANK PRIDE MICROFINANCE

■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■

STANBIC BANK STANDARD CHARTERED BANK TROPICAL BANK UDBL UNITED BANK FOR AFRICA UGANDA FINANCE TRUST IMPERIAL BANK OPPORTUNITY BANK (U)LTD

EAST AFRICAN SEED (U) LTD Importers/Exporters/Marketers of High Quality Seeds, Agro-chemicals, Fertilizers, Sprayers and Farm Tools

Cultivating Every Seed...

UGANDA

Building Trust, Relashionships and Prosperity for More than 40 years..

MID- SIZED COMPANIES DAILY MONITOR

KPMG

An Integrated Solution Provider For Plant Protection

+256 779 228245/ 772 583 783

July 2013

www.ea-agribusiness.co.ug


Standards compliance boosts agribusiness

A

s we look forward to the 21st Source of the Nile National Agricultural and Trade show in Jinja under the theme: “Promoting Agro-Technologies to Enhance Food Security and Competitiveness in the Regional Markets�, two aspects in the theme catch our eyes, especially food security and competitiveness. The Agriculture and Agri-business sector in Uganda still has enormous potential as a major contributor to the country’s GDP, even when it has always been on a subsistence scale, where peasant farmers and small holders produced food for home consumption and the little surplus sold for income. But with shocks in the agricultural sector with, most severe being prolonged drought, peasant farmers find themselves food insecure and therefore a rise in food prices is also felt in the markets. With a high population growth, deliberate efforts to ensure food security while conserving the environment in order to ensure sustainable development must be encouraged. In addition, the recent trends in the liberalisation of trade have caused consumers to be more specific with choice because of the variety of products at their disposal. This means that in order to remain competitive, the agricultural produce from within developing countries, specifically Uganda should comply with international market requirements and consumer expectations so as to access and maintain local and regional markets. Particular concern should be the emerging trading blocs and regional integration which has liberalised trade in food and other commodities. The harmonisation of food safety and quality standards specifically within the EAC states through the East African Community calls for urgent adoption and implementation of standards from farm, level to the consumer. This can only be achieved through fast and innovative technology enhancement, and transfer among priority value chains that impact on the GDP. It is important to align interventions within agriculture and agribusiness to address the need for the introduction and dissemination of productivity enhancement technologies such as

www.ea-agribusiness.co.ug

July 2013

Trainees at a fruit and vegetable pack house during their practical training in Nairobi in October 2012. those that promote Good Agronomic Practices (GAP) for improved production and better Post harvest handling technologies, value addition and quality enhancement of final products. The introduction of post-harvest technologies and value addition positively impact on the economic value of food products and hence increase farmer income. Capacity building for the private sector to be able to adopt, implement and utilise these technologies is a key factor in ensuring food security and regional competitiveness. The Agribusiness Initiative Trust has engaged in initiatives that promote enterprise value chain for food security like Maize, Pulses (beans and soya bean) and income generating crops like Coffee, sunflower and horticulture for export. Early this year, aBi Trust also kicked started its support towards Diary, a cold value chain that has started implementation in South Western Uganda under the Uganda Crane Creameries Cooperative Union (UCCCU) an apex body for dairy cooperatives in the region. The intervention envisages to directly benefit 18,000 dairy households in three years. Productivity has been enhanced through support to seed companies to multiply satisfied seed and also demonstrate improved varieties by establishment of Farmer Field Schools and

demonstration plots for learning purposes. Post-harvest handling technologies such as drying technologies and moisture meters among others have been distributed to over 50 farmer organisations and these technologies should be encouraged with the aim of reducing post-harvest losses in grains and coffee. Competitiveness in the regional market is supported through; support to the introduction, development and dissemination of new and existing standards such as codes of practices in the coffee and horticulture sector and the dissemination of over 27 standards that cut across the priority value chains of aBi Trust. Local capacities have been built to be able to comply to both regional and internal market standards or requirements. The trainings have been undertaken in respective food product standards and management systems. These trainings have targeted mainly exporter companies. Support has also been extended to the establishment of the National Enquiry Point on specific SPS measures and standards as demanded by importing countries within the region and internationally, so that producers are fully aware of what requirements the market demands.


30

Crops that make you a millionaire quickly By Our Reporter

Everyone likes making smart quick money, Right? Now if you’ve passion for farming but with limited capital and land, the crops listed below have been tested over time and have to be proved quick money makers. Giving them a try will definitely leave a land mark in your life as the returns are overwhelming.

Cabbages Cabbages too have unending demand in towns. Two acres of well managed cabbages, if

you’re around Kampala can earn you about Ushs15m with investment capital of about Ushs2m. You’ll need an experienced farmer to give you more information on how to go about it.

July 2013

www.ea-agribusiness.co.ug


31 Onions Planting onions is simple as planting beans but the returns are huge. Normally, a kilo of Bomby variety, one of the best varieties, costs Shs2, 500 and Shs6000 when prices are lower and higher respectively. According to research, an acre can give you 4000kgs and taking the

lowest price (UShs2500), this will earn you UShs10m yet with less than UShs1m invested capital. The market for onions locally and internationally is ever available.

Water melon Are you aware that a big watermelon can cost UShs.10,000? The demand for watermelon is present in many towns of Uganda. Smart middlemen are exporting them to Kenya and South Sudan for better prices. If you can be a regular supplier of melons, many hotels and restaurants in Kampala are ready to

welcome you. You can make USh32m in three months from just growing two acres of these simple creepers. The estimated capital requirement is Ush2m. “When buyers find me in my garden, a small melon goes for UShs500 while a big one goes for UShs2000,” an experienced farmer, says.

Pumpkins Pumpkins rarely miss on the menu in almost all hotels and restaurants you know in Kampala. But what’s surprising, you rarely come across a garden of pumpkins. This is a “virgin” area awaiting exploitation. A single plant of pumpkin can produce over 100 pumpkins. It is advisable to buy a pumpkin with a hard shell from markets and get out

seeds to plant. An acre accommodates 784 holes. Each plant will produce between 10-30 pumpkins. The least price a pumpkin sells on the garden is UShs1000. Considering 10 as the average, this translates into Shs7.8m with an investment capital of about UShs400, 000.

Passion fruits An acre requires 600-800 plants. Planting materials cost UShs500 and UShs1000 for unspotted and potted ones respectively. Currently, a bag of local purple is selling at UShs400, 000 in local markets while the Kawanda type is selling UShs250, 000. In a well managed acre, Kigoye, an expert, says a farmer can collect two to four bags of fruits a week for a period of 12

Tomatoes Sauce without tomatoes is not sauce to day! Even if it’s not fresh tomatoes, at least tomato sauce extracted from tomatoes will be applied. There are testimonies of people who are rich because of tomatoes. To get maximum yield, one needs to be near a source of water like a river so as to grow tomatoes even in dry season, when the prices shoot up. If you don’t have land near Kampala, don’t

www.ea-agribusiness.co.ug

July 2013

worry because you can rent it at affordable rates. You just need to get a few tips from successful farmers and experts to kick start your poverty eradication campaign by growing tomatoes. With an investment capital of UShs1.2m, you can earn about UShs5m if you sold at the lowest price.

months for the two seasons. Taking two bags as the average, it translates into 96 bags of harvested passion fruit. And, taking UShs150, 000 as the average price per bag, a farmer would earn UShs 14.4m, but when prices go up to UShs400, 000 during scarcity a farmer will pocket UShs38m.


32

Minting money

from poultry farming

Poultry farming is increasingly becoming lucrative worldwide, with demand for eggs and chicken meat on the upward trend. In Uganda, many farmers out of excitement embark on poultry farming and end up making huge losses. The East Africa Agribusiness interviewed Ugachick Poultry Breeders’ Extension Officer, Mr. Kiwanuka Francis Majwega on how to set up a profitable poultry farming enterprise. Below are the excerpts

What does it require to go poultry farming? Interest/passion in poultry farming is key. You must start with the idea (business plan). Whether you have the money, I would advise farmers to first seek information and carefully plan if they’re to comfortably manage both a small or large farm without necessarily requiring a professional veterinary officer. Many farmers start rearing birds out of excitement. Someone will buy chicks without adequate preparations because a neighbour’s flock is doing well. You cannot practise farming on phone. By the time you’re told that there’s a problem, you’re already late and in losses. Poor planning also results into low prices and sometimes inadequate demand for a farmer’s products.

birds with Newcastle +IB and Gumboro at different intervals will cost a farmer about Ushs35, 000. Although broilers bring in quick returns, the profit margins are minimal because a farmer earns a profit of about Ushs2000 on each bird. I would therefore recommend farmers intending to go commercial to stock a minimum of 500 birds.

Kiwanuka Francis Majwega

poultry farming, excluding housing? If owner’s involvement in the business is critical, what advice do you have for corporate people wishing to take on the enterprise? The working class intending to venture into poultry farming should hire a person with interest in farming and maintain the highest level of record keeping. The hired person must record whatever is happening at the farm. You must also work out the security issue because feeds, vaccines and eggs can be stolen by workers. What are the major costs involved in

Broilers A one day broiler chick on average costs Ushs1600. From day one to three weeks, each chick will have consumed 1-1.5kgs of broiler start feeds. On average a kilo of broiler start costs Ushs1,100. From four to seven weeks, each broiler will have consumed between 3-3.5kgs of broiler finisher with a kilo currently going for Ushs1,000. From week six when the birds weigh 2-2.4kgs, a farmer will start selling. Other costs include brooding and vaccination expenses. Vaccination of 500

Layers A one day layer chick on average costs Ushs2,800. Layers feed on chick and duck mash for the first two months and within this period, each bird will consume at least 2kgs. A kilo on average sells at Ushs1,200. From 2-5 months, they feed on growers mash and within this period, a bird will consume at least 6kgs. A kilo costs Ushs980 on average. From production (when they start laying) at 20 weeks onwards, they are fed on layers mash. Once egg production falls below 60%, a farmer should be able to dispose them off. In terms of vaccination, 500 layers will cost about Ushs 155,000. This will include vaccines such as Newcastle, Infectious Brochitis, Gumboro, Fowl pox, Fowl typhoid given at different intervals as directed by a professional extension/veterinary officer. On average, 500 birds will give you 14 trays per day for a period of 40 weeks because well looked after layers will give you a production capacity of 85%...each bird will give you between 300-320eggs throughout the laying cycle.

July 2013

www.ea-agribusiness.co.ug


33

What can farmers do to get the best out of their flock? The quality and the quantity of feeds and water, stocking density, the quantity of drinkers and feeders and disease control strategies will greatly affect the laying capacity of the flock. Farmers need to know the basics; one drinker will cater for 50 birds while 1 feeder will cater for 25 birds. We recommend Bio security measures (a set of measures designed to reduce disease incidence) for disease control. Are there ways of cutting on the costs, say by making own feeds? Getting a good breed, sourcing quality feeds and the highest level of hygiene

A one day layer chick on average costs Ushs2,800. Layers feed on chick and duck mash for the first two months and within this period, each bird will consume at least 2kgs. A kilo on average sells at Ushs1,200.

will keep your costs low. On mixing own feeds, you must know what you’re doing. You must pay particular attention to the purity of the materials you’re putting together.

I want to tell you that the formula is not enough...you must look at the costs involved in acquiring the materials including transport...the particle size may be bigger than your chicks and they end up blocking the digestive system and you lose out. I would advise farmers to at least use factory feeds for the first four weeks. What are the key challenges facing poultry farmers? Poultry farmers globally are facing one big challenge; drug use and abuse, which is dangerous to human health. You see farmers tend to avoid cheaper preventive measures and opt for curative measures. Farmers are failing with basic management (like vaccination, Biosecurity etc) and end up using a lot of drugs which puts human health at greater risk...drugs used for treating birds makes human beings become resistant to drugs because of animal drug residues in their bodies. We also have many unqualified people selling poultry and other animal drugs...we need policy implementers to come in. How about quality? Farming is stagnating because of poor marketing...they don’t pay attention to producing quality products. The prices end up being determined by the market instead of the producer. Therefore, farmers should mind about quality assurance.

www.ea-agribusiness.co.ug

July 2013


THE NATIONAL ANIMAL GENETIC RE P. O. Box 183, Entebbe- Uganda | Tel: +256

COMMERCIAL FARMING WITH IMPROVED

BACKGROUND The National Animal Genetic Resources Centre and Databank (NAGRC& DB), formerly known as the Animal Breeding Centre (ABC), was established by an Act of Parliament viz. the Animal Breeding Act, 2001. The mandate of NAGRC & DB has now been broadened beyond former ABC’s of providing artificial insemination (Al) to farmers. This was a result of recognizing the importance of animal breeding as an instrument and strategy in improving the nutritional status of the population and in alleviating poverty. The per capita availability of livestock products which stands at 40 litres of milk and 5.6 Kg of meat as compared to the FAO recommendation of 200 and 50, respectively, calls for a great improvement in animal production. Annual improvement in animal production (milk, beef, eggs etc.) through animal breeding results in small but cumulative and sustainable effects. This potential of expression of small changes in thousands or millions of animals is what makes breeding one of the most powerful and cheapest means of increasing the efficiency of animal production.

VISION To optimize livestock production and productivity through animal breeding in order to improve food security and eradicate poverty in Uganda.

MISSION To play a leading role in establishing a comprehensive National Animal Breeding programme in Uganda.

REASONS FOR ESTABLISIIING NAGRC & DB In the face of neo-liberal policies like privatisation, stakeholders deemed it necessary to have a body corporate entrusted with protecting and guarding national interest in breeding work. Livestock sectors like disease control and breeding cannot be left

Collecting semen at NAGRC & DB headquarters in Entebbe. in their entirety to the private sector. Results of years of market driven breeding goals which used the strategy of changing the environment to suit unadapted genotypes for quicker results have not been satisfactory. This clearly shows that livestock breeding cannot wholly be left to market forces. There is a need to change genotypes to suit the environment (selection). Improving the quality of animals through selection using local and tropicalised breeds is a long term venture which hardly attracts investment by


SOURCES CENTRE AND DATABANK (0) 414 320 831 | Email: nagrcict@gmail.com

ANIMAL GENETICS FOR A BETTER LIVING

commercial activities: i.

ii.

iii. iv. v. vi.

Production, procurement and sale of genetic material (stock, semen, embryos) and their associated equipment. Management of the centre farms and ranches (Stock Farms: Rubona, Njeru, Kasolwe, Bulago, Lusenke, LES, Sanga; Ranches: Nshaara, Ruhengere, Maruzi, Acholi/Aswa) for production and selection of superior dams and sires. Production and sale of founder brood stock of fisheries resources. Operates open nucleus breeding schemes and reproduction extension services to farmers. Rears sires for production and sale of semen. Produces, procures and distributes liquid nitrogen and its associated equipment.

Developmental role: The centre also undertakes the following activities as directed and funded by government and other funding agencies: i.

ii. iii. iv. private enterprises. For any meaningful sustainable breeding activities, this latter approach / strategy should go hand in hand with market driven goals. The NAGRC & DB was, therefore, established to cater for both interests and it is to play a leading role in the gradual commercialisation of breeding activities and use of modern breeding technologies. Commercial role: In order to attain its objectives, the centre specifically carries out the following

v. vi.

Serves as a Central Livestock Registry, quarantine centre, examines and evaluates genetic material (semen, embryos). Conducts training for technicians and farmers in aspects of animal breeding. Collaborates on research on genetic improvement. Encourages formation and development of Breed Societies and Breeders’ Associations. Provides guidance on breeding and multiplication of improved breeds. Promotes herd recording and performance testing on farms.

It is worth noting that the regulatory functions as far as breeding activities are concerned are the responsibility of the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF). NAGRC&DB is not a regulatory body.


36

Farmers plant climbing beans in Kabale district.

Integrated soil fertility management A sure way of improving on farm productivity in Eastern and Central Africa By Andrew Ainomugisha (PhD) & Alex Ariho

N

ature is taking a toll on human survival especially in Eastern and Central African countries where the majority of their inhabitants depend on agriculture for their livelihoods. Land degradation and soil fertility depletion are the main biophysical constraints to agricultural productivity. This, in part, is

attributed to continuous cropping, inadequate soil replenishment, high rates of soil erosion but most importantly limited investment in soil improving technologies. This comes at a cost. According to FAOs Global Land Degradation Assessment of 2006, Nutrient (N, P and K) balances for 13 countries of Sub Saharan Africa showed that over 200 million hectares of cropland had lost 600 Kg N ha-1, 75 kg P ha-1 and 450 kg K ha-1over the last

30 years. Consequently, on farm crop yields among smallholders is poor leading not only to food insecurity but also to reduced incomes. This comes at a time when African governments have committed themselves to improve agricultural performance under Comprehensive Africa Agricultural Program (CAADP) that came into effect in 2006 after the Maputo Declaration. This renewed hope mandates all member

July 2013

www.ea-agribusiness.co.ug


37 countries to commit a minimum of 06% of their annual budgets to agriculture. Excel Hort Consult Ltd, a private sector agribusiness and development company recorganises the importance of improving soil fertility in fulfilling its mandate. In partnership with other six like-minded organization1 is implementing a crossborder program that seeks to improve soil fertility among small holder farmers for improved livelihoods. The program uses participatory gender responsive and market oriented approaches in its implementation. In Uganda, the program is implemented in Mbale, Bukedea and Tororo districts in Eastern Uganda as well as in Kabale district in South western Uganda. In more specific terms, this program seeks to: a) promote gender responsive Integrated Soil fertility management and value addition technologies; b) Increase market access options for selected enterprises specifically bananas, beans and ground nuts; c) enhance the capacity of key stakeholders to undertake integrated soil fertility management and value addition and d) enhance accessibility of knowledge, information and bestbet lessons for upscaling integrated soil fertility management practices. The following ISFM technologies are being promoted: ■■ Planting of MAC 44, G633 varieties of climbing beans as well as Red beauty and Serenut 4 varieties of ground nuts. This has been done with inoculation with CIAT 899 and EMR 1597 rhizobium for improving productivity. ■■ Farm yard manure has been combined with mineral fertilizers at planting as a way of improving synergy in nutrient utilization. ■■ A seed planter which by design gives precision spacing and saves time and labour is being used. ■■ With regard to value addition as a means of facilitating access to markets smallholder farmers have been 1 These include National Agricultural Research Organisation, Kenya Agricultural Research Institute, Kenyatta University, Kenya Forestry Research Institute, Sokoine University of Agriculture in Tanzania, Rwanda Agricultural Board and Makerere University.

www.ea-agribusiness.co.ug

July 2013

AVAILABILITY OF AFFORDABLE CREDIT FUNDS AT THE MICROFINANCE SUPPORT CENTRE The Microfinance Support Centre Ltd (MSC) is a Government of Uganda owned company, under the Ministry of Finance and Economic Planning. We provide credit to microfinance and other registered business organisations at the best terms on the market, through our wide range of loan products. Specifically, MSC is mandated to avail funds to Small and Medium Enterprises (SMEs), Microfinance Institutions, Cooperative Unions, Area Co-operatives Enterprises, Producer and Marketing Cooperatives, Savings and Credit Co-operative Organisations (SACCOs). Priority funding is extended to support agricultural production, value addition, asset acquisition, small scale manufacturing and trade. MSC loans terms including repay-

ment are very flexible. Our interest rates range between 9% and 17% per annum depending on the nature of business, with SACCOs and agricultural related business attracting the lowest rates. Interest on loans is calculated on a declining balance. The loan period ranges between 2 to 4 years with a grace period of up to 6 months. There are no added costs such as insurance, processing fees, management/ monitoring fees and inflation adjustment. The Microfinance Support Centre Ltd wishes to invite loan applications from interested organisations. Loans shall be extended to organisations that meet our criteria, which is broadly viability of the business and the benefit to the communities. We look forward to a fruitful partnership with you.

For further details please contact; Manager Marketing Office of the Executive Director, Plot 46 Windsor Crescent Kololo Tel: 0312266626, 0312264936, 0312264934, 0312263778; Mob: 0754661856, 0772532080 Email: msc@msc.co.ug; marketing@msc.co.ug


38

Oil palm growing uplifts smallholder farmers in Kalangala An Innovative Approach to Farmer Support In their own words

The story of Betty Zalwango “Before the Oil Palm project I was a fish monger. I used to grow only food crops which would be destroyed by monkeys. I used to keep my children at home to guard the gardens when I went to work. When the Local Council members came to teach us about growing oil palm, I registered and decided to become a farmer. Oil palm has raised my living conditions to levels I only dreamt about; I now own

B

etty Zalwango is one of the 1600 smallholder farmers participating in the growing of 3,500 hectares of oil palm on Bugala Island in the Lake Victoria district of Kalangala, under the Vegetable Oil Development Project (VODP). The project is a Government of Uganda strategic effort to address rural poverty by involving smallholder farmers in vegetable oil crop production. Its overall goal is to contribute to sustainable poverty reduction in the project area. The development objective is to increase the domestic production of vegetable oil and its byproducts, thus raising rural incomes for smallholder producers and ensuring the supply of affordable vegetable oil products to Ugandan consumers and neighbouring regional markets. The 8-year (2010-2018) Vegetable Oil Development Project second phase (VODP 2) will achieve this by supporting farmers to increase their production of vegetable oil crushing material (both oil palm and the four

a car and operate a small medium income business in my small village of Kasekulo. I have also been able to move from the little house in which we used to live and now I have built this good house here. After deducting the 33% that is used to pay the loan, I still earn Shs2 million which I use to send my children to school and reinvest in the business.�

oilseed crops sunflower, soybean, sesame and groundnuts) and establishing commercial relations to directly link them to intermediaries and processors. Increased domestic vegetable oil production will improve the health of the population through increased intake of vegetable oil, contribute to food security, promote export diversification and import substitution. VODP 2 in its oil palm development component of the project uses an innovative approach to farmer support. It adopted a Public-Private Partnership (PPP) approach where the Government of Uganda, with support from the International Fund for Agricultural Development (IFAD) and a private investor BIDCO finance and implement the oil palm sub-project. Farmer organisations, the local government, central government and the private sector cooperate in directing production and management. A Project Management Unit coordinates activities at the national level while the Kalangala Oil

www.ea-agribusiness.co.ug


39 Palm Growers Trust (KOPGT) manages the project at the grassroots (Smallholder and outgrower farmers) level. BIDCO, through its subsidiary company, Oil Palm Uganda Limited (OPUL), in which KOPGT has 10% shareholding on behalf of the farmers, manages a 6,500 ha nucleus estate. The PPP model brings synergies to project implementation including technical knowhow, access to high quality inputs, agro-processing, business acumen and marketing expertise. It brings efficiency in production, commitment by the public sector and addresses public nature concerns like road network and confidence building among the partners. The active involvement of farmers as

partners in the PPP as opposed to just being beneficiaries was an innovation that supports project ownership by all partners involved and ensures sustainability. The 10% shareholding by the farmers in OPUL is another innovation that assures farmers of a voice in the company since they are represented on the board. Eventually they will receive dividends from the company. Farmers are involved in areas that affect them like having a voice in determining the monthly pricing of oil palm fresh fruit bunches (ffbs) and the costs of services extended to them through KOPGT. Another important innovation is the implementation of a farmers’ loan scheme at an interest of 10% per annum and the

provision of inputs. Since KOPGT started in 2006 it has registered 1,600 households that participate as smallholder farmers of oil palm. The farmers are provided with seedlings, cash for labour and inputs. Farmers begin paying back the loan when the harvesting of ffbs begins. Palm trees take four years to bear fruit. By May this year, 400 farmers had been harvesting since 2010. 50-60 tonnes of fruit are harvested every day by the farmers who in April alone earned over Shs430 million. Loan refunds are deducted in installments of 33% of the value of ffbs sold to OPUL through KOPGT. This enables loan recovery without stressing the farmers. Out of a loan portfolio of 27.8 billion Uganda

A farmer harvesting oil palm fruits in Kalangala.

www.ea-agribusiness.co.ug

July 2013


40

Palm oil trees in a nursery in Kalangala. shillings disbursed to smallholder farmers, 1.5 billion shillings has so far been recovered and will be re-invested in oil palm expansion to Buvuma district.

Smallholder farmer social empowerment The project enabled smallholder farmers to acquire and adopt a new crop and new technologies in crop production and management. The project led to increased incomes that enabled household farmers to educate their children in good schools. In Kalangala, 83% of the households could not educate their children before the project. It has been established that the oil palm project equipped farmers with the capacity to educate their children in good schools. Kalangala has 22 primary schools (18 Government aided, one private and 3 community schools), 3 secondary schools and 2 tertiary institutions. Despite the presence of these schools, some farmers send their children to neighbouring districts like Kampala and Masaka which are known to be of a higher standard than those in Kalangala district. Income from the project enabled farmers to meet medical expenses and a clinic was set up for the 2,000 workers of the OPUL 6,500 ha oil palm nucleus estate and the palm oil mill at Bwendero to provide

The project led to increased incomes that enabled household farmers to educate their children in good schools. In Kalangala, 83% of the households could not educate their children before the project.

health services. The project encourages land owners and tenants to register with KOPGT as smallholder farmers and empowers them through the formation of unit and block committees, and membership in the Kalangala Oil Palm Growers Association, (KOPGA). In the units and blocks, farmers are given skills in group dynamics, leadership, business management, project planning and management, monitoring and evaluation, financial management and credit and savings training. Through such organisations farmers learnt

how to elect their leaders, conduct meetings and make reports. In KOPGA, the smallholder farmers hold annual general meetings and elect their leaders every two years. Women make up at least one third of the unit, block, and KOPGA leadership. Some of the oil palm farmers have taken up political leadership at different administrative levels because of the capacity built through the project. One of the most remarkable achievements of the project has been the increased agricultural productivity. Farmers shifted from subsistence farming to commercial production for income. The smallholder farmers have been linked to the only commercial bank on the island through which they receive their loans from KOPGT and their earnings from oil palm sales. This has exposed them to the use of financial services in volumes that have attracted a second financial institution in Kalangala district. Money saved is being used to buy physical assets like land, vehicles, building permanent houses and setting up businesses such as wholesale and retail shops. The improved road network especially to the oil palm farms has helped farmers in marketing their produce and merchandise.

July 2013

www.ea-agribusiness.co.ug


Himalayan tent

Executive Chairs Mobile toilets Exhibition partitions

Multiflex tent

FIND US AT PLOT 18 RASHID KHAMIS ROAD – OLD KAMPALA P.O.Box . 12693 Kampala Tel: +256 414 348557/ 0752 777422/4 Email: Info@fotogenix.co.ug/ fotogenix@utlonline.co.ug Website: www.fotogenix.co.ug

OUT LETS/ KODAK SHOPS – STUDIOS Forest Mall Branch, Ground floor. Tel: 0752 777 450

Buganda Road Park Royale Building Tel: 0752 777 471

Oasis Mall Branch Tel: 0752 777 423

Johnson Street Tel: O752 777 428

Fotogenix Quality Quaranteed

Kampala Road Opp Main Post Office Tel: 0752 777466


HP 140-180

MF7100

Leading the way to growth and proямБtability 4 models: 140 to 180 hp Cab and Platform

VISION INNOVATION LEADERSHIP QUALITY RELIABILITY SUPPORT PRIDE COMMITMENT

21 Source of the Nile National Agricultural & Trade Show Magazine  

Every year, the Uganda National Farmers Federation (UNFFE) will hold an Agricultural and Trade Show at the Source of the Nile grounds in Jin...

Read more
Read more
Similar to
Popular now
Just for you