Wednesday, February 21, 2018


The second annual Harvest Money Expo held this weekend was a great success, judging by the number of people who trooped to Namboole for the event.

It’s heartening to see too that the interest in agriculture is being shown by all classes of people. Heartening because to fulfil our agricultural potential as a country we have to have all hands on deck, because as it is, while we feed ourselves, we have not even begun to scratch the surface of what we are capable of.

As it is now everyone is being encouraged to get into production, which is as it should be, because we need to produce more to take advantage of economies of scale and more importantly to kick start the agribusiness sector that will create thousands of jobs.

"The truth is the hundreds of jobs we need will not be created on the farm. As production methods become more mechanised there will be less use for manual labour. It is arguable that, with the entrance of more computerised processes in the factories even there manual labor will be required less and less. 
But for us here that might still be some time away.

In the US at the end of the Second World War there were 30 million farming families, people who derived a livelihood directly from their land, today they are under three million. The rest have gone to work in industry and services.

Chances are that is the same way our agriculture will go too.

However when we think of agriculture we only think about growing crops or rearing animals. The right way to think about agriculture is as a value chain, where production is just one part of a whole chain and not necessarily, the beginning.

For argument’s sake let us start on the farm. So one can be the farmer who produces the crop or rears the animals. But one can also be the person who deals in the inputs – tools, drugs, fertiliser, herbicides or pesticides. Down the chain one can be the trader who buys the produce or the warehouse owner who provides storage or the man with the grinding mill or the trucks to ferry the produce to the market. Further down one can be the exporter or the processor. If we want to be more sophisticated one can be the breeder or the nursery bed owner who sells to the farmer. Or one can even be in finance, specialising in meeting the sectors peculiar needs for money. And we haven’t even started yet.

Getting down and dirty on the farm may not be your thing. And that is fine. There are many ways one can insert themselves into the value chain.

One farmer I know after fumbling for close to a decade has found his niche. He is going to be a breeder of quality dairy animals. While dairy cows on the regular market can go for up to a million he is already selling his animals at more than five million shillings a cow.

Interestingly he zero grazes his herd of about 40 animals and has managed yields of up to 40 liters of milk daily. The shed occupies under an acre of land, the remaining 40 cares he uses to produce the silage to feed the cows. When we last talked he had silage to last more than a year and half.

He pointed out to me too, that one can decided to only grow hay for sale to the market. There is already demand, which he anticipates will grow with time.

Another person is exploring the use of coffee as an ingredient in cosmetics. She has set up her supply chain, her production facilities and is in advanced stages of product development.

Quality cuts has no herds of its own. It buys its meat from the market and packages that for sale in the super markets.

Dutch Radobank is one of the world’s biggest agricultural bank, which while it has other traditional banking products, is on the cutting age of financing agribusiness at home and around the world.
It is important that we appreciate this perspective because for our agriculture to reach its full potential the whole value chain, from farm to plate, has to be well developed. Specialisations up and down the chain have to be created.

"Of course if our production is not adequate we cannot develop specialisation and the temptation will always be for people in the sector to try and do it all. A nice ego trip but which does not lend itself to efficiency....

To support industry we need to produce much more than we are actually producing right now. Businessman Patrick Bitature pointed out in a commentary last week that in 2007 we produced about 14,000 tons of tomatoes. That is the equivalent of 700 20-ton containers.

Sounds impressive until you try and workout what that means for industry.

A small tomato paste processing plant which goes for about $10,000 (sh37m) can go through a ton an hour of tomatoes, he pointed out. Assuming 50 plants – one in every two districts, working 12 hours a day it would take less than a month to process Uganda’s annual crop.

Simple math shows that to have these plants optimally employed throughout the year, we would need at least 168,000 tons or 12-times the 2007 output to make these processing plants viable.

And I am sure the same calculation can be applied to any product we hope to produce.

Tuesday, February 13, 2018


There is a real danger that the sugar industry in this country will not be around in 20 , ten , even five years if government continues to fold its arms and do nothing about current developments.

A bit of background should help put the scene in context.

Uganda’s sugar industry goes back to the early 20th century when the precursors of the Kakira Sugar Works and Sugar Company of Uganda Ltd (SCOUL) planted their first seedlings in Kakira outside Jinja and in Lugazi respectively.

By the time of independence we were already self-sufficient in sugar production with the addition of Kinyara Sugar in western Uganda.

The Idi Amin era and the expulsion of the Asians in 1972 sent our production back to scratch. The industry has only been resuscitated in the last 30 or so years.

The three major players have used the time tested method of using outgrowers to supplement the sugar cane harvested from their nucleus plantations.

They have helped the outgrowers with seedlings, credit and other extension services to ensure the productivity of their farms, in addition they have provided social services like health and education for their areas.

In fact seeing as government has forgotten how to promote agriculture, the ministry would do well to study these industrial estates to learn how to support farmers in increasing the productivity of their farms.

"Until the turn of the century the three big sugar concerns have been expanding their production to the point that we are currently the only country in the community that has a surplus of sugar, meaning that we do not have to import sugar...

But they haven’t stopped there. The three industry have created supplementary industries – power generation and ethanol manufacture from the by-products of sugar production.

Of all the industries government has tried to grow the sugar industry has been the most successful. 

They are the largest employer of any industry with at least 20,000 direct employees and tens of thousands more of people employed up and down the supply lines.  Last year financial between themselves they paid about sh300b in taxes. And from nearly zero 30 years ago installed capacity has been beefed to crush 400,000 tons per annum.

But in a classic case of biting the hand that feeds it government through its indifference or even worse out right collusion is overseeing the collapse of the industry.

In the last decade government has licensed more than half a dozen mills to crush cane without a corresponding increase in the acreage of sugar plantation. It does not take rocket scientist to work out that the sugar cane has to come from existing plantations.

"The trade ministry has disingenuously argued that there is no law that prohibits the licensing of sugar millers. The existing policy, issued in 2010, while it lays out the parameters within which the sugar industry will operate, has not got the force of law the ministry argues. In the meantime they has been a pointed lack of urgency in passing a law for the sector. We know that if this government wants something passed it will be passed in double quick time. Passing the Sugar Bill, 2016 is clearly not one of its priorities....

It should be because not only have these new operators disrupted the operations of existing players --- they claim they are plants are now working at only 47 percent but thousands of tons of sugar have been smuggled into the country, meaning existing players are just stockpiling the sweetener – 600,000 bags at last count, priced out of the market by the smuggled sugar.

The three major producers have only just expanded their production capacity to take advantage of regional opportunities having planned for the increased acreage under cane, which they now find is being poached voraciously.

The Uganda sugar industry faces the real danger of going the way of their Kenyan counterparts. Kenya, who supplied the region in the days when our sugar industry was in doldrums, have seen their industry collapse following a similar pattern as is happening in Uganda, a deliberate conspiracy between the sugar importing cartels and corrupt government officials. As a result the government has opened the flood gates for imported sugar to come in unabated.

At the height of its powers Kenya’s sugar industry was producing almost 700,000 metric tons of sugar annually and has still been brought to its knees. Uganda at its peak in 2015 produced 420,000 tons of sugar.

The big three are not angels and their might be legitimate concerns about how they do business, but that is not cause to throw the baby out with the bathwater.