AGRICULTURE IS MORE THAN FARMING

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.