Many farmers in Uganda still get little from their work as they are still stuck in the cycle of selling their produce in raw form. In many instances, farmers are forced to sell off their produce, even when prices are low, because they are perishable. Most of them lack storage facilities that can extend the produce’s shelf life.
To overcome this challenge, in 2011, a group of three farmers in Lugala, Rubaga Division, Kampala, led by Kalim Kalamagi came up with an idea to come together and add value to their produce.
For the start, they sold the idea to other farmers in Rubaga division and began sensitising them on the benefits of working together.
Within a short period of seven months, many farmers and traders accepted to work together. When they got to about 800 who were willing to pool resources, they formed the Rural United Small Business Association Network (Rusba).
The association was later registered as a public company. To raise money, each person paid a membership fee of Shs60,000. This money was the initial capital.
To start the association, they rented a house in Lugala, where they put their headquarters and based all their activities. Member farmers of the association come from different parts of the country.
Kalamagi, who is Rusba’s executive director, says that the main objective of forming the association was to save farmers, who were being cheated by middlemen.
The middlemen were buying their produce at very low prices and then selling it at a higher price by simply packaging or drying it.
Getting the idea
“By adding value to the produce, the middlemen were selling at very high prices and getting a lot of profits,” he says. For instance, a farmer was selling a pumpkin at Shs500 to middlemen but when that farmer dries the pumpkin and sells to the association, he or she is paid Shs 8,000 for each kilogramme.
Three raw pumpkins make one kilogramme of dried pumpkin, he adds. So, by simply drying the pumpkin, a farmer gets Shs 6,500 more.
Kalamagi recalls from where he got the idea of involving the association in processing agricultural produce. In 2009, when he paid a visit to his friend in US and later went to Europe, he realised that processed organic foods are in demand.
To kick-start their business, they used Shs150m out of their start-up capital of Shs480m to buy milling machines for maize, soyabean and dried foods. They also bought packaging material.
But because they lacked expertise in mixing foods, they hired the nutritionist at Shs1.5m to assist as well as teach them to mix the different ingredients to formulate nutritious food products. They paid him Shs1.5m.
The rest was used to pay rent for the premises and also buy produce from member farmers.
We also bought two simple solar driers made from polythene bags, iron sheets, wire mesh and timber at Shs500,000. We use these in drying fruits such as pawpaws, pineapples, bananas, pumpkins, carrots and Irish potatoes.
Under the arrangement, the members process their produce from their respective farms and then sell to Rusba. They may also sell their produce in raw form.
“But even when they sell in raw form, they get better prices than when they sell to middlemen,” Kalamagi says adding that for the start, some members agreed to supply the produce and get paid later.
“We also got two workers who did the work of cutting and drying pawpaw, pumpkin and pineapples at our premises,” he says.
To package our products, we went to manufacturers of packaging boxes, who made for us branded boxes with our Badang trade name. Under this, we made porridge from Irish potatoes, banana, soya bean, maize flour and pawpaw.
We made all these products by mixing in different ratios and products, maize flour, pawpaw powder, banana powder, soya bean powder, pumpkin powder, Irish powder and mushroom powder.
But the beginning was not easy. Almost 70 per cent of the first products, we produced got spoilt because we had used very poor packaging boxes that were soft. They easily got torn, which caused to the products to spill or get contaminated with water or dust.
Because of this setback, they temporarily halted production until they could get standard packaging boxes.
Meeting the demand
“But because we were determined, we did not relent. So we decided to look for a manufacturer who would make for us high standard packaging boxes until we got what we wanted and resumed business,” Kalamagi explains.
Currently, they produce one tonne of each product every month, though he notes that this is still small given the high demand of the products on both the domestic and export markets. Nigeria, Kenya, Zimbabwe and South Sudan are some of the countries they export to.