Finding lucrative markets for agricultural products
Posted Wednesday, February 20 2013 at 00:00
Most farmers in Uganda produce for both home consumption and market the surplus. But there are those that are purely commercial. But all these share a common problem: How and where to sell their produce.
Hannington Migadde is among the farmers who are tapping into the profitable market of agricultural products in Juba, South Sudan. He grows pawpaws on his one-acre piece of land in Luweero.
“There is a Ugandan trader in Juba who gives me twice what the middlemen in Kampala would give me for each pawpaw,” he says.
“For a pawpaw that I used to sell at Shs 500, he gives me Shs1,000 or Shs1,500. So, when they are in season, I simply call him up.”
Clearly, he is making much more money than he did before, which he attributes to pure luck because this particular contact to Juba just came by looking for pawpaws. That is how they met. However, other farmers may not be as lucky yet they would like to enjoy more profitable returns on their agricultural products.
For example, bringing the products to markets in Kampala like Nakasero or Owino St Balikuddembe instead of selling them to middlemen at the farm may guarantee a farmer the kind of returns he is looking for.
But how does a farmer make this happen? If a farmer wants to take his or her produce to Nairobi or any other place in the country after hearing about the lucrativeness of the product (For instance, there has been word around the poultry-keeping communities in Kampala that eggs are fetching a better return in Mbale) how does a farmer successfully tap into this opportunity?
Do thorough market research
Much as you might get lucky, it would be foolhardy to simply load your product on a truck and drive towards Juba or Mbale just because you were told (or you think) that what you are selling is doing well there.
Aidah Nakimuli, who sells Irish potatoes wholesale in St Balikuddembe market that she gets from Kabale, says a farmer needs to compare the farmgate price and the wholesale price in the market.
“You can find that after factoring in things like transport, taxes and parking space, you will have Shs1m more in profits,” she says.
But Nakimuli says, a farmer should be willing to meet a given set of requirements to enjoy this extra income.
“For example, a farmer has to arrive at the market by 4am if you are to secure parking space, meaning that you spend the whole night travelling from your destination.
Most importantly, you must have a trustworthy contact; someone who will tell you that you need to wait a week before bringing your cassava if the market is saturated with this item which usually causes a price drop,” she explains.
Apart from not reaping as much as was anticipated when the market is saturated, a farmer can get stuck with their produce with no buyer(s). This will translate into more costs: spending on meals, accommodation, street parking, and paying more to the truck which you have kept waiting for an extra day.
Even worse, if your product is in the fresh food category like green pepper, carrots or cabbage, just a day spent without being offloaded may be enough to make it lose its appeal, which would result in a reduced price offer the next day.
To Nakimuli, these unpredictable factors, (even with a profit of Shs 1m or more at stake), may not be worth the risk and stress for a farmer, who has spent the last six months toiling on the farm, only to make a loss.