Why Kenya’s food insecurity is good news for Ugandan farmers

To boost agricultural production in Northern Uganda, smallholder farmers can access funding through private equity schemes to upscale production. PHOTO/STEPHEN OTAGE

What you need to know:

  • Whereas Uganda is the leading exporter of food to Kenya, the food is largely being exported under an informal and haphazard arrangement, which makes it difficult for the government to fight food insecurity in the country.

The Kenyan Government has expressed the urgent need for Ugandan food stuffs to be exported to his country in a structured way for the mutual benefit of all the stakeholders.

Mr George Owinoh, the Kenyan High Commissioner to Uganda, argues that structuring food exports would also ensure that international standards for food safety are complied with.

For decades, Kenya has been Uganda’s leading trading partner in the East African region. 
During the last 26 years, Ugandan exports to Kenya have increased at an annual rate of 11.8 percent, from $16.1 million in 1995 to $292 million in 2021, according to official statistics. The main exports to Kenya are food materials. 

During the same period, Kenyan exports to Uganda increased at an annual rate of 5.67 percent, from $198 million in 1995 to $831 million in 2021. These mainly comprised cement and palm oil.

Whereas Uganda is the leading exporter of food to Kenya, the food is largely being exported under an informal and haphazard arrangement, which makes it difficult for the government to fight food insecurity in the country.

According to Uganda’s Ministry of Trade and Cooperatives, Uganda is the largest informal supplier of grains to the Great Lakes region, contributing to more than 70 percent of regional consumption. 

However, the informal grain trade between Uganda and its neighbours is around five times higher than that of the formal grain trade.  

A week ago, the High Commissioner traveled to Northern Uganda to visit farmers in the rural districts of Kiryandongo, Lira, Dokolo, Lamwo and Amuru, as part of his plan to drum up support for the plan.
He told journalists that he also wanted to meet the farmers face-to-face to thank the Ugandan farmers for feeding Kenya and to motivate them to produce more because food insecurity is still a serious concern in Kenya.

He also checked on some Kenyan companies that are spurring production by creating a ready market for farm produce such as cassava, maize, soya and sorghum at very competitive prices. 

For example, TUA Uganda has set up a processing factory for fresh cassava in Lira City, which converts the tubers into dry cassava chips.  The product has a ready market both locally and in Kenya and has already farmers in Dokolo wealthy.  For example, Mr Geofrey Okwir, a cassava farmer in Dokolo Subcounty, received Shs.8 million from selling his cassava to the factory early this year, and is building a permanent house from the proceeds.
On the other hand, Shamba Bora Uganda Ltd operates in Kiryandongo Distrct as a bulk buyer of maize, soya and sorghum, which it dries, cleans and sells to off-takers such as Uganda Breweries Ltd and as well as food processors across the region. 

Producing for export
The Kenyan High Commissioner traveled with a team of private sector players who wanted to assess the challenges faced by small holder farmers and processors and how they could be helped to produce more for the export market.
TAD-Capital & Investment, a private equity firm offers long-term financing to agro enterprises and acts as a mortgage manager – bridging the gap between financial institutions and agro business enterprises and farmers groups. 

According to Dr Julius Peter Kinyera, the chief investment officer of TAD-Capital & Investment, they are exploring ways to invest heavily in TUA Uganda Ltd, Shamba Bora, and NUCAFE, which are supporting coffee farming in northern Uganda.

Together with the High Commissioner, several face-face engagements were held with the respective District and Civic leaders as well as hundreds of small holder farmers and farmers’ groups, to appreciate the pertinent issues and what more needs to be done to make Northern Uganda a ‘food basket’ for the Great Lakes region. 
In Kiryandongo District, Ms Edith Aliguma Adyeri, the district chairperson, told the team that Kiryandongo is a refugee-hosting district with more than 87 tribes and nationalities.  

Unfortunately, despite the diversity of tribes and nationalities, rich fertile soils and favourable weather conditions, farmers are still depending on rudimentary methods of agricultural production, to produce food crops such beans, maize, cassava, coffee and soya beans. 

The district officials commended Shamba Bora Uganda Ltd, a Kenyan Cereals and Grains processing and aggregating company for providing farm inputs and organising farmers.
Mr Alfred Mwangi, the chief executive officer, says they have invested more than Shs1.3b to set up a cereal processing facility from which they are currently handling maize, soya, sorghum sourced from about 1,400 small-holders farmers. 

While the plant has an installed capacity of 8,000 tonnes, it can only process 1,000 tonnes due to low production and productivity, which they attribute to lack of mechanised agriculture.

In the last four months alone, Shamba Bora has paid out Shs750 million to maize farmers in the district. Of the maize they processed, 60 percent was consumed domestically while 40 percent was exported to Kenya.

Dr Kinyera said they are exploring ways of providing funding to the investors to purchase equipment and expand their operations in the districts of Kiryandongo, Lira, Amuru and Lamwo. 

In Kiryandongo, Dokolo and Lira, the High Commissioner told the local leaders about the business opportunities for both countries, farmers and local governments that are available in the companies represented by the members of the delegation he travelled with.

He noted that Kenya is hungry for beans, coffee, soya, sorghum, maize, millet, rice, cassava and other cereals produced in Uganda but it can access only 40 percent of it, which is not enough.
He said if Uganda could produce the food in the structured way, the financing from the Kenyan market can, help the Ugandan government.

In Amuru District, Mr Micheal Lagony, the District chairman, urged the Kenyan farmers to start coordinating their operations with the district authorities for the mutual benefit of the community, the district and the investors themselves because currently, there is no mechanism for supervising their activities.

“How are you engaging the community to be part of your investment? Since you are now the nucleus farm, have you raised model farmers? How are you engaging SACCOs, are you allowing them to be part of your investment? Are they having access to your machinery so that you become the centre for development?” He asked the investors.

He explained that since the opening of the East African Community market, his district which is the largest in the country with the most favourable agricultural conditions including two rain seasons, has been grappling with influx of unregulated South Sudanese, Ethiopian, Kenyan and traders who roam around the district and villages looking for different food and animals to buy food. 

He said, lately, more than ten Kenyan farmers have established mechanised farms whose operations are beyond the district control and it is now becoming a source of food and income security.

Asked how much land they are currently cultivating and the kind of funding they are looking for, Mr James Odera, the director of Normah Agro Farm in Amuru District said they are cultivating grains on 2,000 acres of land. 
Each acre of maize yields 2.5 tonnes. He said they would like a silo system where they can store the maize for some time before selling it.