What you need to know:
- However, finding the right investment opportunity is not easy. Food-and-agribusiness investing requires a deep understanding of specific crops and complex value chains that encompass seeds and other inputs, production, processing, and retailing.
Food and agribusiness have a massive economic, social, and environmental footprint providing employment and 30 feeding requirements. Agricultural technologies that raise productivity and the addition of land for cultivation may ease the food burden.
However, finding the right investment opportunity is not easy. Food-and-agribusiness investing requires a deep understanding of specific crops and complex value chains that encompass seeds and other inputs, production, processing, and retailing.
As we prepare for the next farming season, we present agribusiness ideas you can pursue.
Despite the challenges facing poultry production, there is still a window for tapping into the sector.
In 2019, poultry meat exports for Uganda was $743,000. The poultry meat exports grow at an average annual rate of 342.46 per cent.
“Poultry has a large market. Although chicken is at the top of the list, other products can be honed,” says veterinarian Yahaya Were.
To be successful in poultry, he notes, producers must seize opportunities in the value chain, starting with the feed. The cost of the feed often accounts for about 70 per cent of the price of the chicken. That implies that investing in chicken feeds is worthwhile.
Black soldier fly larvae
Derrick Mununuzi, an aquaculture technologist at Rwebitaba Zonal Agricultural Research and Development Institute (ZARDI), says it is unethical to feed fish fishmeal.
He, therefore, suggests looking into the opportunity of investing in Black soldier fly larvae as an alternative to costly fishmeal.
He says that apart from being highly nutritive as they are rich in proteins, Black soldier flies are an effective way of dealing with disposal of waste in cities.
Black soldier fly larvae thrive in and around compost piles, where their larvae help break down organic material, from rotten produce to animal remains and manure.
The larvae then commonly grow to about 1,000 times their size. Black soldier fly larvae can eat twice their body mass in food per day.
The idea is to feed the larvae with food waste and then turn them into animal feed.
“These larvae make a great candidate for investment. The Black soldier fly larvae could play a role in reducing the environmental impact of feeding animals,” Dr Mununuzi said.
Pasture is the way to go. In intensive cattle production systems, silage is the insurance farmers require for their feeding needs. It is not only relevant for production, but to also meet the changing climatic conditions.
Animal forages can be hayed or used as silage to increase its efficiency in terms of consumption and production potential.
According to scientists, dairy cows require the absolute minimum amount of fibre up to 30 per cent of Neutral Detergent Fibre (NDF) or 17 per cent Crude Fibre (CF).
Dr Hussein Kato, a livestock nutrition scientist at the National Livestock Resources Research Institute (NaLIRRI), Namulonge says forage fibre largely determines the “filling” effect of the ration.
The fibre component also provides ample energy to the cow as the animal begins its lactation.
Accordingly, farmers with large spaces of land can grow forage which they can ensile and sell to fellow farmers in urban settings.
There is a growing potential for cassava value chain in Uganda. Experts explain that high-quality cassava flour, an industrial input used in the brewery and packaging industry, is highly demanded.
Cassava starch is also used to make biscuits, breads, and puddings. It is also an ingredient in non-food items such as paper, pharmaceuticals and textiles.
“Uganda imports almost its entire starch requirement. There is a big market opportunity to replace these imports and bring in new knowledge and technology to produce cassava starch,” notes Joseph Ekwangu, a soil scientist at Buginyanya Zonal Agricultural Research and Development Institute (BugiZardi).
Nile Breweries is currently encouraging farmers to grow cassava which will be used as a partial substitute for imported barley in beer production.
Experts at Nile Breweries say brewing with cassava reduces the sugar in beer which is healthy.
Naro researchers have produced Mkumba, an industrial variety, with high ethanol content and high cyanide levels making it desirable for brewing.
According to Ekwangu, the Mkumba variety provides hope for millions of farmers that depend on cassava production.
Tapping into fish production
In per capita terms, only Uganda’s per capita fish consumption of 12.5 kg was higher than the rest of Sub-Saharan Africa.
Farmed tilapia, a freshwater fish, is looked at as a scalable, sustainable and affordable means of feeding the region’s growing population.
“Due to overexploitation, fish in fresh water bodies will not be able to meet the additional demand. We believe that aquaculture production will have to accelerate and have identified tilapia to be the fish to do so,” Derrick Mununuzi said.
Learning from Kati Farms founder Lovin Kobusingye, a Kampala–based farm, who produces up to 17 products such as sausages, fillets, salted fish, sundried fish, fish powder and fish burgers., fish can be more lucrative.
While commissioning the community grain storage facility for grain farmers at Katente Industrial Park in Kyegegwa Town Council in May, it emerged that crop storage facilities present compelling opportunities.
Post-harvest handling of produce remains a big challenge in Uganda, undermining quantity, quality and price of produce as well as food security and income in the long term. Interventions such as the use of airtight storage equipment and construction of bulking stores for collective marketing have been put in place for farmers to reduce these losses. However, these technologies are not yet accessible to most rural farmers who still use the traditional ways of keeping grains.
Yet the biggest paradox for produce farmers is the unending cry of giveaway prices when they are forced to sell at a canter yet the businessmen will always blame the low quality for the prices.
The solution is always to wait for the right time to sell, a process that can eliminate the challenge of middlemen that enjoy most of the benefits.
Emily Doe, WFP Head of Area Office for southwestern Uganda, the WFP Head of Mbarara Area, the satellite collection point constructed as part of the Agriculture Emergency Programme, which is the second in Tooro region, says what can help in improving the resilience of smallholder farmers.
She stressed: “When we are able to help farmers add value by enabling them to choose when to sell their crops, it is satisfying.”
Vincent Magandaazi, the director of Maga Property Solutions in Ntinda, Kampala explains that investing in agricultural-focused land is a good investment.
Owing to high property taxes and a slump in urban realty, agricultural land promises greater long-term returns.
“First of all, agricultural land is inexpensive in comparison to urban land,” Magandaazi says. Such land is available in areas such as Luweero, Mubende and Kayunga at as low as Shs5m per acre.
Retired extension worker Mugerwa says land is the backbone of agriculture.
“All agricultural production is carried out on land. Land produces such crops as maize, coffee, tea, rice, name it,” Mugerwa says.
The changing climatic condition warrant irrigation as the next big thing and a sure investment option.
Climate change is making more people food insecure.
Gladys Ndagire Kisekka, a farmer with Mpumu Mixed Farm in Ntenjeru, Mukono District, noted that they missed two maize harvests since December last year because of poor rains.
As an option, she applied for irrigation equipment from Mukono District. Irrigation innovations are becoming fundamental for developing modern irrigation systems.
Rikki Verma, the of CEO Nexus Green, an irrigation company, says that irrigation has a massive impact from a commercial side of production.
Therefore, many farmers who are not farming near water sources, are desperate for irrigation equipment, making it a viable investment opportunity.
Rikki says that investments in irrigation are vital for reducing poverty, improving food and nutrition security and boosting agricultural production, strengthening rural livelihoods and managing land and water resources sustainably.
Piggery is increasingly becoming important in Uganda and especially in areas where there is increased pressure on land.
Dr Sam Akankwasa, who pioneered the pig breeding programme in Rukungiri District for poverty alleviation, says piglets are a more viable option in the area.
Using a formula of one pig producing at least 10 piglets every month, three times a year, he argues that farmers are able to raise more than 100 piglets in a year. Relatedly, if a farmer started with one cow, he can only have about two cows in three years because it takes nine months to produce a calf.
“Piggery can create economic stability. By using piggery, our parents cannot fail to have school fees for their children because pigs can offer a consistent supply of income,” Dr Akankwasa says.
The outlook for pig business is promising. Although pigs are not considered among the 20 priority sub-programmes of the country’s Agricultural Sector Development Strategy and Investment Plan (DSIP), about 17.8 per cent of all households own at least one pig in Uganda. The number of pigs increased from 0.19 million in 1980 to 3.2 million in 2008, according to the national livestock census 2018.
Uganda’s population is roughly 85 per cent Christian, which is a big potential market for pork. According to the Food and Agriculture Organisation (FAO), at 3.43kg, Uganda’s pork per capita consumption is the highest in sub- Saharan Africa.
“There are no problems with the pig meat market. Production is still low and farmers cannot satisfy the market. All we can produce can be consumed locally,” Akankwasa says.
Investing in piggery could be worth every cent in the next year.
There is a spike in sales of fresh produce with focus on superior produce. Supermarket supply operations are at the heart of this boom.
Mugerwa, who specialises in dairy production, explains that consumers demand fresh and hygienic products. For a keen investor, sourcing the right products to supply is crucial, leading to better business.
“To be sure of the quality, there must be a direct link with the farmers,” Mugerwa advises, adding that affordability is also key to the consumers.
Irrigation is fundamental to ensure food security. Currently, more than 40 per cent of global agricultural products are produced on irrigated land, which constitutes close to 20 per cent of the total global arable land.
This makes investment in irrigation equipment and services one of the key investment opportunities.