Skip to main content

GOOD BUSINESS SENSE WILL HELP OUR AGRICULTURE


The recent drought has at once alerted us to our deficiencies in our agriculture production and reawakened a drive to revitalise the sector.

How is it that a country with half the arable land in the region has people suffering starvation? How is that our crops dried up in the fields when a fifth of our land mass is under water? And on a macro level how is it that the 70 percent of our people who rely on the land directly for a living, account for 30 percent of our economic output or GDP?

Given our natural endowments in land, weather and manpower it is obvious that we are performing well below our potential. Reversing this trend of affairs should be the concern of everybody in the country.

A lot of the debate has revolved around increasing production, value addition and market access locally and internationally. And rightly so.

Taking one example the Uganda Coffee Development Authority says that the average yield per hectare is half a ton of coffee. But meanwhile within our own borders there are farms that produce more than two tons a hectare by employing improved farming methods, the judicious use of the fertiliser and irrigation.

According to a recent World Economic Forum study done on the continent irrigation improves farm productivity by 90 percent, fertiliser use by 61 percent and mobile based information services improve farmer incomes by as much as 30 percent.

But what brings all this together would be extension services which are shown to raise productivity by as much as 80 percent.

Production is where it begins but similar deficiencies – or worse, show up, up and down the agricultural value chain.

But in all the debate we seem to ignore or pay little attention to is the role of entrepreneurship or the businessman in this process of commercialisation of agriculture.

The entrepreneur manipulates the factors of production – land, capital and labour in order to achieve a return be it profit, or these days, to create a social good in what is called social entrepreneurship.

Part of the reason we are in the midst of such abundance but remain poor is because our entrepreneurship skills are lacking, not up to the challenge of exploiting our natural bounty.

How prepared are we to take advantage of the agricultural opportunities around us?

There is a market locally, regionally, even internationally for whatever we produce from groundnuts to eggs to ginger to goats, name it. Because for as long as the human race exists and continues to function the way it does, food will always be in demand.

Money can be made wherever there is a will and a market but what often happens is that the person who has the deal is not up to it.

This is the key challenge I see. That we do not have the entrepreneurial capacity to aggregate our resources to not only jump start production but to take advantage of the vast market in food all around us.

I have been a business man for all of my adult life and the better part of my childhood and I can attest to the saying that luck is when opportunity meets preparation.

At PSFU our members benefit from a host of business development services that can put anybody in a good position to take advantage of the opportunities in the agricultural sector.

It cannot be emphasised enough but it is one thing to grow plants or rear animals but another to take them to market and show a return on a sustainable basis.

Our agribusinesses – which is how we should think about it rather than just farmers, need to understand how to do market research, how to keep books, how to source funding, how to cooperate with other farmers, suppliers and clients .

All these can be learnt by trial and error but why not hasten the process and get good advice.
This is important because to make agriculture a sustainable enterprise not only for individuals but for the whole country we require more than planting and harvesting or herding animals, we need good business sense to underpin the process.

(March 2017)

Comments

Popular posts from this blog

NOT ONLY THE HARDWARE BUT THE SOFTWARE TOO

In the middle of September the United Nations released its annual Human Development Indicator (HDI). This index serves as an indicator of the quality of life of a country’s people by measuring the health, education, inequality, poverty and security standards. Aside from the statistical measures of development like GDP growth, this is obviously a better measure of how people are actually doing. In this year’s HDI report Uganda was ranked 162 out of 189 countries with a HDI score of 0.516. The index goes from zero to one, the nearer you are to one the better. Our score puts us in the low human development category. But as bad as that sounds we have been worse. In 1990, the earliest year that these figures were compiled our score was 0.311 even the UN recognises that we have improved 66 percent in the last three decades. According to the UN figures life expectancy has risen to 60.2 years   from 45.5 in 1990; expected years of schooling has doubled to 11.6 fr...

THE MUKWANO I KNEW

We have lost the greatest Ugandan entrepreneur of our time, Mr Amirali Karmali, more popularly known as Mzee Mukwano. I have known Mzee Mukwano for more than 40 years and most of what I am today is due to him. And I am not alone. "He has helped countless people through school – as he did me. Helped countless more in business – as he did me. And he has been a steadfast friend and source of support to countless more – as he was to me.... I first met Mukwano around about 1977. My mother was the secretary for the chief of operations at Uganda Airlines, a man I knew only as Hamid. Mukwano had come to charter the Uganda Airlines’ Hercules plane and I happened to be around the office then. He was a short man, an unassuming man, but clearly a serious businessman who would charter the plane to bring in goods that were in high demand here. He run a popular whole sale shop in Nakasero – Egesa Commercial Agencies, a beehive of activity and the go-to place for anythin...

FINANCING OUR ENTREPRENEURS, A CHALLENGE WE CANNOT IGNORE

In recent weeks the issues of financing for business has been in the news, in one form or the other. We have seen the challenge a past minister is facing with having to hang onto his home. The case is in court, so we can’t discuss its merits and demerits, just to say he may have fallen prey to some predatory practices, with the lender skirting dangerously on the edge of the law. Across the border in Kenya a cap on bank lending rates has been repealed. Three years ago Kenya’s parliament passed a law restricting lending rates to two percentage points above the rate at which the central bank lent money. In reaction banks pulled back their lending to businesses, depressing the economy and prompting the reversal. So now banks can “properly” price their loans, often to the discomfort of small and medium sized businesses. The two incidents are related and speak to the availability and cost of credit. In my business career I have benefitted immensely from credit. It is next...

OIL: WE NEED TO GET OUR ACT TOGETHER… YESTERDAY

(Published February, 2017) We are on the cusp of an important period in the history of this country and whether we can derive maximum advantage from this will depend on our capacity to put aside petty rivalries and come together as the business community. Over the next three years at least $20b or almost the size of the entire economy will be spent in readying us for first oil. This money will be spent on building infrastructure in the oil bearing areas of western Uganda, on our side of the oil pipeline to the Tanzanian port of Tanga, on the oil refinery and any number of things that will be needed to support oil production. About $3b (sh11trillion) was spent during the exploration phase of which less than three in every ten shillings   or about sh3trillion went to local contractors and suppliers. But this happened over eight years. This despite our local disorganisation and ignorance of the industry and its dynamics. However we should not be content with t...

CONGRATULATIONS ON YOUR GRADUATION, ITS NOW TIME TO WORK….

Thousands of students will be graduating from their respective universities in coming days and months. Makerere, our country’s oldest university will kick off its ceremonies on January 15th and the other universities will follow. The graduates have already had a taste of the real life, having finished their studies mid last year and tried to get employed. Many know by now that the world can be harsh and unforgiving. I hope many are tightening their belts in readiness for the struggle ahead. Some may have decided to kick the tin down the road by continuing with school. And others may have given up altogether. My prayer is that there are more of the first and less of the last kind. In talking to young people, I find that what is needed is a reorientation of their minds – a mindset change. Let me share with you certain facts to help manage their expectations of the world and how they can fulfil their potential in our context. First of all, the world owes you ...