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

COME HELP BEAT BACK HIV/AIDS

Uganda has made tremendous strides in containing the AIDS pandemic. For some of us who were around in the 1980s and saw the worst effects of the AIDS pandemic, the way the country has contained the disease is not what we had envisaged back then. Ignorance, stigma and lack of drugs surrounding the disease saw thousands die horrible deaths – wasting away, tortured by opportunistic diseases and being shirked by family and a society out fear.  The doomsayers were projecting a major fall in our population, a collapse of the economy and a total breakdown of social cohesion. That the country is still around and fighting back the disease successfully, could not have been envisaged in those scary days of the 1980s when the disease came into the public conscious. Thankfully rather than sweep the problem under the carpet like many of the neighbouring countries, President Yoweri Museveni led a fight back against AIDS that had at its core widespread dissemination of infor...

A SHIFT AWAY FROM AGRICULTURE IS CRITICAL FOR UGANDA

Anyone who has half a stake in this country would be a keen observer of the economy and the direction it is taking. In the last three decades the economy has shown strong growth, only slowing to overcome bad weather, a global financial crisis or unrest in the region. Compared to when I started out in business, it has become a more liberal economy, with individual initiative being rewarded more and more. While the economy is still dominated by the informal sector, the formal sector is growing annually. But the biggest shift in the economy has to be the reduction in agriculture’s share of the economy from more than 80 percent to about 25 percent today. This has happened despite the leap in the production of everything from bananas to coffee or from milk to maize. What has happened is that more of the economy – though not nearly enough, has been taken up by industry, construction and services. This is how it should be and in fact, more work is needed in shifting 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 ...

LET US GIVE SMEs A CHANCE

Something is wrong when most of Ugandan business is shut out of the government procurement process. This is happening in Uganda today. Micro-, Small & Medium Enterprises (MSMEs) account for 90 percent of the private sector. These account for 65 percent of national output (GDP). On the other hand 75 percent of our now sh32trillion national budget is earmarked for public procurement but the MSMEs’ share of this action is only 15 percent. It does not take a rocket scientist to see that such numbers are behind the huge inequalities in our society and why the majority of us do not have hope of a better and brighter future. Thankfully this is not an insurmountable problem. If MSMEs had access to more opportunities accruing from the national budget the benefits to themselves and to the nation as a whole would be huge. These would include increased production which would lead to job creation, raise incomes at household levels, leading to reduced income ine...

SPORTS AS AN ANALOGY FOR BUSINESS

Like everybody else I know, my spirit was lifted by the success of our athletes at the World Athletics Championships last week. The diminutive Halima Nakaayi showed the heart of a lion, sprinting over the last 100m of the women’s 800m event to snatch victory from a more favoured American runner. It was so uplifting to watch. Subsequent stories about the challenges she has had to overcome to get where she is now were testament to the determination of the woman. Joshua Cheptegei’s victory, while no less inspiring, had a different quality to it. Cheptegei was the man to watch going into the event. He won previously at the Commonwealth Games last year and the in the just concluded Golden League. He was a silver medalist in the 10,000m at the last World Championships in London, pipped to the tape by the now retired Mo Farah. Cheptgei still had to battle the Kenyans and the Ethiopians all the way. But as a favourite he lived up to expectations, which sometimes is more diffic...

LOCAL CONTENT IS NOT A DONE DEAL, WE NEED TO DO MORE

This year’s “Oil & Gas Convention & Regional Logistics Expo2017” has just concluded after three days of discussion, exploration and soul searching. First oil in Uganda is expected by 2020 and this Expo among other efforts are targeted at getting our local businessmen ready to take advantage of this historical development. At the risk of sounding like a broken record, the discovery and eventual exploitation of our oil resource is one of those once in a generation events, that can transform this nation, not only on a macro level but also in our individual lives. For starters at least $20b will be spent over the next three years in infrastructure development and other things that will ensure we are ready to pipe and refine our oil. During the exploration phase about $3b was spent by the international oil companies, with on three in every ten dollars being retained here. That was an exploration phase and one hopes that we have learnt enough from that period to ...

CRYPTOCURRENCIES ARE COMING, ARE WE READY?

In the last few decades in Uganda we have seen the currency become so worthless a large part of the population resorted to barter trade – exchanging goods for goods. Then the currency stabilized and we enjoyed having money in our pockets. Our money habits continue to evolve. Increasingly we don’t need physical cash to do our business.  Debit cards, mobile money and e-banking services are pushing us fast towards a cashless society. And now we are moving into a more intangible space – cryptocurrency. "As I understand them these are digital currencies, generated using encryption techniques, that also verify fund transfers. Also that no central bank is involved in creating or regulating these currencies... The more widely known cryptocurrency, Bitcoin was launched in July 2010 and its fate has been at best back ground noise to many of us, if at all. it has registered some limited attention but mainly for   speculative gains. In recent years it has seen ju...