Just how important is maize to Uganda?
After 6 years of Ugandan boarding school with having maize as a daily meal (commonly called “posho“), I am not particularly keen on it as a meal.
Nevertheless, maize is the most highly cultivated and traded crop in Uganda. It is also the primary food source in institutions such as schools, prisons, military and the police. Besides food for human consumption, the crop is an important ingredient in livestock and poultry feeds, as well as a highly preferred starch used in the fermentation of local non formal alcoholic brews.
To underline the importance of this crop, the government of Uganda has prioritized maize as one of the 10 agricultural crops within the Rural Development and National Zoning Strategy.
So with the above in mind, how do you proceed to grow maize and thus help the government in its goal of poverty alleviation?
FIRST THE CONS
1. Fluctuating prices
Maize in Uganda has traditionally been grown during the rainy seasons of Mid-February or March to June, and second rains from Mid-August to December. As a result, the whole sale and retail prices of maize grain and flour fluctuate significantly with low prices just after the traditional harvest season and high prices during “off seasons”. These fluctuating prices are also a result of market inefficiencies in Uganda as farmers often lack of information on more suitable prices.
There are however two solutions for the “advanced thinking” Ugandan farmer:
a) Market Information Services (MIS). These give regular information via SMS, radio and their websites. Examples that have recently been set up include farmgain, agrinet and ratin. They provide retail/wholesale prices for Kampala, up country markets and in some instances regional markets (such as Kenya).
Warehouse Receipt System (WRS). Its introduction was pioneered with support from the World Food Programme (WFP)who buy a significant part of maize in Uganda. This system allows a farmer to take their produce to a designated warehouse where it is dried, graded, packed and stored. The warehouse receipt they (the farmer) receive is evidence of storage and it can even be used as security to get a loan (60% of value of grain) from selected banks.
Storing of the product by the farmer until a time when prices stabilize or when they can find a suitable buyer helps them have more control over their produce compared to when unscrupulous middlemen rule the market.
Climate change has resulted in less than predictable rains, even in Uganda which has traditionally had known rainy and dry seasons.
In order to counter this, we would recommend that the “advanced thinking” farmer invest in a water reservoir and simple mechanical pump system like the “wonder pump” which costs approximately $150.
Another option is to use improved seed varieties. Those developed in Uganda like the Longe varieties (Longe 1, Longe 4, Longe 5 et al) are drought resistant varieties. Various seed companies in Uganda sell them (in the range of Shs. 2000-2500 per kg).
AND NOW THE PROS
Maize can be inter-cropped with beans. This has various advantages including increased profitability from the same acreage and reduced need for fertilizer (as beans naturally fertilise soil).
Care should however be taken before considering inter-cropping as crops have different cycles and there might be difficulty in use of say mechanized implements like tractors.
2. Good Return on Investment (ROI)
I make the following assumptions in making my estimate:
a) The farmer has 15 acres (about 6 ha), embraces irrigation and plants Longe 5 improved seed varieties;
b) The farmer can access a low-interest rate loan (10%) from a co-operative society to which he belongs. This loan will finance purchase of equipment; and
c) The farmer is selling maize grain (and not maize flour).
On the basis of the above, I estimate the Return on Investment (ROI) for this sector is as follows:
· Startup capital (A): Shs.34,188,000
· Profitability (B): Shs. 24,331,975
· Return on Capital (A/B): 1.405 years
My personal dislike for maize as a food aside, ignoring this important crop would seem a rather “short-sighted” decision as growing maize should almost definitely be included in the portfolio of a serious Ugandan investor or entrepreneur.
Its diverse use not only for human food consumption but for animal feeds makes it a very important crop. In addition it has export prospects via WFP (relief aid) and to our neighbors like Kenya and Southern Sudan.
Furthermore, the introduction of the revolutionary warehouse receipt system means that in addition to enabling farmers choose when to sell (hence reducing fluctuating prices) it can now be used as security for loans. Lack of access to loans for agriculture has long been a stumbling block to development of the sector. It seems maize is contributing to solving this problem.