AfricaLive: Please introduce Nile Fresh Produce to our readers and your place in the Ugandan agricultural sector.
Kwesiga Pius: We are a company that got off the ground back in 2010 and we are not only farmers but also aggregators. We own a 10,000-hectare farm in northern Uganda. The farm exists mainly for the production of seeds but we also grow crops like soybean, sesame, sunflower, rice and maize. Avocado production is also in the pipeline and will suit our processing capabilities. Our processing plant mainly does cleaning and drying but we will look into avocado oil production when the time is right.
As aggregators, we work with over 100,000 farmers from 12 districts in northern Uganda whom we train on best practices. We also provide seed loans so that they can have access to Avega maize, soya bean, rice and sunflower hybrid seeds. Extension services like crop training are also offered along with crop insurance in the event of perils like excess rainfall or drought. Our loan facility also provides for the acquisition of fertilizers and pesticides.
When they harvest, they pay us in a breakdown of $20 per acre for seed costs, $15 per acre for insurance costs, and then $28 per acre for extension services. The total comes to $80 which is paid after harvests are made. Farmers also offer us a chance to buy surplus produce from them, which we do often. Surpluses are also bought by other local entities with some exported to neighbouring countries like Kenya.
Our operation needs adequate financing and that is why we have strong partners like Equity Bank. The bank finances our purchasing of seeds and fertilisers as well as paying farmer invoices whenever they supply grains to us. We recommend farmers to the banks for loan financing while acting as their guarantors. We also partner with insurance companies to help us secure our credit service to local farmers.
Our services have been far-reaching with us making contact with over 600,000 farmers. Farmers find our outreach attractive because of the extension services we offer along with our production capabilities, and team mobilization. We are benefiting immensely from the support extended by the Ministry of Agriculture as well as the tax exemptions we have been afforded in certain periods.
AfricaLive: How do things change for the better in a farmer’s life thanks to their interaction with you?
Kwesiga Pius: We offer farmers guaranteed income because they know production will be high thanks to the quality seeds we avail to them. This is a big step up compared to their previous life of recycling grains as seeds and then producing lower quality yield. Now they can send their kids to school and have more disposable income available.
Farmers also gain from our training because we teach them about farming as a business. We empower them to calculate the cost of inputs and also do proper record keeping to find out if they are making profits or losses. We also encourage them to form groups of 20 or 30 so that they can benefit from access financing to acquire small farm machinery like threshers.
AfricaLive: Kindly give us a bit more detail about the training you offer to the farmers.
Kwesiga Pius: The training is mostly about density stocking to ensure that grains are stocked as per proper standards. The standard stock level for maize is 10kilos per acre, rice 30 kilos and sunflower 2 kilos. Stocking appropriate kilos per acre determines their yield. We also train them about on-time weeding as well as proper spraying regimes and early disease detection. Farmers also have to learn about the building of cribs to keep their produce off ground for proper drying. Two key things lead to the deterioration of grain quality; one is aflatoxin concentration and the other is discolouration. These two menaces affect the marketability of the produce and we teach farmers to avoid them.
AfricaLive: Do you find that most of Uganda’s farmers don’t know this information?
Kwesiga Pius: Yes, most of them don’t and those that do need to be incentivised to follow through with best practices. Once they realise that they can realise more yield and make more money, then they will pay attention. Our agriculture people are also not very well remunerated compared to some other sectors and the government only allocates a small percentage of its budget to that sector.
We seek a national budget that is commensurate to the number of citizens that depend on the sector for their daily livelihood. We also seek to have farmers producing to the maximum while also getting maximum benefits. Once we start realizing these outcomes, the next step becomes how we can make this sustainable. Farmers need to know that if they produce 15 bags of a certain grain at a certain time of the year, that can easily fetch about $1,000 or so. Predictability like that empowers farmers to plan and make informed decisions.
AfricaLive: You mentioned that you have had some storage issues to address. What challenges do you face in order to scale up your business and your impact?
Kwesiga Pius: We have a storage capacity of up to 100,000 tons but we want to expand to 300,000 tons to accommodate our 3 to 5-year plan.
One of the challenges we have is a lack of access to affordable financing. Our financing challenges come from a lack of agricultural banking services which offer seasonal-friendly grace periods as well as good interest rates. The high electricity tariffs in Uganda don’t do us any favours either.
Our ambition is to have at least 100,000 storage capacity in every region so that we can bid farewell to our storage capacity issues. Logistics issues have also been a problem because of impassable feeder roads, but this will change soon with the construction of the SGR railway.
AfricaLive: What motivated you to get started with this business?
Kwesiga Pius: I am an agriculturalist by profession and I have worked for the World Food Program (WFP) for several years and have been involved in projects funded by the Japanese NGO JICA. While at (WFP) a colleague and I came up with an idea that encouraged the body to invest in farming equipment that we will give to farmers. Farmers would then use the equipment to produce food for the WFP to purchase.
The idea was rebuffed by (WFP) because it is not a profit-making organisation but we were encouraged to maybe seek partners elsewhere. So I took up the idea and sold it to farmers and some government agencies. We did a seed growing pilot project on some leased land in a district called Oyam and the yield at first was very poor. We gave it another go and kept going a few times before things started to look up. Despite the early challenges, I knew the potential and aimed to benefit from the economies of scale.
AfricaLive: How many farmers have you trained so far and how many do you aim to train in the coming years?
Kwesiga Pius: So far we have trained about 60,000 farmers and interest is growing. We are focusing on scaling by training potential trainers. If we train 100 trainers, then each can train 300 farmers. The next step will be to digitize our work and monitor our trainers as they do their work. We aim to train up to 500,000 farmers within the next 3 years.
AfricaLive: Do you incorporate issues relating to sustainable agriculture into your training?
Kwesiga Pius: Yes, one of our key pillars is smart farming and conservation.
We also teach farmers about the negative effects of deforestation, the need for crop rotation while also promoting the use of biogas. Sustainable farming is a major area of focus for us and we aim to teach that to our farmers widely.
AfricaLive: Do you see opportunities for value addition and the creation of more value from the produce in Uganda?
Kwesiga Pius: I believe this is the future especially in a place like Uganda which has the potential to be an African food basket. If you look at the entire region that consists of Kenya, Rwanda, Tanzania, Burundi, DRC, and South Sudan, Uganda has 40% of the arable land. We also have massive potential if you look at production per acre of a commodity like rice.
Egypt produces an average of about 5 tons per acre of rice while we only produce about half of that yet we have more fertile soil than them. We will get there by improving our practices and improving our seed quality. Once we improve our production capacity, we can then get into value-add processing. Our focus is on maize, rice, sesame and avocado.
We are especially keen on avocado and sesame oils because we have assessed their market potential in Asian and European markets. We feel that Uganda can ramp up its production capacity because the costs of production are low coupled with favourable climatic conditions.
AfricaLive: What kind of partnerships are keen on having to help facilitate the next steps of your development?
Kwesiga Pius: One would be the kind of partner interested in supporting the improvement of community livelihoods through initiatives like smart farming. We would also appreciate a partner who will help us expand our agro-processing capabilities. Overall, an ideal partner should have interests that align with ours to a large extent.