Profitable Agro-business

With aggressive development plans in place, Uganda’s agriculture sector has been a driving force in helping farmers increase productivity

Agriculture is a prime sector of Uganda's economy. Over 80 per cent of women are employed in agriculture, which accounts for over 75 per cent of total agricultural output. Since most Ugandans live in rural areas and practice farming, raising agriculture revenues — a centrepiece of the country’s National Development Plan — is essential to decreasing poverty, improving wealth, and generating jobs, especially for women and youth.

In the coming years, this sector will be a critical factor in the country's attempts to decrease poverty and achieve economic growth. The country is blessed with abundant arable land with mild climate, and regular rainfall. Uganda has one of the highest population growth rates almost 3.3 per cent, which is the biggest factor of increased agricultural consumption in Uganda. Government initiatives to increase the country's competitive edge in the agricultural production sector have helped boost the industry. According to World Bank, the country's average annual agricultural growth grew from 2.80 per cent in 2016 to 5.367 per cent in 2019.

Major subsistence crops include plantains, cassava, sweet potato, and maize. Coffee is the most significant export crop, although tea, tobacco, and cotton are also important.

Small farmers dominate the agricultural industry in Uganda, most of whom mix subsistence farming with cash crops and animal production. Except in portions of Northern Uganda, where pastoralists' property is communally held, most farmers own their land privately. Although the majority of agriculture is still done by hand or with cattle-driven ox ploughs, farming is increasingly becoming more mechanised. Cash crop farming on a large/commercial scale may be found in Uganda's Central, South, and South Western regions.

Cereal crops — Maize, millets, rice, and wheat are the most important cereal crops cultivated in Uganda. Apart from wheat, these crops supply staple sustenance to more than half of the world's population. They're also becoming more important in terms of providing revenue to rural people and the national economy. Rainfall amount and distribution determine high potential locations for each crop to a great extent. Typically, maize requires moderate to heavy rainfall evenly distributed throughout the growing season.

Finger Millet — After maize, finger millet is Uganda's second most significant cereal. Its production is centered in the country's east, north, and southwest. The districts of Apac, Lira, Gulu, Kitgum, Iganga, Kamuli, Soroti, and Tororo account for up to 65 per cent of the country's total land area.

Grain Sorghum — In Uganda, grain sorghum is the third most significant cereal crop. It is grown extensively in dry short grass areas in the northern, eastern, and south-western regions of the nation. It is highly significant in the districts of Kabale, Kisoro, and Rukungiri. It can withstand drought better than maize or finger millet, making it an essential food security crop. Sorghum is critical to the country's food security and the livelihoods of many rural people.

Coffee — In Uganda, coffee contributes the highest revenue. The crop plays an important role in increasing the country’s GDP and household livelihood is on a stable and promising growth path, with greater potential for creating jobs and value addition aimed at both domestic and international markets.

Uganda is a significant producer of Robusta coffee, but Arabica is also grown, particularly on the slopes of Mount Elgon and Mount Rwenzori, and coffee accounts for 20-30 per cent of the country's foreign exchange earnings. Uganda is dependent on smallholder farmers, who typically intercrop coffee with food crops like bananas and beans.

Agro processing and value addition in agricultural production can take different forms and levels ranging from the basic to more sophisticated level e.g. packaging, processing, cooling, drying, extracting or any other type of processes that differentiates the product from the original raw commodity. Agriculture and agro-processing offer a diverse range of investment options, including cut flower production for export, oil seed production and processing, cotton cultivation, ginning, spinning, and weaving, and animal product production and processing.

Why invest in Uganda’s agriculture sector?

- Uganda's agriculture industry offers a variety of very profitable investment options, including both profit-oriented investments and collaboration opportunities.

- As one of the 55 African Union member states, Uganda has consistently increased its agricultural development, and has been recognised as one of the top 20 nations in achieving the Comprehensive Africa Agriculture Development Programme's development goals (CAADP).

- Uganda is a reliable destination for investment and a highly competitive player in the world market, with noteworthy success in Public Private Partnerships and a consistent growth in government investment each financial year.

Opportunities

Modern farming technology, such as the utilisation of machines and drones, are used on the over-3,000-acre farm, and in the recent times, Uganda is working to accelerate agricultural commercialisation in order to boost local household incomes. Agriculture provides a living for roughly 70 per cent of Uganda's population, according to government statistics. Through a tripartite agreement with FAO, Uganda and China have been conducting the China-Uganda South-South Cooperation initiative for many years. Through the project, small scale farmers in rural Uganda will benefit from the on-the-farm training to boost production. Chinese technicians and specialists will continue to share skills and technology on the agronomic practices with local farmers. According to Uganda's Ministry of Agriculture, around 3,000 farmers were trained in cereals, horticulture, aquaculture, and livestock at the end of the project's second phase in 2017. Local farmers were taught how to plant Chinese hybrid rice by Chinese specialists. According to official research, hybrid rice may yield up to 10 metric tons per hectare, compared to 4.5 metric tons per hectare for traditional rice.

There are huge investment opportunities in Uganda’s agriculture sector, including production, input supply, value-added processing, standards compliance and export, and post-harvest management. There is room to increase coffee production the amount of coffee exported to the United States. Uganda is Africa's largest coffee exporter, yet just three per cent of its exports are sent to the United States. The government has devised a bold, yet comprehensive strategy to boost coffee output from 360,000 tonnes per year to 1.2 million tonnes per year by 2025.

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