Argentina,
Brazil and lately Chile has proven that countries like Uganda with huge
comparative advantage in the production of agricultural commodities with
well-organized value chains can join the premier league of nations that are
well respected and forces to reckon with. Sadly, most of the agricultural
commodities, and particularly food staples produced in Uganda, are lost
post-harvest due to lack of value added processing. For instance, only 26% of the total
agricultural volume produced in the region is processed post-harvest on average
as shown in Figure 1.
Figure 1. Value of post-harvest processing in total value of
production.
It has been estimated that the East African Community (EAC) region loses about 30% of cereals, 50% of roots and tubers, and 70% of fruits and vegetables post-harvest. Because of inadequate value added agro-processing, the region’s exports are mainly in raw form, which means that a high proportion of commodity value does not accrue to the region. Reversing this trend could improve the region’s food and nutrition security, and help create jobs for the millions of unemployed men, women and youth.
It has been estimated that the East African Community (EAC) region loses about 30% of cereals, 50% of roots and tubers, and 70% of fruits and vegetables post-harvest. Because of inadequate value added agro-processing, the region’s exports are mainly in raw form, which means that a high proportion of commodity value does not accrue to the region. Reversing this trend could improve the region’s food and nutrition security, and help create jobs for the millions of unemployed men, women and youth.
Studies
have shown that low value addition in the EAC is caused by, inter alia, weak agricultural commodity
value chain development and linkages; low investment in last mile infrastructure
(roads, water, energy, telecommunication, etc.); gaps in requisite skills and
technological know-how; limited scale economies in production and processing;
inadequate financing; limited and unsustainable risk mitigation strategies;
inadequate investments in farming, agribusiness development and development of
agro-industries; and weak legal, regulatory and governance frameworks. Even where agro-industries exist, they are
often faced with low capacity utilization arising principally from lack of
adequate and timely supply of the right quality and quantity of raw materials
due in part to low agricultural productivity, poor last mile infrastructure and
scattered and small-scale production that increases collection, coordination
and transaction costs.
Two commodities,
namely, milk and beans are a common denominator in diets in Uganda across
different income divides thus good candidates to consider in studying their
value chains. Milk and beans prominently feature among the priority staple food
commodities with potential for agro-processing in the EAC as shown in Matrix 1.
Commodity
cluster
|
Commodities
with highest potential for agro-processing
|
Potential
areas of investment
|
1. Cereals
|
Maize, Rice
|
Post-harvest
handling (drying, storage & milling); processing (canning &
pre-cooking)
|
2. Pulses
|
Beans, Soya
beans
|
|
3. Fruits
|
Mangoes
|
Collection
centres, cold storage; refrigerated transportation; packaging, fruit pulp
|
4. Vegetables
|
Tomatoes
|
|
5. Oil crops
|
Sunflower,
Palm oil
|
Refining,
aggregation of crude oil, contract farming & Mini-Estate Processing
Enterprise approach by medium-scale processors
|
6. Nuts
|
Peanuts
|
|
7. Roots & tubers
|
Cassava,
Irish potatoes
|
Preservation
(intermediary products for better transportation & handling), starch
& glucose
|
8. Livestock
|
Dairy, Fish
|
Collection
centres, cold storage, refrigerated transportation, fish feed, milk powder
& UHT milk
|
Source:
E3AIS (2013).
Sadly, besides cooking at homes and
the catering sector, there is no significant value addition to beans in Uganda;
consumers also tire of monotonous flavour. Cans on the market are of poor
quality. Uganda the leading bean producer in Africa imports canned beans from
Italy, Brazil, and USA to mention but a few. Targeted capacity
building in areas where Uganda has an edge would be a very good starting point
given the resources and organization needed to develop functional value chains.
As a result, an
increasing number of people are abandoning or reducing their bean consumption
despite its documented high nutrient content and health benefits. Prospects of
marketing increased quantities of beans and new agro-processed bean products
within the EAC markets requires carefully examining production and marketing
constraints (increased farm productivity, producer incentives, and access to
better markets). Equally important is examining prospects for increasing demand
for beans and agro-processed products (understanding consumers’ tastes and
preferences, increased consumer awareness of benefits of consuming beans and
other value-added products, increasing consumer choices of value-added
products, etc.) especially treatments such as de-hulling, soaking, milling,
fermentation and germination or malting and cooking enhance the digestibility
and nutritional value.
A case in a point is the powder
milk production and market. Although the EAC offers a good market for powered
milk, it suffices to
note that as a region we have practically handed over the market to major
players in New Zealand, Australia, Denmark, USA and Mid-Eastern countries that
are dry desert sands because any investor seeking to establish powder milk processing
capabilities at the local, regional and global level needs to pay attention
three issues that are currently to our disadvantage, namely: 1) Capability to
deliver at least 200,000 litres of milk per day. 2) Low energy bills since
milk has to be stabilized, homogenized, concentrated, spray dried and bed
dried. 3) Technological dependence. A reconditioned
powder milk line costs in the region of € 1,700,000. A brand new one of any of
the three brands of Relloy, Damro, or Carlisle costs between the € 3,500,000
and € 4,000,000. More often than not, Carlisle demands to do a detailed
feasibility study themselves, before providing the quotation and the customer
has to meet the cost of the study.
Succinctly studying
milk and beans to specific targeted capacity building along respective value
chain is a worthy while undertaking for DRUSSA fellowship and makes sense to vast
majority of farmers and policy makers in Uganda.
Prepared by: Prof. Dr. Eng. Noble
Banadda, DRUSSA Fellow
