Background
I have always been afraid of cows (called “ente” in the local language), especially during milking. When I grew up, I watched from afar while my grandmother milked. I could not trust a cow, so as not to get angry (because her mammary glands were affected) and deliver a well-targeted back stroke to the gonads!
From the point of view of nutrition (for those readers who do not know, such as aliens and Martians), milk is an important nutrient necessary for our growth, up to the children's hood to the adult hood, providing the main proteins and calcium for the body.
In Uganda, a large number of families consume raw milk sold at a retail price of Shs. 1,400 shillings per liter compared to processed milk, which is sold to Shs. 2000 shades of liters
Why invest in a dairy farm in Uganda?
In Uganda, milk and dairy products are mainly derived from cattle and a small percentage of goats and sheep. Mbarara, Moroto, Busheni, Kotido, Masaka, Mbale, Kabarole, Mukono, Ntungamo and Kamuli regions dominate in this sector.
Recently, the number of cattle in Uganda is estimated at the 2008 census in animal husbandry to 11.4 million people. It is estimated that bedrock makes up about 84%, while exotic and cross-breeds make up a balance. It is also estimated that currently 1.5 billion liters of milk are produced in Uganda per year, of which 30% is consumed on the farm (or houses) and 70% is sold.
Although the domestic market is the main market for dairy and dairy products, part of the processed milk and value added dairy products are exported to regional markets such as Kenya, Rwanda, the Democratic Republic of the Congo, South Sudan and Tanzania.
Where are the investment opportunities in the diaries sector in Uganda?
Given that the population of Uganda will continue to grow by more than 3% per year, as well as getting richer (with people below the poverty line), there are opportunities, especially in the area of distribution and processing of milk. In particular, the windows of opportunity that I mark for the dairy sector include the following:
- Investments in milk collection centers
- Investment in milk supply tankers
- Investing in a packaged pasteurized milk distribution system
- Modernization of informal entities in mini-dairy farms
- Modernization of existing dairies
- Investment in integrated agriculture / dairy processing business
- Investment in tanker cleaning facilities.
So, based on the above, how are you trying to earn money (“sit down” in the local language) from cows (“ente”)?
FIRST CONSULTATION
1. Bottlenecks in marketing
One of the most pressing problems faced by dairy farmers in Uganda is recognized as marketing their milk.
This is due to poor access to markets (for example, due to bad roads and lack of information about market prices).
The solution for the farmer of “advanced thinking” was to cooperate with regional cooperatives in the supply of milk, since they already have well-developed transport and infrastructure systems.
It is also possible to contact large milk processors for delivery. The disadvantage is that their prices are often lower than retail prices, but the growth potential is a guaranteed market for your product.
2. Low animal productivity
In Uganda, dairy farmers are large farmers with small farmers. Many produce for home consumption and offer only surplus in the market. The most rare are traditional traditional herds, which are known to have very low productivity. In addition, they mainly rely on natural green pastures for feeding without any food additives.
For farmer's best thinking, it would be wise to use improved local and exotic dairy breeds that are known to produce large amounts of milk and at the same time perform zero grazing, offering feed additives to increase the number of animals. food.
I also recommend planting elephant grass (napier) about 3 months before building the farm.
3. Availability of funding
Traditionally, agriculture has been considered a high risk, and therefore there are limited financing options, for example, from venture capital firms and private investment companies (some of which are not specifically provided to the sector).
However, there are increasingly a number of regional and international commercial banks, including development banks, that offer long-term financing for viable projects in this sector.
I would recommend that the farmer has a higher chance of accessing credit, they keep records of their agricultural products to show that they do not have high rates of low milk yield (which is one of the factors that make the sector a high risk for lending).
Another option is to get affiliation with a cooperative or similar group, where they can access group loans through SACCO schemes. Donors and other agricultural aid projects also often prefer to lend to cooperatives and similar farming groups.
Lending rates of commercial banks in April 2013 averaged about 25%, while SACCO seemed to borrow in the range of 10%.
PROFI
1. High demand for milk in both domestic and export markets
Reliable data on milk consumption in Uganda is seriously lacking. However, there are strong indicators showing that the dairy market is growing at a fast and steady pace. The growth rate of milk production is estimated at more than 8% per year. On the other hand, in the export market there is an unfulfilled supply of milk, while the leading processing and distribution companies can not fulfill their markets. The largest dairy processor, Sameer Agricultural and Livestock Limited (SALL), for example, claims to have existing markets in 17 countries, but is constrained by low demand for servicing these countries.
The farmer of "advanced thinking" has the opportunity to enter into a partnership with milk processors to produce for them. However, it needs to make sure that it has systems in order to accept the strict requirements for quality control of these processors.
2. Food safety and wealth
A significant number of households in Uganda own cows (although many of their own indigenous breeds) for the simple reason that both milk and cows are highly profitable and therefore they provide food security (milk for the family) in the event of a financial disaster and can be easily sold, especially very desirable exotic breeds.
Oh, let's not forget (at the risk of getting away from feminists) that these cows are a very important source of dowry (or “bride prices”) in Uganda.
3. Return on investment
From the financial forecasting model I developed; According to my estimates, the return on investment (ROI) for this sector is as follows:
· Initial capital (A): Shs.44, 273 900
· Profitability (B): Shs. 10, 589 863
· Return of capital (A / B): 4.18 years
Now the basics that you should get right before investing in this sector.
- Feeding. In addition to nutritional supplements, the plant is elephant grass in advance. This will ensure uninterrupted cow feed. Feeding and milk production are directly correlated;
- Buying cows. I suggest you buy pregnant chicks. My research shows that you can get them cheaper than not pregnant. You have twice your stock quickly. When buying, make sure that you choose rocks (possibly cross-breeds) that are suitable for the local area (climate and disease resistance);
- Technical support , Visit a demonstration farm in which good farm management is practiced to improve your knowledge;
- Records. Keep a farm record to make sure you can evaluate your daily milk production, as well as assess the quality of your milk. This will be especially necessary as you expand and say you want to supply larger dairy processors; and
- Water. Make sure there is enough water nearby. The cows drink a lot of water and, therefore, you either need a tank, or as you go, build a hole for water.
Final word
I'm still afraid of being drunk a cow that is being milked, so I still say: “No, thank you, sir, I will stick to hiring a shepherd from a friend’s village in Nyakahita, Mbarara.
A lighter humorous side, dairy production can be a profitable opportunity for farmers in Uganda. There is always a place for growth, both for beginning farmers and for more famous players.
