Background

I was generally afraid of cows (referred to as “ente” in the regional language), especially through milking. When expanding up, I watched from a distance although my grandfather milked. I could not trust the cow not to get angry (for its mammary glands getting touched) and provide a properly-aimed back kick to the gonads!

From the nutritional point of view (for these readers who are unaware, such as aliens and Martians), milk is an crucial meals substance necessary for our development all the way from youngster hood to adult hood, offering crucial proteins and calcium for the physique.

In Uganda, a significant quantity of households consume unprocessed milk sold at the retail price tag of Shs. 1,400 shillings for a litre as compared to processed milk which is sold at Shs. two,000 shillings a litre

Why invest in dairy-farming in Uganda?

In Uganda milk and milk goods are largely got from cattle and a little percentage from goats and sheep. The districts of Mbarara, Moroto, Bushenyi, Kotido, Masaka, Mbale, Kabarole, Mukono, Ntungamo, and Kamuli dominate production in this sector.

The cattle population in Uganda was final estimated as per the 2008 livestock census to be 11.4m. It is estimated that indigenous breeds account for approx 84% although the exotic and cross breeds account for the balance. It is also estimated that Uganda at the moment produces 1- 1.five billion liters of milk per year of which 30% is consumed on the farm (or households) and 70% is sold.

Though the domestic marketplace constitutes the key marketplace for milk and dairy goods, some of the processed milk and worth added dairy goods are exported to regional markets such as Kenya, Rwanda, Democratic republic of Congo, South Sudan and Tanzania.

Exactly where are the investment possibilities in the diary sector in Uganda?

Contemplating that Uganda's population will continue to develop by more than three% per annum, as properly as get wealthier (with persons beneath the poverty line minimizing) there are possibilities especially in the distribution and processing of milk. In certain, the windows of chance that I note for the dairy Sector involve the following:

  1. Investment in milk collection centres
  2. Investment in provide milk tankers
  3. Investment in packaged pasteurized milk distribution program
  4. Upgrade of Informal actors into mini dairies
  5. Upgrade of current dairy plants
  6. Investment in integrated farming/processing dairy organization
  7. Investment in transportation tanker cleaning facility.

So with the above in thoughts, how do you attempt to make revenue (“sente” in the regional language) from cows (“ente”)?

1st THE CONS

1. Promoting bottlenecks

1 of the most crucial issues facing dairy farmers in Uganda has been recognized as that of promoting their milk.

This is due to poor marketplace access (for instance due to negative roads and lack of facts on marketplace costs).

The answer for the “sophisticated pondering” farmer would be to companion with regional cooperatives in the provide of milk as they currently have properly established transport and infrastructure systems.

There is also the selection of having in touch with the massive scale milk processors to provide them. The downside is that their costs are usually reduced than retail costs, but the upside is the assured marketplace for your solution.

2. Low animal productivity

In Uganda, dairy farmers are largely little holder farmers. Numerous make for household consumption and only present the readily available surplus to the marketplace. Most rely on the conventional indigenous herd, recognized to have extremely low productivity. Moreover they mostly rely on the organic green pastures for feeding without having any meals supplements

For the sophisticated pondering farmer, it would be smart to use enhanced regional and exotic dairy breeds which are recognized for making higher quantities of milk and at the identical time carry out zero grazing although supplying feed supplements to enhance the animals' nutrition.

I also advocate planting elephant (napier) grass about three months prior to setting up the farm.

3. Availability of financing

Traditionally the agriculture sector has been viewed as higher danger and so there are restricted financing possibilities, say from venture capital firms and private equity firms (some of whom particularly never lend to the sector).

Nonetheless, there are increasingly a quantity of regional and international industrial banks such as improvement banks that present extended term financing for viable projects in the sector.

I would advocate that in order for the farmer to have greater probabilities of accessing loans, they retain records of their agriculture make to show that they do not have higher incidences of low milk yields (which is a single of the variables that tends to make the sector higher danger to lend to).

A different selection is to get affiliation to a co-operative or equivalent group exactly where they can get access to group loans by way of SACCO schemes. Donors and other help projects for agriculture also usually favor to lend to co-operatives and equivalent farmer groups.

Industrial bank lending prices in April 2013 averaged about 25% although SACCOs look to lend quantity in the variety of 10%.

THE PROS

1. Higher demand for milk in each domestic and export markets

Trusted information on milk consumption in Uganda is seriously lacking. Nevertheless, there are sturdy indicators to show that the dairy goods marketplace is expanding at a quick and steady price. Milk production development price has been estimated at more than eight% per annum. On the other hand there is unfulfilled provide for milk in the export marketplace with the top processing and distribution businesses unable to fulfill their provide markets. The most significant milk processor, Sameer Agricultural and Livestock Restricted (SALL), for instance claims to have current markets in 17 nations, but is constrained by low provide in servicing these nations.

The “sophisticated pondering” farmer has the chance to enter into partnership with the milk processors to make for them. He will having said that will need to make confident he has systems in location to comply with the rigorous excellent handle specifications of these processors.

2. Meals and wealth safety

A important quantity of households in Uganda personal a cow (albeit a lot of personal indigenous breeds) for the basic explanation that each milk and the cows are very tradeable and so in the occasion of economic distress, they offer meals safety (milk for the loved ones) and can be quickly sold, especially the very preferred exotic breeds.

Oh and let's not neglect (at the danger of ire from feminists) that these cows are a extremely vital supply of dowry (or “bride price tag”) in Uganda.

3. Return on investment

From a economic forecasting model, I have created I estimate the Return on Investment (ROI) for this sector is as follows:

  • Startup capital (A): Shs.44, 273,900
  • Profitability (B): Shs. 10, 589,863
  • Return on Capital (A/B): four.18 years

Now the fundamentals you need to get suitable prior to investing in this sector.

  1. Feeding. In addition to meals supplements, plant elephant grass in advance. This will make sure the cows are fed adequately. Feeding and milk production are straight correlated
  2. Buy of cows. I recommend you invest in pregnant heifers. My analysis shows you can get them less costly than the non pregnant ones. You therefore double your stock speedily. In acquiring, make sure you opt for breeds (possibly cross breeds) that are suited for the regional region (climate and illness resistance)
  3. Technical help. Pay a visit to a demonstration farm that practices fantastic farm management to enhance your information
  4. Records. Retain farm records to make sure you can assess your day-to-day milk yields as properly as assess the excellent of your milk. This will be especially important as you expand and say want to provide the bigger scale milk processors and
  5. Water. Make certain you have enough water nearby. Cows drink a lot of water and therefore you either will need a tank or as you advance, construct a bore hole to offer the water.

Final word

I nevertheless worry getting kicked by a cow getting milked so, I nevertheless say, “no thank you sir, I will stick to hiring a herdsman from a friend's village in Nyakahita, Mbarara.”

The lighter humor aside, dairy production has the possible to be a lucrative organization chance for farmers in Uganda. There is generally area to develop, each for startup farmers as properly as the much more established players.