How Profitable Is Dairy Farming in Uganda?

Background

I used to be at all times afraid of cows (referred to as “ente” within the native language), notably throughout milking. When rising up, I watched from a distance whereas my grandfather milked. I could not belief the cow to not get offended (for its mammary glands being touched) and ship a well-aimed again kick to the gonads!

From the dietary perspective (for these readers who’re unaware, equivalent to aliens and Martians), milk is a vital meals substance wanted for our progress all the way in which from youngster hood to grownup hood, offering important proteins and calcium for the physique.

In Uganda, an enormous variety of households devour unprocessed milk offered on the retail worth of Shs. 1,400 shillings for a litre as in comparison with processed milk which is offered at Shs. 2,000 shillings a litre

Why put money into dairy-farming in Uganda?

In Uganda milk and milk merchandise are largely obtained from cattle and a small proportion from goats and sheep. The districts of Mbarara, Moroto, Bushenyi, Kotido, Masaka, Mbale, Kabarole, Mukono, Ntungamo, and Kamuli dominate manufacturing on this sector.

The cattle inhabitants in Uganda was final estimated as per the 2008 livestock census to be 11.4m. It’s estimated that indigenous breeds account for approx 84% whereas the unique and cross breeds account for the steadiness. It is also estimated that Uganda presently produces 1- 1.5 billion liters of milk per 12 months of which 30% is consumed on the farm (or households) and 70% is offered.

Though the home market constitutes the most important marketplace for milk and dairy merchandise, a number of the processed milk and worth added dairy merchandise are exported to regional markets equivalent to Kenya, Rwanda, Democratic republic of Congo, South Sudan and Tanzania.

The place are the funding alternatives within the diary sector in Uganda?

Contemplating that Uganda’s inhabitants will proceed to develop by over 3% each year, in addition to get wealthier (with individuals under the poverty line decreasing) there are alternatives notably within the distribution and processing of milk. Particularly, the home windows of alternative that I word for the dairy Sector embody the next:

1. Funding in milk assortment centres
2. Funding in provide milk tankers
3. Funding in packaged pasteurized milk distribution system
4. Improve of Casual actors into mini dairies
5. Improve of current dairy crops
6. Funding in built-in farming/processing dairy enterprise
7. Funding in transportation tanker cleansing facility.

So with the above in thoughts, how do you attempt to earn money (“sente” within the native language) from cows (“ente”)?

FIRST THE CONS

1. Advertising and marketing bottlenecks

One of the vital issues going through dairy farmers in Uganda has been acknowledged as that of selling their milk.

This is because of poor market entry (for instance on account of unhealthy roads and ignorance on market costs).

The answer for the “superior pondering” farmer can be to companion with regional cooperatives within the provide of milk as they have already got effectively established transport and infrastructure methods.

There may be additionally the choice of getting in contact with the big scale milk processors to provide them. The draw back is that their costs are sometimes decrease than retail costs, however the upside is the assured market on your product.

2. Low animal productiveness

In Uganda, dairy farmers are largely small holder farmers. Many produce for dwelling consumption and solely supply the obtainable surplus to the market. Most depend on the standard indigenous herd, recognized to have very low productiveness. Moreover they primarily depend on the pure inexperienced pastures for feeding with none meals dietary supplements

For the superior pondering farmer, it will be smart to make use of improved native and unique dairy breeds that are recognized for producing excessive portions of milk and on the identical time perform zero grazing whereas providing feed dietary supplements to spice up the animals’ diet.

I additionally suggest planting elephant (napier) grass about 3 months earlier than organising the farm.

3. Availability of financing

Historically the agriculture sector has been considered as excessive threat and so there are restricted financing choices, say from enterprise capital companies and personal fairness companies (a few of whom particularly do not lend to the sector).

However, there are more and more plenty of regional and worldwide industrial banks together with growth banks that provide long run financing for viable tasks within the sector.

I’d suggest that to ensure that the farmer to have greater probabilities of accessing loans, they maintain data of their agriculture produce to point out that they don’t have excessive incidences of low milk yields (which is without doubt one of the components that makes the sector excessive threat to lend to).

An alternative choice is to get affiliation to a co-operative or related group the place they will get entry to group loans through SACCO schemes. Donors and different support tasks for agriculture additionally typically choose to lend to co-operatives and related farmer teams.

Business financial institution lending charges in April 2013 averaged about 25% whereas SACCOs appear to lend quantity within the vary of 10%.

THE PROS

1. Excessive demand for milk in each home and export markets

Dependable information on milk consumption in Uganda is critically missing. Nevertheless, there are robust indicators to point out that the dairy merchandise market is rising at a quick and regular charge. Milk manufacturing progress charge has been estimated at over 8% each year. Then again there’s unfulfilled provide for milk within the export market with the main processing and distribution firms unable to satisfy their provide markets. The most important milk processor, Sameer Agricultural and Livestock Restricted (SALL), for instance claims to have current markets in 17 nations, however is constrained by low provide in servicing these nations.

The “superior pondering” farmer has the chance to enter into partnership with the milk processors to supply for them. He’ll nevertheless want to verify he has methods in place to adjust to the rigorous high quality management necessities of those processors.

2. Meals and wealth safety

A major variety of households in Uganda personal a cow (albeit many personal indigenous breeds) for the straightforward purpose that each milk and the cows are extremely tradeable and so within the occasion of economic misery, they supply meals safety (milk for the household) and might be simply offered, notably the extremely desired unique breeds.

Oh and let’s not overlook (on the threat of ire from feminists) that these cows are a vital supply of dowry (or “bride worth”) in Uganda.

3. Return on funding

From a monetary forecasting mannequin, I’ve developed; I estimate the Return on Funding (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): 4.18 years

Now the fundamentals it’s essential to get proper earlier than investing on this sector.

1. Feeding. Along with meals dietary supplements, plant elephant grass prematurely. This may make sure the cows are fed adequately. Feeding and milk manufacturing are immediately correlated;
2. Buy of cows. I counsel you purchase pregnant heifers. My analysis reveals you will get them cheaper than the non pregnant ones. You therefore double your inventory rapidly. In buying, make sure you select breeds (presumably cross breeds) which might be suited to the native space (local weather and illness resistance);
3. Technical assist. Go to an indication farm that practices good farm administration to enhance your information;
4. Information. Maintain farm data to make sure you can assess your each day milk yields in addition to assess the standard of your milk. This can be notably needed as you increase and say wish to provide the bigger scale milk processors; and
5. Water. Guarantee you’ve got adequate water close by. Cows drink loads of water and therefore you both want a tank or as you advance, assemble a bore gap to supply the water.

Closing phrase

I nonetheless worry being kicked by a cow being milked so, I nonetheless say, “no thanks sir, I’ll keep on with hiring a herdsman from a pal’s village in Nyakahita, Mbarara.”

The lighter humor apart, dairy manufacturing has the potential to be a worthwhile enterprise alternative for farmers in Uganda. There may be at all times room to develop, each for startup farmers in addition to the extra established gamers.

Source by D E Wasake