Following Uganda’s recent economic recession, business emphasis has been shifted from the oil sector to other sectors
with the aim of diversifying the economy.
Evidence of this shift of emphasis is the Government’s increased efforts to make the agricultural sector more productive and competitive through various loans, grants and programmes.
Starting a business in Uganda’s agricultural sector has been something we’ve always been passionate about and this passion has led us to try out a number of entrepreneurial ventures in farming. In this article, we are going to be sharing a few tips that we’ve learnt along the way and highlighting four practical steps to help you start a commercial farming business in Uganda:
How To Start A Commercial Farming Business In Uganda
Step 1: Identify A Farming Problem:
The very first step to take when starting a commercial farming business is to identify a problem that people have and focus on solving that problem.
The identification of these problems was the trigger that led us to write this article. We wanted to produce enough to meet
internal demand for food. If you can also identify a farming-related problem around you and devise a plan to solve that problem, then you’d have taken the first necessary step to starting up your farming business.
Step 2: Once you have highlighted a farming-related problem that you want to solve, the next step is to close up the gap between what you know about that problem and what you need to know to be a successful farming entrepreneur. There are two avenues you can use to hack this:
Seek agricultural education:
You could get knowledge from available material (doing online courses or reading books) on the problem you are looking to solve.
You could leverage the knowledge other people have acquired, by consulting experts in the field you would like to venture into; Uganda has a whole lot of smart people to learn from, the problem is we hardly look out for them.
So, if you are looking to start a farming business in Uganda, it is important to firstly, affiliate yourself with the right expertise/knowledge and secondly, be inquisitive and prepared to learn. As much as you will want to hire a specialist , nothing can replace you having a working understanding of the field you are going into.
To help you start reducing the knowledge gap in farming, here are the basic things you will need to know before starting a commercial farming business regardless of what type of farming you are looking to go into:
1) Right input:
The right input refers to healthy animals, quality seeds, fertilizer from a reputable company, pesticides and insecticides. We would advise that seeds for planting are
gotten either from seed research institutes or from approved institutions look out for seeds from IAR (Institute for agricultural research).
It’s important to know the source of your inputs because the wrong seed variety or fertilizer mix can lead to poor yield.
2) Proper management:
There is an old saying – “a castle crumbles with poor supervision”. Management is an integral part of any farming business and it involves – proper supervision, knowing when/what your crops/animals need to aid its growth, knowing the soil requirement, water retention, rainfall requirement, signs of disease infestation and also how to solve pest attacks.
At the early stage of growth in your business, it is best you act as the extension/farm manager; and even if you have grown to a level where you can afford extension services, you must still ensure that all these checks are considered. Lack of proper management will kill your farm business before it sees the break of day.
3) Site Selection:
Where your site is to be located is an important part of your farming business. We often tell people that there is a difference between land and soil. While land is generic, soil refers to the right environment that favours specific crop production under a right condition.
Some pieces of land in Uganda were planned for real estate and have lost their topsoil (which is primary for crop farming); it is important to ensure that you always do a soil test analysis before you choose what/where to farm. It is also important to locate your business in a place close to your produce market and consider cost of logistics and
Security from pest attack and theft of produce is an important aspect of any farming business, especially when you have a large farm. we also advise ALL farmers to insure their farms after all due diligence is done in order to protect themselves from unforeseen circumstances like fire, drought, floods etc.
Step 3 – Raise Capital:
After all is said and done, the primary factor that limits a lot of potential farming businesses is the money to start. However, in any business venture, it is important that you start with as little as possible and learn to grow patiently. With that being said, here are three ways you can raise capital to fund your commercial farming business:
– Through personal finances: Starting a farming business with your personal finances will typically require you to fund the farm with money that you have saved up for some time. This is the most advisable way to start a farming business because it helps you test out your farming idea, learn valuable lessons
and gather useful information before bringing external parties into the business in the form of loans or equity.
– Through partnership/equity funding: This is when a percentage of shares in the farming business are sold in exchange for capital to start your business.
– Through loans: Loans from a financial institution or even from close friends and family can be used to fund ideas. However, at this junction, We must strongly advise against starting your business on loans.
It is wiser to save up and use your money to invest in the farm business at the initial stage, test the waters, before considering a loan agreement for your business. There are too many uncertainties when starting a business to add the certainty of paying back a loan.
Step 4: Launch:
The last step is to officially launch your business. The version of your farm that you launch may not be where you want it to be, but it is imperative that you take a bold first step and start somewhere, learn from any mistake you might make and scale as you go about your business.
No one ever knows it all when they start, so the fact that you do not have all the information you would require should not
hinder you; you must keep learning and keep yourself abreast with current trends in the farming business because this information will help in expanding your business operations.
Now you have all the basic information you need to start a commercial farming business in Uganda, so we challenge you to go ahead and start your farming business.