Establishing Sustainable Markets for Ugandan Products

Using Value Chains as tool for Development

Introduction

• Attitude to work and business• Production• Market Access Requirements• Global Trends • Challenges• Supply Chains• Possible solutions

Attitude to Work

Production

WHAT ARE THE MARKET REQUIREMENTS?

• Quality – appearance, packaging, shelf life, cooling,

food safety, microbiology analysis, hygiene• Competitive pricing• Quantity• Reliability• Just- in- time Deliveries

Market Requirements• Compliance to regulations ( most critical)

- Organic Certification- Eurep gap- Traceability- HACCP- BRC : British Retail Consortium

- MRL: Minimum Residue levels- SPS : Sanitary and Phytosanitary measures

Challenges with Standards

• Determined by the Consumers • Supermarkets• We have multiplicity of requirements across

different markets.• Standards are set and the process of challenging

their legality poses enormous difficulties. • Small producers are now being marginalized focusing

is shifting to large producers/ exporters.

The Market

WHAT ARE THE CONSTRAINTS

• High cost of Organic Certification• PIP/EUREPGAP Certification• Poor post-harvest techniques of farmers• Limited production capacity of Solar driers, electricity e.t.c• High airfreight costs - Entebbe to Europe 1.6 – 1.8 USD/kg. - West Africa to Europe 0.7 – 0.8 USD/kg.• Transport by sea - Uganda to Europe 23 days, 0.8 USD/kg. - West Africa to Europe 11 days, 0.30 USD/kg.Shelf life pineapples 21 days,7 to 12deg C, 90% RH

Supermarket Buying Power

• Large supermarket are pushing for a marketing system where they can source in bulk, assured of security of supply and capability to meet the detailed product specs.

The Down Side of the Recent Trends

• Likely effect of the trend is that – A fall in export production & – increased production cost– Higher risk of crop wastage and crop failure– Exclusion of small growers from the supply chain– Increase need in technical, marketing and general

management to meet the international demand.– Cost of certification and compliance

Participation in the Global Market

The potential development benefit from integration into global value chains is

affected by global trade rules and agreements and by the way in which the integration into

value chains takes place

Should we consecrate on the developing the regional Market than fighting for the cold dollar ?

!!!Think about the market opportunities !!!!After China what next

Struggling for trade fairness

• Export oriented agriculture is determined by the structure and conditions of trade

• We are affected by the protectionist agricultural policies from the rich importing countries

• Our products are subject to unfair competition e.g. in 2000 OECD countries, producers received subsidy worth US $ 330 billion which equal t Africa’s entire annual GDP.

Our products

• Low Value Exports– Coffee, Tea, Cotton, Maize, Beans e.t.c

increasingly being affected by trade policies in the international market ; increasing competition from the far east

• High Value Exports – Fruits, vegetables , fish , exotic products- less

affected by unfair trade policies.; due to land fragmentation we have low production

Obstacles for Ugandan Exporters

• Internal Obstacles– Inadequate technologies– Poor infrastructure and communication– Red tape– Corruption – Poor ethical practices – Other supply side constraints are due to poor

performance of our government in aspects of international trade.

Contd…• Lack of organised production.• Lack of right varieties for planting• Setting up farmer groups, quality dried fruits.• Continuous training of farmers; post harvest handling,

hygiene, traceability.• Some packaging material unavailable locally• Complying to International standards e.g. Eurep gap, Traceability, HACCP etc. Incase of disease outbreaks (ginger apple,banana), solutions

on control.• Poor Infrastructure i.e. the roads, cooling facilities

Competitiveness

• Competitiveness is a multi- facetted phemenon; not only the entrepreneurial capacity at the micro level determines the commercial success.

• Value added chains are important in achieving competitiveness in the market.

Supply Chain

Consumer

Agri IndustryProcessing

Retailer

Food Industry

Farmers

Input Supplier

Industrialized Country

Developing Country

Value added Chains• You will gain or maintain access to international food

markets, producers need to exactly comply with market demands.

• Balance competition for quality , price , and the delivery of the right volumes at the right time.

• Access to sophisticated management technologies• Quality and marketing logistics.

Normally cooperation with lead firms is often the only way to winning market access in the internal

market.

In conclusion

• We need to :– Shape our entrepreneurship first – Put pressure to Government – Follow the trends , target the niche markets based

on our model of production– Develop the regional market – COMESA, EAC and

Africa. Which is less demanding.