By Farmlife Agro. May 27, 2o24
Overview
Maize is one of the major staple foods in Uganda. Its production has increased over the years as people change their consumption trends. It has evolved from a purely subsistence to a successful commercial crop. Maize in Uganda is sold mainly for food in schools, relief by World Food Programme (WFP) or export to neighbouring countries such as Kenya, Rwanda and Burundi.
Minimum (Recommended) Project Start-Up Investments
To invest in an acre of maize production, a commercial farmer spends an average of Shs 100,000 to 150,000 on hybrid seeds per acre, Shs 100,000 to Shs 120,000 for ploughing the acre, Shs 150,000 on fertilizers and Shs 150,000 on weed management. Bringing the farmer’s total investment to between Shs 500,000 and Shs 570,000
Projected Project Output
On average in Uganda, an acre of hybrid maize crop yields between 1,800 and 2,200 Kgs.
Profitability Analysis
Upon selling, assuming the farmer puts up 1,800Kg for sale at Shs 400 per Kg, she earns Shs 720,000/-. Assuming the farmer’s total cost of production is Shs 570,000; the farmer’s gross profit will be Shs 720,000 less Shs 570,000 which is Shs 150,000.
If the farmer were to add value to her produce through milling, assuming 70% mill yield, the farmer gets 1,260Kg of fine maize flour and 450Kg of maize bran. If the farmer sells each Kg of fine maize flour at Shs1,300 and each Kg of maize bran at 600, she earns Shs 1,638,000 and Shs 270,000. This brings her total earnings from the same produce to Shs 1,908,000.
Therefore, through value addition, the farmer earns a total amount of Shs 1,908,000. By adding value to her produce through milling, the farmer earns 1,908,000 compared to Shs 720,000 by selling raw maize grain. And the farmer earns a gross margin of 1,338,000 compared to a gross margin of Shs 150,000 by selling raw (dried) maize grain.
Conclusion
Therefore, to optimize earnings from her maize production agribusiness project, the farmer is advised to add the minimum value (by milling) to her maize grain to produce and sell two products instead of one, that is fine maize flour and maize bran, which command better prices in the market instead of the raw maize grain produce.
