HOW TO – Start an Agricultural Produce Business


Uganda is richly endowed with arable land that has promoted agriculture over the centuries. There are numerous crops that naturally grow without the need for complex agricultural practices. As a result, so much trade is going on internally as well as export led that focuses on produce.

The growing urbanisation has led to increased demand of various foods that were initially never regarded as commercial crops. Maize, Rice, Beans are examples of produce that has traditionally been commercial. However, over the past decade, we have seen millet, cassava, sorghum, simsim, soya beans among others take up representation on the commercial landscape of agricultural foods.

The beauty of trading in produce is that it doesn’t have high entry barriers as you will note in this article. It is one of those businesses that you can start in a very basic way by simply buying and selling the produce at a markup or buying, processing and selling at an even bigger markup.

How can one get into this business?

Identify the produce for trade: Due to the diversity of foods consumed, the opportunity for trade is also very broad. You need to identify which particular produce you can best deal in. This identification process can be guided by factors like;

  • Your village roots – Most of us have villages of origin aside from our urban dwelling places. These villages are largely agricultural oriented and you cant fail to find a common crop planted over there. Where I come from, rice is the most prominent commercial produce and hence it is easier for me to trade in rice as opposed to say simsim .

  • Access to Supplies – Trading usually requires that you have some sort of steady supply of produce. You need to know which areas of the country can supply you what you need. The Bunyoro sub-region for example is reknowned for Maize and Cassava production. The Lango sub-region is known for sunflower and sim sim growing. The Mbarara axis towards Bushenyi is regarded as a Banana zone.

  • Ease of Handling – How easy is it to handle the produce till it gets to the consumer? Perishable produce always puts you on tension to ensure that it is sold very fast while non perishable produce gives you room to approach the market at your convenience. As a starter, I advise that you avoid perishable produce unless you are very certain of the market you’re dealing with.

Familiarise yourself with the market dynamics: Business is never as obvious as it seems when calculating returns. Its practicalities demand that one is knowledgeable about the trade dynamics involved. Price fluctuation is one of most common issues to deal with. Just like the stock exchange, in a matter of hours, maize prices could drop by UGX 100/ per kilo and in case you had stocked after purchasing at a higher price, it becomes obvious that you stand to lose UGX 100,000/ per tonne sold.

Another challenge is posed by the multitudes of unscrupulous traders who will always give the impression that your produce is of poor quality hence pushing you to settle for a low price.

You also need to know the seasons of the year and how they affect both supply and demand. This can help you determine when to stock and store or quickly offload your stock.

Set up a Supply Chain: Establishing the purchase network is fundamental. There are options at your disposal like; buying directly from the farmers, buying from local traders in the village and buying from urban wholesale traders. Each of these options has its pros and cons. As an example, while it might be much cheaper to buy directly from the farmers, the effort placed in aggregating the small amounts of produce from individual farmers could easily erode the perceived savings in price.

Establish your market: Always avoid venturing into business without knowledge of whom you want your customer to be. Curve out a good picture of the target customer. Is it schools and various institutions that require bulk supplies? Could it be shop or supermarket retailers? Is it the home consumer?

Clarity on the target market will guide you on other factors like packaging, distribution and processing requirements. Try to ensure that you steer clear of credit supplies until a time when you believe the relationships with customers are good enough to facilitate such a judgement.

Storage: This is very crucial at various stages of the supply chain. When aggregating produce purchased upcountry, a storage point is needed. Upon arrival in the urban areas, another storage location is crucial to avoid turning you into a desperate seller as well as allow accumulation of stock for large scale supplies. Ensure that this storage space is free of pests since they can significantly erode your margins if left unattended to.

IMG-20151114-WA0018

A village Rice Store

Processing: Some traders choose to sell produce as is while others opt for processing. Kisenyi, a slummy business hub found in Kampala City is a good example of a location where produce is processed prior to sale. Maize is turned into its powder form (posho), same with millet, sorghum, Soya and others.

Processing has been made so easy that within the same milling premises, one can find packaging bags, bag sewing machines as well as print services to brand the bags.

Marketing: You need to build up some noise about your products/produce. This should help you get pre-orders thereby reducing on uncertainties. Besides, the more the marketing, the more the orders which gives you an opportunity to operate at higher economies of scale. Social media is such a low cost and good marketing tool lately especially when dealing with the end consumer. You might want to consider using it.

With these few tips, start working your way towards your dream business today.

James Wire is a Small Business and Technology Consultant

Blog: wirejames.com

Twitter: @wirejames

Email: lunghabo (at) gmail (dot) com

Other Articles of interest

HOW TO – Start a Home Business

HOW TO – Start a Supermarket

HOW TO – Start a Sacks Busiess

HOW TO – Start a Chapati Business

HOW TO – Start a Mobile Money Business

35 responses to “HOW TO – Start an Agricultural Produce Business

  1. The tow lions

    I have 1000000 . Which business can I start with this money? In northern Uganda

    Like

  2. It’s a wonderful message, am actually going to use it to start up something

    Like

  3. Thank you for simplifying everything ,some of us lost our jobs during the COVID-19 ,BUT with your article i think there is life after this.Thank you

    Like

    • I’m helping a number of people in your category. Feel free to get in touch.

      Like

      • Namugenyi Allen

        Mr James am from luweero district and I want to start produce on a small scale I want to open up a retail shop using 7m but I want to hire an employee and then I have the other 7m to go in produce but I need your advice and to guide me in which region and district of uganda I can get the cereals

        Like

      • Hello. Nice to hear about your plans. Sorry I have replied late but it has been due to the hectic political campaigns. Please get in touch with me on the email indicated at the bottom of the article you read and we have an indepth discussion there.

        Like

  4. Kagabane shatra

    Hey am kagabane shtrah, am happy to be here .I have my 3m and I have to start a business but I don’t which business to start with that money pliz I need ur help

    Like

    • 3M is decent money to start a business. Since you seem to have no idea what type of business to do, you need to undergo a mapping exercise that will allow you settle for the most ideal business under your circumstances. You can email me on lunghabo@gmail.com for further information.

      Like

    • 3M is decent money to start a business. Since you seem to have no idea what type of business to do, you need to undergo a mapping exercise that will allow you settle for the most ideal business under your circumstances. You can email me for further information.

      Like

  5. Thanks James
    What can 500k do for me to start up a profitable business
    I want to start growing cow peas) green)

    Like

  6. nice. so my 6million shillings can do something?

    Like

  7. Thanks Mr. With ugx 1,500,000 kindly break for me what to start up with first in produce.

    Like

  8. This is so amazing wonderful article. Am i want to try out produce business by starting small. I think i have borrowed a leaf.

    Like

  9. Akoramazima Goden

    thx James,,am having chapati business,am earning 5000 daily and I need to start up another business with my 500000ugsh ,,and am stack what can I do bse I have adream of making acompany thx

    Like

  10. Its really wounderful tips. Thanks a lot am a young man I thought about produce but I didn’t have knowledge

    Like

  11. Kwitegetse Penlope

    Thanks James for the article. how much capital do I need to start up the business in agriculture produce ie rice, beans and maize

    Like

  12. Higaye Mutwalib

    Many thanks mr.Jay,

    Am intrested in starting up a produce business at a small scale.

    Like

  13. Thank you Mr. James for the articles they are really inspiring and motivating am actually thinking about venturing in one of the opportunities listed above

    Like

  14. Nice piece of information. Thank you James. I will follow this to the dot.

    Like

  15. Hello James thanks for the literature, i work in one if these govt agencies closing and i have been thinking for over a year now on starting a produce business. Your literature gives simple and followable guidelines for one to start. Thank u

    Like

  16. Thank you for article it’s very helpfull. i have borrowed some ideas and added to my business plan.

    Like

  17. Alex Ambiikire

    Good evening Mr Wire, how is work and business taking you sir? All the best in your week

    Like

  18. Alex Ambiikire

    This article has really motivated and re charged my passion for Agribusiness, Thank you Mr Wire James

    On Tue, Jan 30, 2018 at 1:36 PM, The Wire Perspective wrote:

    > James Wire posted: “Uganda is richly endowed with arable land that has > promoted agriculture over the centuries. There are numerous crops that > naturally grow without the need for complex agricultural practices. As a > result, so much trade is going on internally as well as expo” >

    Like

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