How farmers are milling profits from maize

Maize milling represents a significant business opportunity in Uganda, largely due to the essential role maize flour plays as a staple food across many households. In light of the difficulties faced by several farmers during a tough year, when the price of maize plummeted to approximately Shs200 per kilogram, many have sought alternatives. In January, 32 farmers in Kiryandongo united under the Kigumba Produce Buyers and Dealers Association (KPBDA), aiming to add value to their maize instead of merely selling raw grains in Kampala. Their vision for acquiring a maize milling plant to process flour for local markets took a step forward thanks to support from the National Agricultural Research Organisation (Naro). Today, the association has expanded its membership to 63 members since obtaining a milling machine with a huller and mill.

Growth Through Collaboration

Strategically positioned in the town's center, this maize milling project not only removes maize bran from the grains but also sells it to various retailers in Apac, Gulu, and Masindi. KPBDA employs machine operators full-time to manage operations, while customer fees help cover operational costs. Maize is a vital crop within Kiryandongo District, and despite rising competition, the association ensures competitive prices for farmers. Christopher Waiswa, the association's secretary, noted that they compensate farmers with Shs700 per kilogram on the farm, while those who opt to bring their produce directly to the mill receive Shs750. In addition, they charge a milling fee of Shs180, which is lower than the Shs200 charge by some private millers.

Challenges in Milling

Operating within the milling sector poses challenges, according to Waiswa, particularly with power inconsistencies and high costs, both of which hinder production capacity. The mill can produce roughly two tonnes every 24 hours, yet their operations were limited to only five days in September. Spare parts for the milling machine have also proven difficult to source. Labour is another concern, as Waiswa mentioned that the task of maize milling—which includes soaking, de-hulling, sifting, and milling—is typically done by casual workers lacking specialized skills.

Investment Insights

The plant's technology and skills are consistent with other small-scale millers; however, capital limitations affect their ability to procure adequate supplies. The packaging materials necessary for their products, sourced from Kampala, are costly. For those interested in investing in a milling machine, Waiswa recommends carefully considering all associated costs. He has been analyzing the profitability of mills since relocating to Kigumba from Kamuli years ago. His cost breakdown includes factors such as the price of maize per 100 kilograms, electricity rates, water costs, labour expenses, rental for premises, fortification additives, and packaging bags. Understanding the market prices for maize flour, bran, and logistics costs is critical.

Building a Sustainable Business

Developing relationships with maize growers is advantageous; establishing contracts can eliminate unreliable middlemen. Uganda's key maize-producing areas consist of districts such as Mubende, Kiryandongo, and Masindi. Efficient maize milling operations require ample storage space and access to three-phase electricity, as the machinery demands high voltage. Upgrading facilities may necessitate collaboration with the local electricity supplier, Umeme, which may charge inspection fees of Shs88,000. Electricity rates peak at about Shs868 per unit.

Proper construction of premises must adhere to standards ensuring quality and safety. Consulting a food technologist can help define necessary guidelines as outlined by the Uganda National Bureau of Standards (UNBS). These regulations establish vital requirements to ensure products are safe for human consumption. Additionally, businesses must be registered with the Uganda Registration Service Bureau (URSB) and the Uganda Revenue Authority (URA), alongside obtaining certifications from the UNBS after analyzing product samples in accredited laboratories like the Uganda Industrial Research Institute (UIRI).

Understanding market demands and payment collection methods is paramount, with significant buyers such as schools and retailers often operating on credit. Equipment for various milling capacities can be sourced from companies like John Deere, China North Machines, Amek machines, as well as online platforms like Alibaba.

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