Focus on milling brings rewards
Jacinta Namubiru is a TruTrade franchisee and a manager of AgriNet Uganda. She also manages an agro-processing business called AgriFeeds in Tororo. In 2015, Jacinta concentrated on processing maize and creating fine posho for the local BOP market.
AgriNet is a market access company with a focus on providing a reliable and efficient market bridge between small-scale farmers and high volume buyers who want quality products, while also ensuring a fair price for smallholder farmers.
We have a large network of Transaction Security Service (TSS) agents in Eastern and Northern Uganda. AgriNet sources maize from its networks in Eastern Uganda through 45 agents. These agents sourced 95 tons of maize in 2015 from over 150 farmers who were paid through TruTrade’s Cash-On the-Bag (COB) fund, receiving 10% more than from the local market.
In 2015, AgriNet realized that the BOP market demand for our high quality product was higher than expected, exceeding supply. However we ran out of product as we were not able to store enough maize to retain a buffer stock. This is because the trade finance is meant to be used and returned quickly, so AgriNet had to buy small quantities, process, pack and sell the product in a short amount of time to recycle the money back to TruTrade’s COB fund.
The BOP market demands a consistent year-round supply of quality products at a competitive price. It requires consistent small deliveries which also mean access to suitable transport. Most important is an efficient payment method to collect money after each delivery that is either paid directly to an agent in cash or by mobile money through TruTrade’s mobile payment platform. So in order for AgriNet to have a more consistent and stable supply of product, we now intend to partner with TruTrade to toll process the maize. In practice, this means that we will process the maize for a fixed fee, allowing us to concentrate on that aspect of the value chain, while TruTrade focuses on market access and ensuring farmers capture a share interest of the increased value for the farmers.
Since 2015, AgriNet has expanded and has constructed a new storage and processing facility in Tororo to increase its production capacity. TruTrade’s trade finance covers the sourcing of maize and pays AgriNet to process it. This will allow AgriNet to process more and use its finance towards upgrading equipment, acquiring new grain cleaners and investing in suitable transport.