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Ugandan Small Scale Farmers Reaping Big from Sesame

gingellyUganda is the world’s fifth largest producer of sesame, the Northern and Eastern regions of Uganda being the main centres of production of this crop with a vast number of small scale farmers. The market structure involves numerous traders, which reduces the farmer’s share of the final price. However, if farmers were to sell collectively at regional level there is potential for a 10% increase in prices compared to selling at the farm gate.

In the last season, TruTrade sourced 25.4MT of simsim from over 986 small scale farmers in Acholi sub region worth US$19,859; making the farmers to earned a total amount of US$16,707. Out of this, over US$939 was paid as a bonus to the farmers. The price difference that the small scale simsim farmers got by trading with TruTrade was 13% higher, which meant giving a total added farmer income of US$1,703 more than they would have otherwise attained while dealing with the middleman.

TruTrade will continue to source simsim in coming seasons. We know that we can find bulk buyers and also see good opportunites with the Base Of the Pyramid (BOP) outlets. We are testing a g-nut-simsim mixed paste from Lira at the moment to see if he can process for TruTrade.

 The graph below shows the different categories in the small scale farmer contribution to the production of sesame in Uganda.

SWOT (strengths, weaknesses, opportunities, threats) analysis of sesame value chain

STRENGTHS

WEAKNESSES

  • Sesame is a low volume, high value crop
  • High demand both locally and internationally
  • Good profit margins
  • Suitable climate in the EES
  • Availability of suitable and marketable varieties
  • Competition at assembly levels thus competitive pricing
  • Fragmented supply wide area and small quantities per producer
  • Lack of contracts arrangements between producers and buyers
  • Opportunistic market behaviours e.g. adulteration with soil and sand
  • Poor transport infrastructure from the producers to the assembly points
  • Poor handling at farm level raising quality and phytosanitary concerns
  • High handling costs such as loading and unloading
  • High concentration of market power to a few exporters

OPPORTUNITIES

THREATS

  • Relative ease of expansion of cultivatable area in response to better prices
  • Raising global demand
  • Availability of premium markets such as Europe, India and China; and niche organic markets
  • Ready domestic and export markets for sesame
  • Insecurity, instability and internal displacement of producers and traders
  • Limited aggregate volumes of sesame available for exports thus low economies of scale and inability to attract many global players
  • High road transport costs to Mombasa as compared to shipping costs from Uganda and other markets
  • Existence of two markets in the east and Europe, one has high quality demands while the other (China) is very lax
  • Scarcity of improved planting materials (seed)
  • Pests and disease affecting production

We plan to have community bazaars in each area to promote TruTrade’s simsim marketing and to explain to agents the past season’s trading. Where possible this will take place alongside promoting service for mobile money and sharing what other crops TruTrade can find markets for in the upcoming season. Using mobile money makes transfer of money to the farmers much easier and safer than transferring through the agents. This was way we are sure the money reaches farmers safely.

The challenges to sesame production at the farm level include: lack of equipment for land preparation, which leads to late planting; crop losses from pests and diseases, which reduces yields; non-availability of seed; high labor demands, particularly for weeding the crop and poor post-harvest handling.

The problem of cleanliness arises during the shelling and drying stages of sesame harvesting. Most farmers thresh and dry sesame on the bare ground, this leads to unclean sesame grains since sesame becomes mixed with soil.

Sesame is produced predominantly by small scale farmers. Smallholders produce small amounts, their bargaining power is weak and the prices that they receive are low. The farming methods employed in sesame production are simple and have not changed over many generations. Farmers use animal draught for land preparation, manual weeding, harvesting, drying and threshing. As such, sesame farming is characterized by low resource use with little mechanization or use of inorganic fertilizer and chemical   pesticides. Farmers have been producing sesame for subsistence consumption and but now increasingly for income through the marketing of surplus production. TruTrade plans to expand their market for next season’s surplus. Sesame-wide-landscape