Nov 24, 2017 Last Updated 2:37 PM, Apr 10, 2017

President Yoweri Museveni launched the Youth Innovation Centre and Export Market with a call on the youth to embrace modern agro production for income generation and job creation, saying there is wealth in agriculture that must be harnessed.
“When we talk about jobs, I don’t stress government jobs, they are very limited. When I registered for my identity card, when it came to profession, they put politician, I said that is undermining me. My job is a farmer. I suspended farming to go to the bush and I came back. There is a lot of wealth in agriculture,” he said.

African indigenous vegetables such as African egg plant, (Enttula), Nakati,Red amarathus(Ebuuga), Sukuma wiki, pigeon peas, Amarathus, Ensugga, cabbages and spider plant (ejjobyo), have been time memorial grown wildly for home consumption and very few farmers have taken interest in growing the African indigenous vegetables, some who have done it are doing it on a small scale accompanying them with other cash crops.

There is an old grain market adage that says the market is never more bullish than at the top and never more bearish than at the bottom. All this demonstrates that human emotion still plays far too big a part when it comes to grain marketing, which is why Frontier Agriculture is keen to extol the importance of a structured marketing and buying policy in trading agricultural outputs and inputs.

Frontier’s trading director, John Duffy, uses the chart below depicting farmer emotions to market prices to explain. “The chart is one I use when I talk to farmer meetings. I start by putting just the graph line up and generally have people on the edge of their chairs as they expectantly wait for me to tell them where the market is going. When the headings ‘fear’, ‘greed’ etc are added there’s a general sigh of disappointment, followed by some wry grins of acceptance as people recognise their own fallibilities.”
So, as a grower, how do you improve your grain marketing? “It’s important to fi rst consider some predictions that will drive the market, says Mr Duffy.

“It’s generally accepted that:

  • The world population is set to increase by 50% by 2050; Food demand is set to double by the same time as global consumers become richer;
  • Demand from non food crops is set to multiply 10fold by 2020 as renewable fuel demand increase;
  • The price of crude oil is set to top $200 at some stage;
  • The UK is set to go from being a net wheat exporter to a potential importer by 2015;

The price of ammonium based nitrogen could hit €500 a tonne within three years. “But it’s important to remember that all the above are just predictions, some based on years of data, some based on trend data, and some on what everyone believes, or so it seems. Irrespective of the fertilizer cost, most people would view the world as being in an upward cycle for agricultural products, so grain marketing should be easy. Hence the reluctance to sell as people believe prices will continue to rise.”

  • Mr Duffy is keen to point out, however, that predictions must be balanced with facts. Hence Frontier’s assertions that:
    In 2007 there were 20m fewer hectares planted to agriculture in the USA than there were in 1981 (enough to grow another 60 to 70m tonnes);
  • In 2007 there were 25m fewer hectares planted to agriculture in the former Soviet Union than there were in 1977 at the height of the cold war (enough to grow another 50 to 60m tonnes);

Since 1990 there has been no increase in average wheat yields in the former Soviet Union, Australia, North America, South America or India; During the same period, average wheat yields rose 50% in China. “Put those facts into the equation and you realise the world has a huge potential to increase production, both in terms of area and yields. High prices will drive change in both of these areas,” Mr Duffy points out. “If you then consider that the world has the tightest global stock situation in living memory, the whole picture becomes much more opaque. In such circumstances even small changes in world supply and demand can have huge effects on price.” Because of high prices the world is predicted to produce over 660m tonnes of wheat this coming year – a fi gure never before achieved and probably some 30m tonnes more than might be consumed.

MARKET VOLATILITY

“We’re in a period of increasing commodity prices, by which I mean the trend line is upwards. What I do not know is how steep that trend line will be and how long it will run for. What I do know is that the actual price line will deviate hugely away from the trend line. Last year’s prices were well above trend and at some stage in the future (and that could be this coming year) we will go well below trend. “Getting close to an expert has never been more important. The focus on good agronomy and good marketing should be higher now than it ever has been. Work with a company that can understand your business and tie in agronomic advises.

“In the days when inputs and grain prices might have moved by 5% the timing of buying or selling had a minimal effect on bottom line performance. The truth of the matter now is that high fertilizer prices do not guarantee high grain prices when you eventually sell and there can be a two-year gap between both business decisions. “At Frontier we pride ourselves in providing detailed professional advice and we’re constantly seeking ways to improve performance for our farmer customers. Initiatives such as our OSR Pure Yield Club that combines yield improvement with targeted marketing have had remarkable success for club members, delivering yields of 10% above the national average for its growers over the past three years.”

The grain market is not for the faint-hearted, but by combining input regimes with marketing strategies the rewards are there for the taking.

At the heart of all Rugasira’s efforts is his strong belief in the transformative power of self-help. In trade, and not aid, he says, is where Africa’s future well-being lies. Tired of seeing developed nations take the lion’s share of profits from his countrymen’s coffee crop, Ugandan businessman Andrew Rugasira decided back in 2003 that it was time for a new business arrangement.

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