Rural Injini – Inclusive Maize Trading and Processing, Uganda

Project Description

The CFC has been supporting Ugandan smallholder farmers to aggregate and process maize in order to sell to regional wholesalers. This project targets a group of very poor farmers with low production volumes. It provides reliable collection points which encourages surplus production and improved quality.

Based on an efficient IT system, Joseph Initiative Ltd. (JI) takes an integrated approach to trade with the combination of rural collection centres staffed with local village buying agents to collect maize also in small quantities from remote farmers and making payments to them on the spot. This enables JI to concentrate its business model on ‘bottom of the pyramid’ farmers which only produce 1000 kg of surplus maize - or even less - per year. These farmers are not sufficiently attractive to be serviced by commercial traders due to relatively high transaction costs and mixed quality delivery.

The inclusion of these smallholders provides a predictable market that incentivizes also very small farmers to improve quality and intensify production. Increasing productivity and potentially reducing the current 40% post-harvest losses could lead to substantial improvement in Uganda’s food security.

Current status

JI expanded its processing facilities and used its ability to enhance the procurement of maize from small producers. It also attracted partners to provide additional resources to expand its procurement and distribution. The company today has 80 collection centres and a network of 15,000 farmers who regularly deliver maize.

In September 2017, JI formally became part of the East African agribusiness company Agilis Partners who also manages Asili Farms (also a borrower of a CFC loan). This is to achieve maximum synergies between JI as a maize trader and processor and suppliers from the larger scale arable maize farm Asili.

During the first half of 2020, JI management reports that nearly 3,000 MT of maize were procured from 8,800 local smallholders. Farmers are incentivized to increase production and pay more attention to quality and the application of good agricultural practices, thereby addressing SDG 1 and 2 in a significant way.

Impact of Covid-19

While procurement activities continue, JI management reports that export sales of Maize are hampered due to cross border traffic restrictions across East Africa. The CFC remains in contact for resumption of export sale at the earliest.