KAMPALA – Uganda Breweries Limited (UBL) on Thursday announced that it will expand its Farm for Success, previously Local Raw Material, program from the current 35,000 farmers to 50,000 farmers as the company seeks to sustainably source 100% of agriculture materials used in producing its various brands from Uganda, specifically from farmers of Barley, Sorghum, and corn by 2030.
This revelation was made during the annual farmers’ symposium that Uganda breweries created as a platform to create mutual understanding, collaboration, policy alignment, problem-solving, and ultimately, fostering economic growth and development among the various stakeholders in the agriculture value chain
The Local Raw Material program started in 1987 with Barley farming but the program kicked off in earnest in 2003 when the Government of Uganda introduced excise concessions for beer produced from locally resourced raw materials to facilitate the choice and use of local raw materials in the alcohol production process. UBL was then able to make several investments to accommodate increased local raw materials, for example, a $21.3 million Mash Filter investment in 2011. That same year, payments to farmers peaked at over 14 billion, jumped to 26 billion in 2017, and currently stands at over UGX 52 billion as of 2022. Increasing the number of farmers to over 50,000 will see Uganda Breweries increase farmer payouts to over 80 billion in the next 5 years.
Speaking at the 2nd Annual Farmers Symposium that ran under the theme Innovations in Agro technology, seed and other Agro input, Mr. Andrew Kilonzo, the Managing Director of UBL stressed that as part of the company’s efforts to increase diversity and inclusion in their processes, they will be looking to onboard more women and people with disabilities as part of this program, adding that the goal will be to source over 60% of the agricultural produce from women farmers as well as people with disabilities
“We do this, not just to meet a quarter, but part of sourcing sustainably means that people who have not been a part of this value chain are brought to the table, and are supported in the best farming practices not only so that they can supply us the grain that we need, but that they can earn a livelihood, be self-sufficient and hopefully, pay it forward to the other previously marginalized communities. For that reason, we shall have targeted capacity training sessions with women groups across the country as part of onboarding for this process.”
Under Uganda Breweries’ Society 2030 program, the goal is to provide 100% of local sourcing communities with agricultural skills and resources, building economic and environmental resilience and supporting 150,000 smallholder farmers.
He noted that the platform is essential for mutual understanding, collaboration, policy alignment, problem-solving, and ultimately, fostering economic growth and development.
“As Uganda Breweries, we made a conscious and strategic decision that we needed to work with farming communities to increase our efforts to procure the raw materials we use in our programs back in 1987. It has been nearly three decades of this program where among other things, we facilitate farmers with good quality seedling, modern farming equipment, train them on good farming practices from planting, harvesting to post harvesting practices and then later, procure this seedling from them.”
“I can say that this program properly set root in 2010 and since then we have grown not only the quantities that we source from local farming communities but also the value in terms of money.”
According to him, today they spend over 52 billion annually in these communities. He noted that in 2010, they were working with about 14,000 farmers, compared to today where they are working with over 40000 farmers and annually onboard more.
“We are also diversifying our portfolio and looking to seriously find ways to innovate with cassava as well as down the road, sourcing apples for our Apple Cider. Our farm for success program is one that we are proud of as the Brewery in the way that it has been able to transform lives in the communities where parents have been able to increase their livelihoods, take their children to school, and venture into other high-income projects.”
Mr. Kilonzo commended the government for its planned investments into small and large-scale irrigation projects in water-stressed areas as this will reduce farmers’ over-reliance on rainfed agriculture Government through the National Development Program (NDP) III’s Agro-Industrialization seeks to address key challenges in agricultural production, agro-processing, and value addition.
He, however, decried challenges facing farmers including poor agricultural practices, low technological adoption, insecurity over land ownership, poor access to extension services, low-quality inputs, and unpredictable weather patterns and also lack of credit to farmers because of the high-risk commercial banks append to the usually unpredictable agriculture output.
He noted that UBL stepped in to address some of these challenges, for instance, “We have partnered with the National Agricultural Research Organisation (NARO) to come up with drought-resistant seed species to address the quality issue, we provide ready market to farmers and through trainings we have encouraged technological uptake in order for farmers to be able to predict weather patterns etc.”
“We are proud of the fact that today, we purchase 95% of agriculture products we use in production from Ugandan farmers but we are relentless in seeing this number settle at 100% so that when we boldly say we are Uganda Breweries, it is because we are sourced, produced and packaged 100% in Uganda.”
Officiating at the event, the State Minister for Agriculture, Animal Industry and Fisheries Fred Bwino Kyakulaga said that programs like UBL’s Farm for Success are in line with several government objectives as outlined in the National Development Plan (NDP) III in the areas of agro industrialization, import substitution/promotion of local manufacturing as well as the mandate of government to improve policy and infrastructure that strengthens the private sector to create jobs for inclusive growth, employment, and sustainable wealth creation.
He said that Agriculture remains the backbone of Uganda’s economy – employing over 70% of Uganda’s working population.
Data from the Uganda Bureau of Statistics indicates that in 2021/22, agriculture accounted for only about 24.1% of GDP even though millions of Ugandans are employed by the sector.
The minister attributed the low agriculture sector’s contribution to low-value addition by farmers and limited linkage between agriculture and the industry sector but also poor agriculture input and the climate change effects.
“My ministry looks forward to supporting Uganda Breweries Limited as well as other willing companies in such ventures, and I know Ugandan farmers have the capacity to more than fulfill the 100% local sourcing intention that you have mentioned here today.”
The minister underscored that the National Development Plan under the Agro-Industrialization program targets to increase the value of process agriculture commodities from $935m to$2.7b.
“This one company alone will contribute over $24 million to this. We are working with the assumption that increasing farmers to 50k means the brewery is injecting 90 billion a year so that is what has been converted to arrive at that figure and create hundreds of thousands of jobs adding to the 180,000 that the NDPIII targets to create annually in the Agro-Industry sector. The other government focus in the medium to long-term framework is to reduce the percentage of the population dependent on subsistence agriculture as the main source of livelihood from 68.9% to 55% and with initiatives like this, we shall get there.”
Uganda Breweries currently works with over 35,000 farmers from all over the country to purchase over 8,000 Tonnes of Barley, 15,000 Tonnes of Sorghum, 18,000 Tonnes of Maize, and 1,000 Tonnes of Cassava; 30% of that from Northern Uganda, 25% from Eastern Uganda, 35% from Western Uganda and 10% from Central Region.