Hub agrodealers take the COVID-19 crisis head on

19 May 2020

Category: SME development (capacity building, agricultural inputs demand creation, agribusiness partnership contracts (APC)/ agricultural input and output value chain development

  The speed at which COVID-19 spread worldwide kept many countries on the edge. Uganda was not an exception. Measures in the country were taken before it registered its first case of COVID-19. This included the decision to temporarily disperse area populations that were usually highly concentrated, such as at schools, and religious, political and social gatherings. Travel restrictions were also put in place to and from certain high-risk countries.

When Uganda confirmed its first case on March 22, the president declared a quarantine across the whole country. Schools, shopping malls and borders were closed. Restrictions were also instituted with respect to the movement of people, which included the use of public and private vehicles as well as motorcycles. The lockdown was to last for 14 days.  The president also put in place a curfew for 7 p.m. and the only methods of transport that were allowed to move before and after that time were cargo planes, lorries, pickups and trains. Car stickers were provided to medical service providers, telecom companies, pharmaceutical companies, utility providers, food-production companies, fuel stations, firefighters and any other company or organisation categorised as essential.

The president then later extended the lockdown to 21 days from April 15 2020 to May 5 2020, mainly because the number of COVID-19 patients in the country were accumulating. At the time of writing, Uganda had 260 confirmed cases and zero deaths.

The severe effects of the global pandemic and the temporary measures that have come with it, have already started to take their toll on the economy and Ugandan citizens. There are reductions in economic activities in: trade, services, hotels, tourism, retail, exports and manufacturing sectors, which means that the country’s tax-collection targets will not be met. This will affect both national income targets and service delivery. In addition, the coronavirus scare has led to a drastic increase in basic food prices due to increasing demand and panic buying.

Agrodealers in Uganda are facing the challenge of accessing some products, for example fertilizers and also  herbicides like the weed master. This was especially the case when the stock began to run out because of the limited supply brought about by low imports. The prices of some products that are not in high demand have gone down. For example, a kilogram of maize is 950 shillings (approximately 0.2 dollars) from 1,150 shillings (approximately 0.4 dollars). Musinguzi James, an AFAP-supported hub agrodealer at M & J Multipurpose Ltd in Masindi, attested to the prices of his maize product decreasing ever since the lockdown to 1,000 shillings (approximately 0.27 dollars) a kilogram from 1,150 shillings (0.3 dollars)

Importing fertilizers from neighboring countries like Kenya has equally become a challenge. Kato Hassan, an AFAP-supported hub agrodealer at Kham Farmers’ Services Ltd in Masaka used to access his imports in a period of three to four days but now it takes him one-and-a-half weeks to get his products. This is mainly due to the increase in turnaround time at the border brought about by the increased random testing done to avoid the spread of corona. This has, equally, also caused traffic and long queues as people are forced to wait at the border. The curfew instituted on motorcycles for 2 p.m. and cars for 7 p.m. has also not made things any easier for them.

Despite these challenges and restrictions, the hub agrodealers are not just sitting back, lamenting and praying for everything to go back to normal. They are taking the fight head on, coming up with creative ways to distribute their products. Kato Hassan, for example, used to store 140 metric tons of fertilizers before COVID-19 but now he stores 420 metric tons of fertilizer to keep to be able to supply his customers.

Since cargo trucks are allowed to move on the road, hub agrodealers have used this to their advantage. Musinguzi James has distributed large amounts of fertilizer; to be specific he has distributed over 30MT of fertilizer using his truck amidst the crisis.

“African fertilizer and Agribusiness Partnership blessed me with a truck, this has been a huge advantage because they are not stopped on the way,” he said.

To curb the problem of hiked prices, hub agrodealers are collaborating with fellow input dealers in container village to get inputs at a subsidized price. They put money together and buy inputs in bulk. For example, a bag of urea is 100,000 shillings (27 dollars). When it is bought in bulk, it is 94,000 shillings (25 dollars).  Further innovations and partnerships have also been made. Akorion ICT for agriculture, digitalized agricultural value chains to enable all commercial farmers and other agribusinesses to access high-quality production and marketing services through an app called EzyAgric. With one click, input dealers can access agricultural inputs faster and at a subsidized price of 15%. Herbicides, such as the weed master, which initially sold at 18,000 shillings (5 dollars) are now being sold at 13,000 shillings (approximately 4 dollars). The price of fertilizers has been reduced by 5% to farmers up country as they have arranged consignments from the source/supplier. So far, the company has supplied over 10,000 farmers across all regions of the country during the pandemic.

Markburridge Guest Farms (U) Ltd and Idhatujje Farm Agencies Ltd in Nwoya and Iganga districts respectively are some of the AFAP-supported agrodealers who have benefited from Akorion services. AFAP is currently building a relationship with Akorion to offer these services to the rest of the 14 hub agrodealers, especially during this crisis where social distancing and limited movement are core measures put in place by the Ministry of Health. Additionally, motorcycles are being used to distribute the products and deliver in fewer than 48 hours locally.

According to Victor Otieno, a sales agronomist at Yara East Africa, they are ensuring that a lot of fertilizers especially the top-dressing fertilizers are being moved quickly to Uganda from Kenya as the COVID-19 situation in Kenya is uncertain. Yara East Africa is banking on some of AFAP hub agrodealers to bulk more fertilizers especially for top dressing. Kham Farmers’ Services Ltd has already secured 46MT of fertilizer in preparation for the proposed cross-border movement restrictions for truck drivers. The Ugandan government is in discussion not to allow truck drivers to move until their COVID-19 test results are released, and the turnaround time is estimated to be between 12 and 24 hours.

When asked about lessons learned from this crisis, the majority of the input dealers are reported to have said that they have learned to be more dynamic and strategic in business.

“In order to progress in life you have to be as flexible as the wind,” noted Kato Hassan, from Kamm Farmers’ Services, Masaka.

If this happened all over again, input dealers have said that they would respond much faster because farmers need them and people have to eat, especially in a crisis like this.