Apple farming is the cultivation of apple trees for the production of apples, which are one of the most widely consumed fruits worldwide. Apples are not only delicious but also rich in essential nutrients and fiber, making them popular in various culinary uses and as a healthy snack.

The Apple farming industry in Uganda is a niche sector that is gradually emerging and gaining attention. While Uganda is predominantly known for its coffee and tea production, some farmers have started cultivating apple orchards in certain regions of the country. Apple Farming in Uganda is limited to areas with specific climatic conditions such as the highland regions of Kabale, Kisoro and parts of the western region which offer suitable temperatures and altitude for apple cultivation.

Farmers in Uganda primarily grow apple varieties such as the Golden Delicious, Red Delicious, and Granny Smith. These varieties are chosen mostly for their adaptability to the local climate and their market demand which, although is relatively small in the local market as they are mainly consumed by the middle and upper-income segments, hotels and restaurants, it is steadily growing and also shows a potential export market, particularly to the neighboring countries in East Africa.

The history of apple farming dates back thousands of years, originating in the region of modern-day Kazakhstan and spreading to various parts of the world over time. The wild ancestor of the cultivated apple known as Malus Sieversii is native to the mountainous regions of Kazakhstan, Kyrgyzstan, Tajikistan, and China. These wild apples were smaller in size and had a more tart taste. In ancient civilizations such as Egypt, Greece AND Rome, apples were highly valued and associated with beauty, love, abundance and often depicted in mythology and Folklore.

In the 17^th & 18^th centuries, European settlers brought apple seeds and cuttings to North America where apple orchards were established and their cultivation thrived in the regions with suitable climates. : In the 19th and 20th centuries, apple breeding programs were established to develop improved varieties with desired traits such as taste, texture, disease resistance, and shelf life. This led to the creation of popular apple cultivars like the Golden Delicious, Red Delicious, Granny Smith, and many others. Apple farming became a significant commercial industry in the 20^th century with large-scale orchards established in countries like the United States, India, Poland and Italy; these countries are among the top apple producers worldwide.

Today, apple farming is a thriving global industry, with a wide variety of apple cultivars grown in different regions and apples are one of the most widely consumed and economically important fruits worldwide, with diverse uses ranging from fresh consumption to juicing, baking, and cider production. The apple farming industry has benefited from advancements in cultivation techniques, pest and disease control, post-harvest storage, and transportation. Modern technologies like genetic research, precision agriculture, and improved storage facilities have further enhanced productivity and quality.

The demand for apples in Uganda’s local market is relatively small but growing, primarily driven by the middle and upper-income segments of the population. The demand for apples is higher in urban areas, especially among consumers who have been exposed to international food trends and preferences. The local market for apples is primarily fueled by the following factors:

1. Changing Consumer Preferences: With increasing urbanization and globalization, consumer preferences in Uganda have been evolving. There is a growing demand for a wider variety of fruits, including apples, as consumers seek to diversify their diets and incorporate healthier options.
2. Perception of Prestige and Status: Apples are often associated with prestige and are perceived as high-quality fruits. As a result, they are favored by consumers who can afford to pay a premium for such products, which further drives the demand among the middle and upper-income segments.
3. Tourism and Hospitality Sector: The tourism and hospitality industry in Uganda plays a role in the demand for apples. Hotels, resorts, restaurants, and catering services catering to both domestic and international tourists often include apples in their menus, creating a demand for a consistent supply of the fruit.

Regarding the potential for apple export from Uganda, there is some opportunity for regional export to neighboring countries in East Africa. Uganda can leverage its proximity and transport links to countries like Kenya, Tanzania, Rwanda, South Sudan, and the Democratic Republic of Congo. However, it’s important to consider several factors that can influence export potential:

1. Quality and Consistency: To successfully penetrate export markets, Ugandan apple growers must ensure consistent quality and adherence to international standards in terms of size, appearance, taste, and post-harvest handling practices. Meeting these requirements is crucial to compete with established apple-producing countries.
2. Competitive Pricing: Uganda would need to maintain competitive pricing to attract buyers in export markets, considering factors such as transportation costs, import regulations, and competition from other apple-producing regions.
3. Infrastructure and Logistics: Adequate post-harvest infrastructure, cold storage facilities, and efficient transport networks are vital to maintain the quality of apples during export. Investment in logistics and infrastructure would be necessary to support an export-oriented apple industry.
4. Market Access and Trade Agreements: Access to regional and international markets can be facilitated through trade agreements and partnerships. Uganda could explore trade agreements that enable preferential treatment and reduced tariffs for apple exports to target markets.

While the potential for apple export exists, it would require concerted efforts from farmers, government agencies, and stakeholders to develop the necessary infrastructure, enhance production capabilities, and establish market linkages to fully realize the export potential of Ugandan apples.

Does Apple farming really work in Uganda?

Yes, apple farming can be successful in Uganda under certain conditions. Uganda has a diverse climate, with varying agro-ecological zones, which makes it suitable for growing a wide range of crops, including apples.

Uganda, with its favorable climate and diverse agricultural regions, has been successful in cultivating various apple varieties that adapt well to local conditions. While the country’s apple production is relatively small compared to traditional apple-growing regions, such as Europe and North America, Ugandan farmers have achieved notable success in growing specific apple varieties. Here are some apple varieties that have thrived in Uganda:

1. Uganda Green (also known as Ugandan Green): This apple variety is indigenous to Uganda and has been cultivated for many years. It is well-suited to the country’s tropical climate, as it is tolerant of high temperatures and humidity. Uganda Green apples have a vibrant green skin and a crisp, juicy flesh. They are primarily used for fresh consumption and are known for their slightly sweet and tangy flavor.

• Anna: Anna apples are widely grown in Uganda due to their adaptability to warm climates. They are a medium-sized apple with a pale yellow-green skin and a sweet, slightly tart taste. This variety is valued for its early maturity and the ability to produce good yields even in areas with relatively low chilling hours.

• Dorsett Golden: Similar to Anna, Dorsett Golden is another apple variety that has found success in Uganda’s warmer regions. It is a high-quality dessert apple with a golden-yellow skin and a sweet, crisp flesh. Dorsett Golden apples are early to mature and have a relatively low chilling requirement, making them suitable for cultivation in areas with limited cold periods.

• Tropic Sweet (also known as Sundowner): Tropic Sweet is a popular apple variety in Uganda, particularly in the eastern and central regions. It is well-adapted to the country’s tropical climate and exhibits good resistance to diseases. Tropic Sweet apples have a red or pink blush over a greenish-yellow background, and they offer a sweet and juicy flavor.

• Pink Lady: Pink Lady, a well-known apple variety worldwide, has shown promise in Ugandan orchards. While it requires slightly more chilling hours compared to some other varieties, Pink Lady has been successfully grown in cooler regions of the country. These apples have a distinctive pink or red skin color, and their crisp, tart-sweet flavor makes them popular for both eating fresh and cooking.

Although these varieties have exhibited potential in thriving in Uganda’s ever-changing climatic conditions, there are still a few factors to consider when it comes to apple farming in Uganda. These include:

1. Climate: Apple trees generally require a cool or temperate climate to thrive. Most apple varieties prefer a cold winter season and a certain number of chilling hours to produce high-quality fruit. While Uganda’s climate is generally tropical, there are certain areas with higher elevations and cooler temperatures, such as parts of the Rwenzori Mountains, Mount Elgon, and the Kigezi Highlands, where apple farming can be more feasible.

2. Variety selection: It is essential to select apple varieties that are suited to the specific climate and conditions of Uganda. Some apple cultivars have been bred to tolerate warmer climates and require fewer chilling hours. By choosing suitable varieties, farmers can increase their chances of success.

3. Soil and site selection: Apple trees prefer well-drained soil with a pH level between 6.0 and 7.0. Conducting a soil test is crucial to determine the soil’s fertility and nutrient composition. Additionally, selecting the right site with good air circulation, protection from strong winds, and adequate sunlight is essential for apple farming.

4. Irrigation: In regions where rainfall is insufficient, providing irrigation is crucial for apple trees. Proper water management, especially during the flowering and fruit development stages, is essential for good yields and fruit quality.

5. Pest and disease management: Apples are susceptible to various pests and diseases. It is important to implement proper pest and disease management strategies to protect the apple trees from common issues like apple scab, codling moth, aphids, and powdery mildew. Regular monitoring, use of appropriate pesticides, and practicing good orchard hygiene are important for successful apple farming.

6. Market demand and value chain: Before starting apple farming, it is important to assess the market demand for apples in the specific region of Uganda. Apples may not have the same level of demand as other fruits like bananas or mangoes, which are more commonly grown in Uganda. Understanding the market dynamics and ensuring a reliable market for the produce is essential. Apples can be sold through various channels, including wholesale markets, supermarkets, farmers’ markets, or directly to consumers. Developing marketing strategies, understanding consumer preferences, and establishing relationships with buyers are important for successful apple sales. Value-added products like apple juice, cider, or apple-based snacks can also be produced to diversify the product range.

7. Harvesting and Storage: Apples are usually harvested when they reach their mature stage, which is determined based on factors like color, firmness, and sugar content. Harvesting methods vary depending on the size of the orchard and the variety. After harvesting, apples are stored in controlled environments with specific temperature and humidity conditions to extend their shelf life.

8. Challenges and Considerations: Apple farming is not without challenges. Pest and disease management, including issues like apple scab, codling moth, and fire blight, requires diligent monitoring and appropriate control measures. Climate variability, extreme weather events, and changing market demands are other factors that farmers need to consider.

While apple farming in Uganda can be challenging due to the tropical climate, with the right variety selection, site preparation, and management practices, it is possible to cultivate apples successfully in specific regions of the country. It is advisable to consult local agricultural experts, extension services, or experienced farmers who have already undertaken apple farming in Uganda to gain more specific insights and guidance based on the local conditions.

How best can farmers in Uganda leverage the available resources to apple farming?

Farmers in the apple farming industry in Uganda can explore several government support and initiatives to enhance their operations. Here are some relevant programs and support mechanisms:

1. National Agricultural Advisory Services (NAADS): NAADS is a government program aimed at improving agricultural productivity and incomes of small-scale farmers. Through NAADS, farmers can access agricultural extension services, including training, technical guidance, and advice on apple farming techniques, pest and disease management, and post-harvest handling.
2. Agricultural Credit Facility (ACF): The Agricultural Credit Facility is a government initiative that provides affordable credit to farmers, including those in the apple farming sector. Farmers can apply for loans to invest in apple orchard establishment, expansion, and modernization. The ACF offers loans at lower interest rates, longer repayment periods, and flexible collateral requirements.
3. Agricultural Insurance: The government, in collaboration with insurance companies, has introduced agricultural insurance schemes to protect farmers against risks such as crop failure due to adverse weather conditions, pests, or diseases. Apple farmers can explore crop insurance options to safeguard their investments and mitigate potential losses.
4. Irrigation Development: The government has initiated programs to promote irrigation infrastructure development across the country. Farmers can access support and resources to establish irrigation systems in their apple orchards, enabling them to manage water availability and enhance productivity, especially in regions with limited rainfall.
5. Research and Development Support: The government, through institutions such as the National Agricultural Research Organization (NARO), supports research and development in agriculture. Farmers in the apple farming industry can benefit from research findings, improved apple varieties, and innovative techniques developed through government-funded research projects.
6. Market Access and Value Chain Development: The government promotes market linkages and value addition for agricultural products, including apples. Farmers can explore government-supported programs that enhance market access, provide market information, facilitate value chain development, and support the establishment of processing facilities for apple products.
7. Farmer Training and Capacity Building: Various government agencies and institutions conduct training programs, workshops, and demonstrations to enhance the knowledge and skills of farmers. These initiatives focus on improved apple farming practices, post-harvest management, marketing strategies, and entrepreneurship. Farmers can participate in these training programs to expand their capabilities and stay updated on the latest industry practices.

It’s important for farmers to engage with relevant government departments, agricultural extension officers, and farmer organizations to learn about available support, initiatives, and funding opportunities specific to their region or district. Regularly checking government websites, attending agricultural expos, and networking with other farmers can also provide valuable information about government support programs in the apple farming industry.
By leveraging these available resources and adopting best practices, farmers in Uganda can increase their chances of success in apple farming. However, it is important to note that local conditions may vary, and specific recommendations may depend on the agro-ecological zone and individual circumstances.

In conclusion, apple farming in Uganda presents both opportunities and challenges. While Uganda’s tropical climate poses a significant hurdle, farmers can leverage suitable regions with cooler temperatures and higher elevations, such as the Kigezi Highlands and Mount Elgon, to cultivate apples. Selection of apple varieties adapted to the local climate is crucial, along with implementing effective orchard management practices, including pruning, fertilization, irrigation, and pest and disease management.

However, it is important to acknowledge the challenges faced by apple farmers in Uganda, such as limited availability of suitable varieties, pest and disease pressure, limited access to resources and infrastructure, and market demand constraints. Addressing these challenges requires collective efforts from farmers, government institutions, research organizations, and development agencies to support research and development, provide training and extension services, improve access to inputs and financial resources, and foster market linkages.

By adopting appropriate strategies, staying updated with advancements in apple farming techniques, and embracing climate-smart agricultural practices, farmers in Uganda can increase their chances of success in apple farming. With perseverance, continuous learning, and adaptive approaches, apple farming in Uganda can contribute to agricultural diversification, enhance income opportunities, and contribute to the overall development of the agricultural sector in the country.

Macadamia trees are medium-sized evergreen trees that belong to the family Proteaceae. They are native to the rainforests of Australia, specifically the eastern coastal regions of Queensland and New South Wales. Macadamia trees are primarily cultivated for their delicious and nutritious nuts, known as macadamia nuts.

Here are some key points about macadamia trees:

Appearance: Macadamia trees typically reach a height of 15 to 40 feet (4.5 to 12 meters) when fully mature. They have dense foliage, with glossy, leathery leaves that are usually lance-shaped and arranged in an alternate pattern along the branches. The trees produce small, fragrant flowers that range in color from creamy white to pale pink or purple.

Nut Production: The primary reason for cultivating macadamia trees is their nuts, which are highly valued for their rich, buttery flavor and nutritional content. Macadamia nuts are round to oval in shape, covered by a hard, woody shell. Inside the shell, there is a thick, creamy-white kernel that is edible and prized for its taste and texture. The nuts mature and are ready for harvest after approximately 6 to 7 months from flowering.

Varieties: There are several commercially cultivated varieties of macadamia trees, including the most common species, Macadamia integrifolia, and its close relative, Macadamia tetraphylla. Macadamia integrifolia produces nuts with a smooth shell, while Macadamia tetraphyllaA yields nuts with a rougher, four-segmented shell. Different varieties may have slightly different growth habits and nut characteristics.

Growing Conditions: Macadamia trees thrive in subtropical to tropical climates. They require a frost-free environment, with average temperatures ranging between 65 to 80°F (18 to 27°C). These trees prefer well-drained, acidic to slightly alkaline soils. Adequate rainfall or irrigation is necessary for optimal growth, typically around 40 to 80 inches (1,000 to 2,000 mm) annually. However, macadamia trees can be sensitive to excessive moisture, so proper drainage is important.

Cultivation and Maintenance: Macadamia trees are typically propagated from seeds or grafted cuttings. They are usually planted in rows or orchards, with spacing between trees to allow for their mature size. Regular pruning is essential to maintain tree shape, promote airflow, and facilitate harvesting. Macadamia trees may take several years to reach full nut production, with optimal yields achieved between 7 to 12 years after planting.

Economic Importance: Macadamia nuts are highly valued in the culinary industry for their rich, creamy flavor and versatility in various dishes, including confections, baked goods, and savory recipes. They are also a popular snack enjoyed worldwide. The cultivation of macadamia trees has significant economic importance, particularly in countries such as Australia, Hawaii, South Africa, and Kenya, where macadamia production is a major industry.

Nutritional Value: Macadamia nuts are nutrient-dense, containing healthy fats, dietary fiber, and essential minerals such as magnesium, copper, and manganese. They are also a good source of monounsaturated fats, which can have beneficial effects on heart health. However, it’s important to consume macadamia nuts in moderation due to their high calorie content.

Overall, macadamia trees are prized for their delicious nuts and are cultivated in various parts of the world for commercial production. Their attractive appearance and culinary appeal make them a sought-after tree both in orchards and home gardens.

When integrated strategically, Macadamia trees present a multitude of benefits for coffee farmers in Uganda.

1. Shade and Microclimate Regulation: Macadamia trees provide essential shade for coffee plants, shielding them from excessive sunlight and extreme temperatures. This creates a more favorable microclimate for coffee growth, while also reducing weed growth and soil erosion.

• Nitrogen Fixation: Macadamia trees possess the remarkable ability to fix atmospheric nitrogen through a symbiotic relationship with nitrogen-fixing bacteria in their root nodules. This process converts atmospheric nitrogen into a form that can be used by plants. This process enriches the soil with usable nitrogen, enhancing fertility and reducing the need for synthetic fertilizers.

• Soil Conservation: The extensive root systems of macadamia trees improve soil structure and prevent erosion, and stabilize the coffee-growing environment. This is particularly beneficial in hilly or sloping coffee-growing areas.

• Biomass and Organic Matter: Macadamia trees generate a significant amount of biomass and leaf litter, which can be utilized as mulch or organic matter for the coffee plantation. Mulching with macadamia leaves and branches helps retain moisture, suppress weed growth, and enrich the soil with nutrients and organic material.

• Agroforestry Systems: By implementing agroforestry systems that combine coffee cultivation with the planting of macadamia trees, farmers can reap the benefits of both crops. This practice promotes biodiversity, provides additional income sources, and fosters a more sustainable farming system.

• Biodiversity and Pest Control: Macadamia trees attract beneficial insects, birds, and wildlife which help control pests that may otherwise harm coffee plants. Additionally, certain macadamia tree species even emit natural compounds that repel pests like nematodes, which can be detrimental to coffee crops.

• Additional Income Streams: Macadamia trees offer additional income opportunities for coffee farmers. They can be harvested for timber, firewood, or charcoal production or extraction of valuable gums and resins. Diversifying income sources contributes to long-term sustainability.

• Windbreaks and Erosion Control: Macadamia trees act as windbreaks, reducing the impact of strong winds on coffee plants. Their extensive root systems also prevent soil erosion, safeguarding valuable topsoil during heavy rains.

While macadamia trees offer numerous advantages for coffee growing, it is important to consider the potential drawbacks as well.

By implementing appropriate management strategies, coffee farmers can effectively overcome them and maximize the benefits of integrating macadamia trees into their coffee-growing systems. Local knowledge, scientific research, and collaboration with agricultural experts can provide valuable guidance for successful implementation.  To fully leverage the benefits of macadamia trees, coffee farmers in Uganda can consider the following practices:

1. Competition for Resources: Macadamia trees, with their extensive root systems, have the potential to compete with coffee plants for vital resources like water, nutrients, and sunlight. This competition can adversely impact the growth and productivity of coffee crops.

• To mitigate this challenge, farmers should carefully plan the spacing between the macadamia trees and coffee plants. Consideration should be given to selecting smaller or less competitive macadamia species that have narrower canopies or slower growth rates

• Allelopathy: Certain macadamia species release chemical compounds that can inhibit the growth of other plants, including coffee. This phenomenon is known as allelopathy.

It’s advisable to choose macadamia species that are less allelopathic or plant them at a distance from the coffee plants. Regular monitoring of plant growth and health can enable negative impact identification and allow farmers to take appropriate measures.

• Maintenance and Pruning: Macadamia trees require regular maintenance and pruning to ensure optimal growth and prevent over-shading of coffee plants. Without proper management, the macadamia trees may densely populate reducing sunlight penetration to the coffee crop.

Farmers should allocate time and resources for regular pruning of the macadamia trees to maintain an appropriate level of shade and prevent excessive light competition.

• Species Selection: The choice of macadamia species is crucial for successful integration into coffee farming. Certain macadamia species may exhibit aggressive growth habits, invasiveness, or susceptibility to pests and diseases.

It is important to select macadamia species that are well-suited to the local climate, soil conditions, and have a track record of successful integration with coffee crops. Consulting with local agricultural extension services or experts can help farmers make informed decisions about species selection.

• Long-Term Planning: Macadamia trees are long-lived and can persist in coffee plantations for several decades. Therefore, it is essential to consider long-term planning when integrating macadamia trees. Farmers should evaluate the potential impact of macadamia trees on the coffee crop over time, considering factors such as changing coffee varieties, market demands, and evolving climate conditions.

Regular assessment and adaptive management practices can help farmers address any emerging challenges and make adjustments as required.

It’s crucial to recognize that each coffee farm is unique, and the specific recommendations may vary depending on the local context. Therefore, consulting with local agricultural experts who possess knowledge and experience in coffee cultivation and agroforestry practices in your region is of utmost importance.

In conclusion, macadamia trees can serve as a valuable asset in coffee farming systems, providing numerous benefits when integrated thoughtfully. These trees offer shade and regulate microclimate, facilitate nitrogen fixation, contribute to soil conservation, generate biomass and organic matter production, and aid in pest control. By strategically incorporating macadamia trees, coffee farmers in Uganda and other regions can enhance productivity, improve soil fertility, and promote sustainable farming practices.

However, it is crucial to acknowledge the potential challenges and drawbacks associated with using macadamia trees. These include resource competition, allelopathy, maintenance requirements, species selection, and long-term planning. By considering these factors and implementing appropriate management strategies, coffee farmers can overcome the disadvantages and optimize the advantages of macadamia tree integration.

Overall, macadamia trees offer a sustainable and environmentally friendly approach to coffee farming, making significant contributions to biodiversity conservation, soil health, and ecosystem resilience. By harnessing the benefits of these trees, coffee farmers in Uganda and beyond can enhance productivity while promoting the long-term sustainability of their agricultural practices. 

How can Agri-SMEs engage in International Trade?

International trade refers to the exchange of goods and services between countries. It involves importing and exporting goods and services across borders, typically for economic gain. International trade can take place through various channels, including trade agreements, multinational corporations, and small and medium-sized enterprises (SMEs).

Engagement in International trade is one of the ways Agri-SMEs (small and medium-sized enterprises) in Uganda can increase profitability, efficiency, and diversity. International trade presents a variety of benefits to SMEs and the economy at large. SMEs can thus engage in international trade and expand their customer base beyond the domestic market by following these steps:

1. Identify exportable products: The first step is to identify the products that can be exported to other countries. Agri-SMEs should focus on products that have high demand in international markets, such as coffee, tea, spices, fruits, vegetables, and other value-added products or high-value crops.

• Conduct market research: The second step is to conduct market research to identify potential buyers and markets. It’s crucial to conduct market research to identify potential buyers and markets that are not only convenient but also profitable. This includes researching market trends, consumer preferences, and the regulatory environment in the target markets. Agri-SMEs can also work with government trade promotion agencies to access market intelligence and identify potential buyers and markets. Agri-SMEs can equally use online resources, attend trade shows and conferences, and work with trade associations or agents to identify potential buyers and markets.

• Meet regulatory requirements: Regulatory requirements for exporting agricultural products can be complex and vary depending on the destination market. Agri-SMEs should work closely with government agencies responsible for export regulations to ensure compliance with regulations, including food safety, licensing and labeling requirements.

• Develop a marketing plan: Agri-SMEs should develop a marketing plan to promote their products in international markets. This may be in form of developing a website, participating in trade shows, and working with export agents and brokers. Developing a marketing plan is crucial for any Agri-SME to successfully promote its products in international markets. This should include understanding the target market, developing a strong brand, and identifying the best marketing channels to reach potential buyers.

• Build relationships with buyers: Building relationships with buyers is critical for successful international trade. Agri-SMEs should focus on building long-term relationships with buyers, understanding their needs and preferences, and offering high-quality products and excellent customer service. They can build the relationships by being proactive in reaching out to potential buyers, attending trade fairs, and leveraging government-supported business matching programs. Maintaining communication and being responsive to the needs of the buyers are also essential.                                               

• Secure financing: International trade can be costly, and Agri-SMEs may require significant investment in equipment, transportation, marketing and exportation of their products. Agri-SMEs can access financing from government and private sector sources to support their export activities. They can also work with banks and other financial institutions to secure financing to support the smooth running of the processes.

• Monitor and evaluate performance: Agri-SMEs should regularly monitor and evaluate their performance in international trade. This may include tracking sales, analyzing customer feedback, regularly reviewing and updating their marketing plan and evaluating the effectiveness of marketing activities.

Why is it Important for Agri-SMEs to engage in International Trade?

For Agri-SMEs, engaging in international trade can bring several benefits. Here are some of the key reasons why international trade is important for Agri-SMEs:

1. Access to new markets: By exporting their products to new markets, Agri-SMEs can expand their customer base beyond the domestic market. This can increase sales and revenue and provide opportunities for growth.

• Diversification: Engaging in international trade allows Agri-SMEs to diversify their customer base, which can help mitigate risks associated with dependence on a single market.
• Improved competitiveness: International trade can help Agri-SMEs improve their competitiveness by exposing them to new ideas, technologies, and best practices. This can help them improve their products, processes, and overall business operations.

• Increased profitability: Engaging in international trade can increase profitability for Agri-SMEs by allowing them to take advantage of economies of scale, reduce production costs, and increase revenues.

• Job creation: International trade can create new job opportunities for Agri-SMEs by increasing demand for their products and services. This can help stimulate economic growth and development.

In conclusion, International Trade is an essential component of the global economy, and it offers many benefits for Agri-SMEs, including access to new markets, diversification, improved competitiveness, increased profitability, and job creation. Engaging in international trade can be a challenging but rewarding opportunity for Agri-SMEs in Uganda. By developing a well-thought-out export strategy and building strong relationships with buyers, Agri-SMEs can access new markets and grow their business beyond the domestic market.

This explains why Finding XY is engaging in export promotion exercises for SMEs under the Women in Agriculture Impact Investment Facility.

Introduction and overview

Soybean is a versatile and highly nutritious crop thus very important for the agricultural industry and has gained popularity in Uganda. Soybean is an economically viable and environmentally friendly crop that is a key raw material for vegetable oil, feeds, and food.  It promotes sustainable cropping systems by improving soil fertility through the fixation of atmospheric nitrogen and also disrupts the life cycle of several pests and diseases.

It is encouraged as a rotation crop to improve productivity of other crops being grown (Tukamuhabwa and Obua,2015). Its dense canopy helps to conserve soil water moisture and suppress weeds in the soybean field. Its extensive root network maintains the soil structure and promotes infiltration, crucial for absorption of water and nutrients.

In this report, we will examine the current state of soybean value chain in Uganda as well as its opportunities and challenges.

BACKGROUND

Soybean was first introduced to Uganda in the 1980s as a crop that could improve soil fertility and provide a protein-rich food source. The soybean plant is a hardy and resilient crop that can thrive in various soil types and climatic conditions.

Uganda is well-suited for soybean production due to its favorable climate and fertile soil. Soybean cultivation in Uganda is carried out by both small-scale farmers and large commercial farmers. 

Over the years, soybean has become an important crop in Uganda, especially for small-scale farmers who use it for both food and income.

   Current state

Today, soybean is grown in various regions of Uganda, including the northern, eastern, central and western regions. The crop is usually grown in the rainy season, between March and May, and harvested in August or September. The majority of farmers grow soybean on small plots of land and use traditional methods of cultivation.

Small-scale farmers typically use traditional techniques and hand-held tools, while commercial farmers use modern equipment and technologies to optimize production.

The season of harvesting of Soybean depends on the time of sowing and the variety grown. For each farmer, how long harvest takes depends on how many acres they farm, how many people they have helping out, the size of their equipment and how many combines, tractors and semis they have running.

Presently, Soybean has a wide range of uses and here are some of the common uses:

• Used as food. Soybean is used to make a variety of food products, including tofu, soy milk, tempeh, miso, soy sauce, and textured vegetable protein (TVP). Soybean oil is also a popular cooking oil and is used in many processed food products.
• Used as animal feed. Soybean is a primary ingredient in animal feed for livestock, poultry, and aquaculture.
• Used to make industrial products: Soybean is used to produce a variety of industrial products, such as biodiesel, plastics, adhesives, and lubricants.
• Health supplement production. Soybean is used to produce health supplements, such as soy protein powders and is flavone supplements, which are popular among athletes and health-conscious consumers.
• Soil improvement. Soybean is a nitrogen-fixing crop, which means it can add nitrogen to the soil, improving soil fertility and reducing the need for synthetic fertilizers.

According to the Uganda Bureau of Statistics, soybean is grown in various regions of the country, with the highest acreage in the central and eastern regions.

Soya bean is the number one income earner crop in Northern and Eastern Uganda. Farmers earn approximately UGX 1,200,000 per hectare per season.

Challenges of the Soybean Value chain in Uganda

Despite the positive trends in soybean production in Uganda, there are several challenges facing the soybean seed growing system and soybean production in Uganda. These include:

• Counterfeit seed on the market. This is worsened by Pests and diseases and the breakdown of crop resistance. Good quality seed is quite expensive for farmers to afford.
• Weak policy enforcement which would otherwise improve the value chain performance.
• Climate change. This includes unpredictable weather conditions, such as droughts, floods, and extreme temperatures, which makes yield forecast hard for farmers as well as breeders of seed on a research level.
• Labor inefficiency in the production chain during planting, weeding, and harvesting, which reduces yield quality.
• Dysfunctionality of farmers’ groups and marketing activities.
• Price fluctuations. Soybean prices are highly volatile which undermines planning and usually shifts the customer’s attention away from the product’s features to its price. 

Soybean prices are influenced by global demand and supply factors, such as changes in consumption patterns, trade policies, and production trends in major producing and consuming countries.

• Transportation costs, such as freight charges for exporters impacts the price of soybean.
• Storage and handling costs can also impact soybean prices, especially if there are bottlenecks in the

WHAT SHOULD BE DONE?

To expand the opportunities for further growth of the soybean value chain, a couple of measures can be undertaken, including:

• Value addition: Value addition is critical to the success of the soybean value chain. Processors add value to soybeans by producing soybean oil and meal, which are used in a wide range of products, such as food, feed, and biofuels. By adding value to soybeans, processors are able to increase their profitability, curb price fluctuation, and provide a market for farmers.
• Strengthening of linkages: The soybean value chain demonstrates the importance of linkages between different actors in the value chain. Farmers, processors, traders, and retailers need to work together to ensure that soybeans are produced, processed, and sold in a way that benefits everyone in the value chain.
• Technology adoption: Technology adoption is critical to the success of the soybean value chain. Soybean farmers need to further adopt new technologies, such as genetically modified seeds, which have led to higher yields and increased profitability.
• Risk management: The soybean value chain involves a significant amount of risk, including production risks, market risks, and price risks. Farmers and other actors in the value chain need to adopt strategies to manage these risks, such as diversifying their production, using forward contracts, and hedging.
• Sustainable practices: The soybean value chain has also demonstrated the importance of adopting sustainable practices. Soybean farming can have negative environmental impacts, such as deforestation, but farmers and other actor in the value chain can adopt sustainable practices, such as no-till farming and agroforestry, to reduce these impacts.

Future prospects for the Soybean Value Chain

In recent years, the demand for soybean has increased significantly due to its various uses, including as a source of protein for both human consumption and livestock feed. There are also opportunities for growth in the soybean sector in Uganda. The increasing demand for soybean products, both domestically and internationally, presents a significant opportunity for farmers and companies to increase production and improve their livelihoods.

Additionally, the potential for value addition, such as processing soybean into soy flour, soybean milk, yogurt, oil, etc. could also help to increase the profitability of the crop.

The country has experienced rapid growth in soybean cultivation in recent years, with the government actively promoting its production as a way to increase food security and economic growth.

In order to increase the productivity and profitability of soybean farming in Uganda, the government and other organizations are working to provide farmers with access to improved seeds, fertilizer, and other inputs. Additionally, efforts are being made to enhance the capacity of farmers to better manage their farms, including the provision of training and extension services.

In conclusion, soybean is a promising crop for Uganda due to its high nutritional value and numerous uses. Uganda has made significant progress in growing and promoting the crop, and there is potential for further growth in the sector with continued support and investment.

A small-scale business can be defined as a privately owned and operated company that has relatively low sales volume, fewer employees, and a smaller physical presence than larger companies. Small-scale businesses are generally classified as having fewer than 500 employees, and they may operate in a single location or multiple locations.

Small-scale businesses may offer products or services in a variety of industries, including retail, healthcare, finance, manufacturing and more. These businesses may be run by a sole proprietor, a partnership or a small team of employees.  They often serve local or regional markets, although they may also operate on a national or international scale.

Globally, there are more than 32 million small to medium-sized businesses yet 20% of these businesses close by year one and nearly 50% by year five. The reasons for lower survival rates in small businesses are numerous, but a major component of business failure is stagnation.

Sustainable growth is one of the many goals every entrepreneur has. However, it requires dedication, consistency, research to identify where you need to go including:

• Knowing your cash flow and areas where you could curb spending.
• Being connected to your customer base and the social platforms they’re on.
• Understanding your weakest areas and where to ask for support.

Sustainable growth means constant improvement efforts and being open to trying new things. Quarterly, thorough reviews are a great starting place if you feel out of your element with this startup-like mindset.

1. Organize Your Processes and Workspace

As you get deeper into your business, it literally becomes more cluttered. There may be a lot of things like pending payments, unsorted documents or content. However, your goal to improve business becomes easier when you implement more organization and efficiency. This might take as far as getting rid of clutter, adding relevant team members to platforms e.tc.

2. Revisit Your Finances

To improve your business, you need to know financial numbers like the back of your hand. This includes everything from cash flow to your business’s credit score. Cash flow is a key indicator of growth or early failure, with 46% of small businesses exiting with irregular cash flows.

By revisiting your finances, pay close attention to the accuracy of numbers and determine where you may be spending egregiously. The only way you can identify financial improvements is by knowing your numbers.

3. Connect With Your Community

Do you remember how you vigorously hunted for customers in the early days? Chances are that spark has dimmed over time, and you may have lost contact with customers to focus on other aspects of the business.

Reengaging with your community is a necessary and fulfilling method to enhance business. In fact, 86% of loyal customers will refer others to a business, furthering the community around brands.

4. Connect With Your Employees

Your employees are also influential on your path to improving business. Creating a positive work environment for your team encourages motivation, productivity, and fresh ideas.

Employees seek out workplaces where they feel valued and respected, and you can implement strategies to create spaces for intentional conversation and celebration. This could be

 anything from an open-door policy between you and employees to quarterly team feedback meetings and birthday or holiday greetings.

5. Consider Acquisitions and New Development

A great way to focus on business development is by looking around. Your market is full of inspiration

and insightful data, such as a new niche, a trend, or a competitor. You may pinpoint a struggling business that could be open for a buyout, a potential opportunity to break into a new clientele. You should also aim to diversify your product lines based on the results of your research. This is a great way to keep your business fresh and in the social conversation

6. Know When You Need Support

The final method to improve business may be a hard lesson for some headstrong business owners. But you need to get comfortable knowing when you’re out of your league and ask for guidance.

Sustainable growth in entrepreneurship refers to a business strategy that focuses on achieving long-term growth while also ensuring the responsible use of resources and the preservation of the environment, society and economy.

It involves developing and scaling a business in a way that is financially viable, socially responsible, and environmentally sustainable. This means considering the impacts of the business on all stakeholders, including customers, employees, suppliers, the local community and the environment, and taking steps to minimize negative impacts and maximize positive impacts.

Sustainable growth is touted to be the biggest challenge faced by entrepreneurs all over the world. In spite of being uneducated, there are entrepreneurs living in remote villages who successfully manage farming and sharecropping business without any degree in business management. They oversee strong networks of farmers, merchants, and seasonal workers. (Mukherjee, 2018).      

In doing so, they actually create a long-standing value without exhausting the finite resources at their disposal. It is interesting to note that even with the drastic transformation of circumstances the ground rules of sustainable business growth have remained unchanged.

Here are six of them-

1. Authentic purpose

There has to be a guiding text for every aspect of a business including recruitment, customer management, product development and sales. To do this, businesses first need to pinpoint why they do what they do. That will be the company’s True direction.

Achieving sustainable success is only possible when companies constantly review the sense of purpose and ensure the organization carries it out well. A bona fide and stimulating principle allows an unvarying and consistent sense of focus, strong emotional engagement and constant, realistic approach (Pradhan, 2007).

2. A powerful brand

According to Pradhan, for one to create a scalable business model, they ought to comprehend how decisive it is to create brand equity and emotional engagements with customers. “It is the relationships that connect customers to products and keep them coming back. Brand building is all about making and nurturing those connections over time,” he opined.

Some fundamental rules to connect, influence and go ahead with your brand include selecting the target audience, engaging with the public and inspiring the consumers. A simple, motivating communication has much more potential than one that highlights product features, functions, or ideas. Care should however be given to creation of value out of the business’ branding or marketing budget.

3. Partnership and collaboration

Doing everything by yourself can be appealing initially as funds are feeble and aspirations are high. Though the hands-on approach is a good thing, handling more than you can manage, particularly in domains you lack expertise, can be detrimental. With the global freelance economy, it is now very easy and convenient to appoint talented expertise on a freelance basis (Balasubramanian, 2006).

According to Balasubramanian, there is no dearth of websites and online marketplaces which provide dedicated resources in design, development, banking, sales, and legal services. Begin with small assignments and short investments but most importantly know the exact requirements and engaging skilled resources for achieving targeted goals.

4. Customer retention

In their book Leading on the Edge of Chaos, Emmet and Mark Murphy say, “Acquiring new customers can cost an organization around five times more than retaining current ones.” Experts also state that reducing customer defection rates by 5% increases profitability by 25% to 130%, depending on the domain of your business. The very first deal you make with a customer sets the ball for successful retention rolling and it goes on all through the lifespan of the relationship making it more likely to do commerce with existing customers than with new ones. It is thus imperative for a business to have a strong sales team!

5. Repeatable sales

It is never enough to just create an inimitable product. Recurring sales are indispensable in order to create a scalable model. Signing up a few customers is not a big deal; what actually matters is to plan and apply sales processes again and again at an ever-increasing scale (Shah, 2008).

“A scalable sales model is when you can add on to the sources of your customer leads on a constant basis, your customer acquisition cost is considerably less than the amount you can eventually receive from that customer and when your buyers get the right product in the right place at the right time,” elaborated Maulik Shah, Founder, Paynear, a transactions processing company.

6. Adaptive leadership

To ensure growth, business owners must develop themselves as a leader. Given that a company’s requirements alter with time, the leader must be ready to evolve at the right tempo. In doing that one needs to be introspective, aware, and possess a devoted sense of rationale-both for short and long-term gains (Shah, 2008).

Shah believes a flexible leadership approach emerges from being watchful. “Since the individual, interpersonal, and professional lives are all interrelated, being mindful helps in appreciating the associations we make and how to make most of them for initiating, evolving, and leading a business,” he concluded.

Fraud is the intentional misrepresentation of information(financial) by one or more individuals among management, employees, or third parties. Fraud involves collusion, forgery, intentional omissions, misrepresentations, disclosure of incomplete facts, intentional deception or the override of the company’s internal control.

TYPES OF FRAUD

Fraud in a company may involve:

•  Identity theft e.g. Impersonation of a staff member.
• Alteration of accounting records or other documents.
• Misappropriation of assets or theft.
• Suppression or omission of the effects of transactions from records or documents.
• Recording transactions without substance.
• Intentional misapplication of accounting policies or willful misrepresentation of transactions or of the entity’s state of affairs.
• Fictitious banking.
• Unauthorized debt elimination/write-off.
• Phishing.
• Asset misappropriation.
• Financial statement fraud.
• Bribery and corruption.
• False advertising.
• Embezzlement taking money under your control that is not yours.
• Security frauds.
• Investment frauds.

Who commits Fraud?

Fraud can be committed by anyone with specialized knowledge and criminal intent within or outside the company. It could be:

• Staff Members

Causes of Fraud

1. Personal Integrity of an employee is one of the important reasons for fraud. As an individual adopts a strong code of personal ethics and internalizes a standard of high personal integrity, the probability that they will commit fraud is reduced.

3. Inefficient management. If management is not exemplary to the employees who have less knowledge and responsibility, the employees are likely to do their jobs in a fraudulent manner.
4. Inadequate employee remuneration structure.

Indication of Fraud

• Destruction of documents.
• An Excessive number of photocopies of documents.
• Too many cash transactions.
• Lack and failure to make reconciliations to either stock or cash.
• Missing documents/ lack of supporting documents like receipts and invoices.
• Excessive bad debts written-off
• Excessive spoilage or damaged goods.
• Business dealings with no apparent economic purpose.
• Excessive changes in operating procedures and accounting principles
• Unjustified changes in accounting personnel.
• Lack or absence of internal audit.

Effects of Fraud

Fraudulent activities within a company are likely to have an adverse impact on every aspect of the business. From finances to brand image and employee morale. The effects of fraud may include:

Loss of company Reputation.

Loss of business reputation is inevitable after a fraudulent act. This is the case if the fraud occurred both internally and externally.

For example, a business being victim to fraudulent activity can make customers and clients lose trust in the integrity of the business systems. On the other side of the coin, an internal fraudulent crime can lead customers and clients to lose trust in the company’s workers as well.

Employee or operations morale

Morale within the company can be affected in a variety of ways. For example, employees may feel guilty for not detecting fraudulent activity, affecting their confidence in their abilities. This can have a knock-on impact on employee productivity especially if the fraud is conducted at the managerial level. Ultimately, productivity and efficiency will drop.

Loss of employees

Fraud is a crime and in cases where litigation is involved, the impact is that you could lose employees. For example, if employees are concerned about their own reputation in dealing with your business, they may feel that leaving is the best course for their career since they will have lost trust or faith in the company and the company message. As a result, employees may decide to seek work elsewhere, further increasing the financial strain and resourcing on the company.

Loss of customers

Generally, people are much less willing to deal with a company that has fraud in its history.  Fraud can have irreversible impacts on the client’s mental health and their life. Because of this, even after the whole situation blows over, it’s likely that those involved with your business will be far less confident in dealing with you. Businesses may feel worried about being associated with you, and the effect this might have on their own brand image. Similarly, it’s unlikely that new customers will feel safe to seek your services if you’ve been involved in a fraud allegation. As a result, it’s likely that they’ll find a new business to deal with for the services you offered them.

Huge financial impact

The legal fees incurred to support your business after a fraud allegation can be huge. This, of course, depends on the nature of the fraudulent activity, and whether it was external or internal. It also depends on how many people, including employees, clients, and customers were involved.

On top of this, a business will have to put strict measures in place to avoid this from happening again, whether it involves hiring new talent to deal with accounts and systems properly or putting new processes and checks in place to avoid Fraud.

Some fraudulent activity, especially external cases, can involve monetary fines or even ransoms having to be paid.

 Digital effects

There could be a loss of company data especially when fraud is external and this would mean putting in place new systems and fail-safes to avoid it from happening again. There will also be a lot required to potentially recover lost information, and rebuild the systems to fix the problem. Lengthy audits and staff training will be required to get over the effects of data breaches.

Prevention of Fraud

1. Be skeptical

Thoroughly question all deals, opportunities, documents, transactions, and information for appropriateness, correctness, completeness, and applicability. If it sounds too good to be true, it probably is not true.

2. Know your business inside out

Have a thorough understanding of your business so you know how it operates, the staff you employ, the products and services it provides, your target market and your business, and your legal and regulatory obligations. This will help you to timely detect fraudulent activity.

3. Know your customers and suppliers

When you understand whom you do business with, you can spot any business request or transaction that looks wrong for that customer or supplier and may be fraudulent.

Conduct due diligence using a risk-based approach, such as checking the customer or supplier details you have on file, as well as online searches.

4. Identify areas where your business is vulnerable to fraud.

This involves the identification of potential ways in which a fraudster targets your business, both internally and externally, and testing the systems you already use to reduce risk. It should be ensured that staff knows systems of fraud prevention and that they are regularly reviewed.

5. Develop a fraud detection, prevention, and correction strategy.

Think about the right fraud prevention and detection strategy for your business: it should detail controls and procedures. Talk about fraud with your staff, suppliers, and other contacts. Your staff needs to understand the risks and how losses affect the business and themselves.

6. Design of an internal control system.

The overall design, structure, extent, comprehensiveness, and content of the internal control, including the procedures, and activities as well as the ongoing operations and events must represent the underlying intent of the company’s mission, vision and organizational objectives and are free from significant deviation of operational efficiency.

7. Develop an action plan

While prevention is better than cure, it’s important for you and your business to be prepared for the worst. Having an action plan in place will help limit your losses to fraud.

8. Train employees to always report fraud when they get suspicious of fraud taking place they should always report t immediately

Digital technologies have created new spaces for interaction and enabled new ways to connect, share experiences, work, and build communities. These technologies continue to be influential and have the potential of enhancing growth and expanding opportunities for the realization of women’s rights in Africa.

However, digital divide continues to be a global concern. Generally, digital divide relates to the difference between groups with access to technology and the internet and those without. This can surface in three ways, thus;

• Gender divide, where women are less likely to own a phone or access the internet.
• Social divide, where unequal access to the internet contributes to social division where groups without internet access don’t benefit from ‘global village’ interactions.
• Universal access, divide where individuals with physical disabilities not having access to or the ability to use hardware and software.

Globally, 3.7 billion people do not have access to the internet. Half of them are women who make up 28.4 percent of the workforce engaged in science, technology, engineering, and mathematics (STEM) and only 30 percent on average in sub-Saharan Africa (UN Women,2022).

Despite the reduction of the digital gender divide in some parts of the world, research indicates that it is widening in Africa. According to the International Telecommunications Union (ITU), in 2013, only 37% of all women were online, compared to 41% of all men. The digital gender divide in Africa has continued to widen since then, with women in developing countries being 14% less likely to own a mobile phone than men and are less likely than men to utilize mobile data, social media applications, or SMS services.

In Uganda, according to a survey conducted in 2015 by the Uganda Communications Commission survey on the usage and active usage of ICT, only 44% of women, owned and could use a phone at any time compared to 62% of the men. Additionally, only 15% of women had used a computer or the internet in the last three months prior to the survey compared to 21% of the men that were interviewed. The digital divide gap was even worsened by the introduction of OTT Tax which makes destitute populations consider internet usage an opportunity cost.

Affordability, low literacy and digital skill levels, safety and security concerns, and lack of family approval are the four key barriers to mobile ownership and mobile internet use for women in low- and middle-income countries according to GSMA.

It is however imperative that the digital divide is addressed since digital technologies contribute towards greater inclusive economic growth and stability through increased employment (through digitally enabled jobs), better literacy, financial inclusion, and participatory governance.

Empowering women through digital technology benefits businesses, economies, and societies since it creates a positive ripple effect across generations. Acceleration of women’s digital inclusion can be achieved through;

• strengthening the implementation of cyberbullying laws-which will harness a safe environment for women.
• Use of inclusive online communication and marketing material
• Increase rural electrification.
• And providing simple, low-cost options for those who are socially and economically excluded to get online.

Financial risk management is the process of evaluating and managing current and possible financial risks to decrease an organization’s exposure to risk. Financial risk management involves identifying the risk, measuring it, evaluating all possible remedies, developing a strategy, and then implementing the steps and financial instruments necessary to minimize potential ramifications.

A risk is defined as a possible event or circumstance that can have negative influences on the business. And hence a financial risk is a form of risk that arises from an event and has an adverse impact on the business’s financial condition.

Market risks

Market Risks involve the risk of changing conditions in the specific marketplace in which a company competes for business. One example of market risk is the increasing tendency of consumers to shop online. This aspect of market risk has presented significant challenges to traditional retail businesses in the Agricultural context.

Companies that have been able to make the necessary adaptations to serve an online shopping public have thrived and seen substantial revenue growth, while companies that have been slow to adapt or made bad choices in their reaction to the changing marketplace have fallen by the wayside.

This example also relates to another element of market risk: the risk of being out maneuvered by competitors. In an increasingly competitive global marketplace, often with narrowing profit margins, the most financially successful companies are most successful in offering a unique value proposition of their products that makes them stand out from the crowd and gives them a solid marketplace identity.

The most common types of market risks include interest rate risk, equity risk, currency risk, and commodity risk.

Interest rate risk

Interest rate risk covers the volatility that may accompany interest rate fluctuations due to fundamental factors, such as bank announcements related to changes in monetary policy. This risk is most relevant to investments in fixed-income securities, such as bonds which are considered risk-free investments for Agri-SMEs mostly because they operate in highly risky spaces.

Equity risk

Equity risk involves the changing prices of stock investments. This risk, therefore, applies to Agri-SMEs that have either gone public (through an Initial Public Offering) or are actively engaged in stock markets.

Commodity risk

This is the risk of changing commodity prices of commodities such. Almost all Agricultural products are prone to commodity risk since prices for Agricultural produce change almost per season, or even several times during the same season!

Currency risk or foreign exchange-rate risk This arises from the change in the price of one currency in relation to another. It is usually incurred when a financial transaction is made in a currency other than the operating currency which is often the domestic currency of a business for example making a transaction in US dollars instead of the Ugandan shillings. The risk arises as a result of unfavorable changes in the exchange rate between the transactional currency and operating currency. Agri-SMEs that deal with multi currencies either through export, import or investment are subject to foreign exchange fluctuations which expose the companies to unpredictable realized losses arising from the negative effect on the value of assets, investments, and revenue streams.

Credit Risk

This typically relates to the risk businesses face by extending credit or lending to customers. It usually arises when borrowers/customers fail to make the required payments. A business takes a credit risk when it provides financing of purchases to its customers, due to the possibility that a customer may default on payment. It is recommended that a customer’s creditworthiness be measured by the five Cs: credit history of the customer, capacity to repay, capital, the loan’s conditions, and associated collateral. Agri-SMEs are encouraged to establish functions solely responsible for assessing the credit risks of their current and potential customers before credits are offered.

Liquidity Risks

This is a risk that occurs when a company has no cash to meet its financial obligations as and when they fall due. This can arise when for a certain period of time, a given financial asset, or commodity cannot be traded quickly enough in the market without impacting the market price or cash cannot be got when it’s needed despite ownership of assets.

General or seasonal downturns in revenue can present a substantial risk if the company suddenly finds itself without enough cash on hand to pay the basic expenses necessary to continue functioning as a business. This is why cash flow management is critical to business success and why analysts and investors look at metrics such as free cash flow when evaluating companies as equity investments. A company must handle its own credit obligations by ensuring that it always has the sufficient cash flow to pay its accounts payable bills in a timely fashion. Otherwise, suppliers may either stop extending credit to the company, supplier relations will be negatively affected, and the company’s market price will be driven down due to the inability to implement post-paid contracts.

Operational Risk

Operational risks refer to the various risks that arise from a company’s ordinary business activities. It summarizes the uncertainties and hazards a company faces when it attempts to do its day-to-day business activities the operational risk category includes lawsuits, horizon risk, fraud risk, personnel (employee) problems, and business model risk; which is the risk that a company’s models of marketing and growth plans may prove to be inaccurate or inadequate.  Operational risks result from breakdowns in internal procedures, people, and systems as opposed to problems incurred from external forces, such as political or economic events, or inherent to the entire market.

Strategies to manage risks

Risks can be managed in mainly 3 steps; Risk identification, assessment, and treatment.

Risk Identification

The first step in the risk management process is to identify all events that can negatively (risk) or positively (opportunity) affect the objectives of the business including business milestones, financial trajectory, timelines, and scope.

These events can be listed in the risk matrix and later captured in the risk register.

Risk is characterized by its description, causes, and consequences, qualitative assessment, quantitative assessment, and mitigation plan. Risk can also be characterized by who is responsible for its action (Risk owner). Each of these characteristics is necessary for a risk to be valid.

In order to be managed effectively, the risks identified must be as precise and specific as possible. The title of the risk must be succinct, self-explanatory, and clearly defined.

All members of the company can and should identify risks, and the content of these is the responsibility of the risk Owners. Risk Managers are responsible for ensuring that a formal process for identifying risks and developing response plans are conducted through exchanges of risk report forms with risk owners.

tools to help identify risks

• Analysis of existing documentation.
• Interviews with experts.
• Conducting brainstorming meetings.
• Using the approaches of standard methodologies.
• Considering the lessons learned from risks encountered in the past.
• Using pre-established checklists or questionnaires covering the different areas of the business (Risk Breakdown Structure or RBS).

Risk Assessment

There are two types of risk assessments; thus qualitative and quantitative.

A qualitative assessment analyses the level of criticality based on the event’s probability and impact.

 A quantitative assessment analyses the financial impact or benefit of the event. Both are necessary for a comprehensive evaluation of risks and opportunities.

Qualitative Assessment

The Risk Owner and the Risk Manager will rank and prioritize each identified risk and opportunity by occurrence probability and impact severity, according to the business’s criticality scales.

Evaluating occurrence probability (P):

This is determined preferably based on experience, the progress of the business, or else by speaking to a risk expert. The level of probability is usually measured on a scale of 1 to 99%.

For example, suppose the risk that: “the price of soya will change in the next season” is 70% probable. This could be determined by historical price change analysis.

Evaluating impacts severity (I):

To assess the overall impact, it is necessary to estimate the severity of each of the impacts defined at a given business level. A scale is used to classify the different impacts and their severities. This ensures that the assessment of the risk is standardized and reliable.

The criticality level of risk or opportunity is obtained by the equation: Criticality = Probability x Impact

The purpose of the qualitative assessment is to ensure that the risk management team prioritizes the response on critical items first.

Quantitative Assessment

In most businesses, the objective of the quantitative assessment is to establish a financial evaluation of a risk’s impact or an opportunity benefit, should it occur. This step is carried out by the Risk Owner, the Risk Manager (with the support of those responsible for estimates and figures), or the financial controller depending on the organizational setup. These amounts represent a potential additional cost (or a potential profit if we are talking about an opportunity) not anticipated in the organizational budget.

For this, it is therefore necessary:

• To evaluate the additional costs incurred by financially reviewing:

• Hours of internal work.
• Hours of subcontracting.
• Additional work to do.
• Amendments and/or claims made to contracts.
• To calculate the cost of the undesired event’s consequences by adding these values.

This step will make it possible to estimate the need for an additional budget for the risks and opportunities of the project.

RISK TREATMENT

In order to treat risks, an organization must first identify its strategies for doing so by developing a treatment plan. The objective of the risk treatment plan is to reduce the probability of occurrence of the risk (preventive action) and/or to reduce the impact of the risk (mitigation action). For an opportunity, the objective of the treatment plan is to increase the likelihood of the opportunity occurring and/or to increase its benefits. Depending on the nature of the risk or opportunity, a response strategy is defined for the business. The following 7 strategies are possible:

7 Risk Response Strategies

• Accept: Do not initiate any action but continue to monitor.
• Mitigate/Enhance: Reduce (for a risk) or increase (for an opportunity) the probability of occurrence and/or the severity of impact.
• Transfer/Share: Transfer responsibility of a risk to a third party who would bear the consequences of the problem (share the benefits of a realized opportunity).
• Avoid/Exploit: Entirely eliminate uncertainty / take advantage of the opportunity. 

Monitoring the progress of the treatment plan is the responsibility of the risk owner. They must report regularly to the risk manager, who must keep the risk register up to date.

Note: The cost of a risk mitigation plan must be integrated into the budget of the project.

RISK MITIGATION

Is a strategy to prepare for and lessen the effects of threats faced by a business. Comparable to risk reduction, risk mitigation takes steps to reduce the negative effects of threats and disasters on business continuity.

There are five general steps in the design process of a risk mitigation plan:

• Identify all possible events in which risk is presented. A risk mitigation strategy considers not only the priorities and protection of mission-critical data of each organization but any risks that might arise due to the nature of the field or geographic location. A risk mitigation strategy must also factor in an organization’s employees and their needs.
• Perform a risk assessment, which involves quantifying the level of risk in the events identified. Risk assessments involve measures, processes, and controls to measure the impact of risk.
• Prioritize risks, which involves ranking quantified risks in terms of severity. One aspect of risk mitigation is prioritization, accepting an amount of risk in one function of the organization to better protect another. By establishing an acceptable level of risk for different areas, an organization can better prepare the resources needed for business correspondence, while putting fewer mission-critical business functions on the back burner.
• Track risks, which involves monitoring risks as they change in severity or relevance to the organization. It’s important to have strong metrics for tracking risk as it evolves, and for tracking the plan’s ability to meet compliance requirements.
• Implement and monitor progress, which involves re-evaluating the plan’s effectiveness in identifying risk and improving as needed. In business continuity planning, testing a plan is vital. Risk mitigation is no different. Once a plan is in place, regular testing and analysis should occur to make sure the plan is up to date-and functioning well.

Types of risk mitigation strategies

There are several types of risk mitigation strategies. Often, these strategies are used in combination with each other, and one may be preferable over another, depending on the company’s risk structure. They are all part of the broader practice of risk management.

1. Risk avoidance is used when the consequences are deemed too high to justify the cost of mitigating the problem. For example, an organization can choose not to undertake certain business activities or practices to avoid any exposure to the threat they might pose. Risk avoidance is a common business strategy used by many businesses.
2. Risk acceptance is accepting risk for a given period of time to prioritize mitigation efforts on other risks. Almost all Agricultural activities involve some sort of risk acceptance.
3. Risk transfer allocates risks between different parties, consistent with their capacity to protect against or mitigate the risk. One example of this would be crop insurance.

Risk monitoring is the act of watching projects and the associated risks for changes in the impact of the associated risks.

Risk can affect any combination of performance, cost, and scheduling; therefore, different strategies should be used to address risks based on the way they affect these factors. For example, it might be more important for a company to excellently implement a project than for it to save money in a certain project scenario. The company would likely employ a risk acceptance strategy, temporarily prioritizing risks that affect performance more heavily than cost.

Risk mitigation best practices

Below are some risk mitigation best practices that information security professionals should follow:

• Make sure stakeholders are involved at each step. Stakeholders may be employees, managers, unions, shareholders, or clients. All perspectives are important for developing a comprehensive, holistic risk mitigation strategy.
• Create a strong culture around risk management. This means communicating the values, attitudes, and beliefs surrounding risk and compliance from the top down. It’s important for every employee to have risk awareness, but the probability of a strong culture is greatly improved when management sets the tone.
• Communicate risks as they arise. Risk awareness must be strong throughout the entire organization, so facilitating communication of new, high-impact risks is important to keep everyone up to speed.
• Ensure the risk management policy is clear so employees are able to follow it. Roles and responsibilities should be clearly defined, and each defined risk needs a clear process for dealing with it.
• Continuously monitor possible risks. Risk monitoring practices should also be clearly defined and implemented to continuously improve the risk mitigation plan.

Why should businesses embrace sustainability?

Sustainability is on the cusp of an evolutionary leap. Companies all over the world are beginning to explore more sustainable ways of doing business, primarily considering their long impact on the environment, society, and the economy. Becoming more sustainable may not be easy at first, but business sustainability is more of an opportunity than a threat.

However, sustainability is not just environmentalism. It is a business approach to creating long-term value by considering how a given organization operates in the ecological, social and economic environment. Sustainability is built on the assumption that developing such strategies fosters company longevity.

From a broader perspective, a sustainable business is one whose purpose and actions are equally grounded in financial, environmental, and social concerns.   In the past, businesses were trying to be good corporate citizens, focusing on energy conservation and offering green products and yet this was not central to the business strategy. More recently, many businesses have begun to embrace sustainability and view it as a more integral component of their business strategy (Georgia, 2022).

As the expectations on corporate responsibility increase, and as transparency becomes more prevalent, companies are recognizing the need to act on sustainability as the benefits of being sustainable are becoming well-known (Georgia, 2022).

Some of the major advantages of taking up sustainability in business are:

Reduction of energy usage and waste: Sustainability can shape how key resources like energy, carbon, water, materials, and waste are used throughout the supply chain. Most businesses that start implementing sustainable practices almost immediately notice a reduction in their energy demand and the waste they generate. The development of sustainable business practices can help companies reduce their carbon footprint, become energy efficient, and save overhead costs. Reducing their environmental impact can not only be financially lucrative but can become a great selling point.  

Enhancement of brand image and building customer loyalty: Sustainability can become a key component in buying decisions. Since 2021, customers are more aware than ever of how their buying choices can affect businesses and the difference between climate actions vs. greenwashing. There are likely to buy from companies that are mindful of their impact on society and the environment. Thus, sustainability improves businesses’ brand image and gives them a competitive advantage over competitors.  

Increasing revenue: Sustainable strategies can boost revenues, cut operating costs, and achieve better borrowing rates. The more sustainable a business becomes, the less it pays on its energy bill. Cost savings can be reinvested in additional sustainability efforts to expand a business’s positive impact on the planet.

The attraction of investments and funds: Many financial and investment experts have found that organizations with sustainability plans are likely to attract investors more than those who do not have one. This explains why ESG investing is now very popular.

Increase in employee retention: Sustainable companies are more likely to treat employees as critical stakeholders, increasing employee retention and productivity. Employees want to work in companies that integrate ESG strategies in business processes and thus “do the right thing”.

Increase in the business’s ability to comply with the regulation: Incorporating sustainability into business practices allows companies to comply with regulations and avoid any non-compliance costs.

         How businesses can become sustainable

Businesses can be sustainable in several different ways. Actions that companies can adopt to become sustainable include reducing waste, preventing pollution, adopting clean energy, conserving water, using energy-efficient materials, adopting sustainable business travel policies, caring for employees, collaborating with local suppliers, and recycling and reuse of products are ( Makridou,2022).

A sustainable business should look at the entire life cycle of goods or services and across the whole supply chain, especially if the source materials come from overseas. Best practices related to technologies and innovative policies are advancing the combined use of renewable energy and energy efficiency practices.  Even small businesses can easily scale these practices and implement them in their organizations through a small business sustainability plan.

An environmental management system (EMS) could be used to manage, evaluate, monitor, and report a business’s sustainability performance. An effectively sustainable development strategy requires top-level commitment and It needs to be in line with all stakeholders’ requirements, policies, and action plan.

Decisions made at every level are likely to affect the business’s overall sustainability performance significantly. Understanding and reflecting on stakeholders concerns can lead to a more effective business strategy. Employees, environmental regulators and other organizations can be a beneficial source of ideas and an essential part of executing sustainability plans. Offering training and incentives to employees can also encourage them to adopt the business’s sustainability strategy. Implementing the elements of focus, motivation, commitment, support, and communication linked to a stewardship orientation is also fundamental to achieving higher levels of sustainability performance.

In order to address sustainability appropriately, companies need to bridge two critical gaps. One is the “Knowing-doing gap” which typicallymeans that whereas a business can find sustainability important, it is imperative that sustainability is incorporated in its strategy and business model. The other gap that should be addressed is “The compliance – competitive advantage gap”:  More companies are seeing sustainability as an area of competitive advantage, but it is still a minority. However, all companies need to be compliant. Management should address these topics separately, not mesh them together. Compliance is holistic, a “must do”. For competitive advantage, only a few material issues count. (Knut, 2022)

Companies that stand out in the area of sustainability address both gaps. They have evolved from knowing to doing and from compliance to competitive advantage. They also know the risk of getting this wrong. For instance, promising and not delivering, or addressing material issues without being solid on compliance.

Sustainability is a major challenge, one that matters beyond individual companies. But a reassuring number of large companies are developing forward-thinking sustainability policies. It is really becoming clear that sustainability is a megatrend that simply isn’t going away and should therefore be embraced.