Uganda was one of three intervention countries of CASA’s value chains programme, where activities were designed to support SME agri-businesses. Within the programme, Uganda had two priority crops: beans and sesame. In the bean sector CASA wanted to explore commercial opportunities with potential to minimise carbon emissions and improve soil health for sustainable crop production. This is what we did…
Bean sector partnerships
The Bean Sector Strategy, produced by CASA in April 2020, noted that Ugandans consume approximately 10 kg of beans per person each year, because they are a relatively cheap source of protein.
Beans have the ability to fix nitrogen in the soil thereby reducing soil degradation, which is a key concern of sustainable agriculture. However, cooking beans in homes and institutional settings, such as schools, mainly uses charcoal or wood which is associated with greenhouse gas emissions. This shows the need to understand the environmental impact of a crop all along the value chain.
The strategy paper recognised opportunities for value-addition through the production of pre-cooked beans by SMEs. Pre-cooked beans could then be supplied to both the domestic and export markets, which would reduce the need for home cooking and therefore use less charcoal or wood fuel.
Critically, the paper noted that many SMEs face challenges accessing commercial finance to exploit such opportunities. CASA Uganda was able to help unlock commercial finance for sound businesses.
| The CASA Uganda programme ran for 18 months in that time it delivered on all 3 commitments in its bean sector strategy: Commitment 1: To increase aggregation of quality beans for commercial markets. 18,615 smallholders were supported Commitment 2: To support SME growth and expansion, 1,700 farmers have been contracted by the SME CEDO, one of CASA’s partners, to produce and aggregate the right variety of bean for pre-cooking Commitment 3: To improve the business environment for inclusive sector growth, 46,290 smallholders (bean and sesame growers) were moved closer to financial inclusion These approaches are explained below. |
Increase aggregation of quality beans for commercial markets
Partners: Manyakakabi Area Cooperative Enterprise, Nyakyera Agricultural Cooperative Enterprise, Green Firm Africa, Community Enterprises Development Organisation and The Grain Council of Uganda
Smallholders supported to increase production of quality beans entering formal markets: 18,615
CASA supported bean sector partners to crowd-in more farmers to their supply chains and improve aggregation processes. 18,615 smallholder farmers were brought into the SMEs’ supply chains, which increased the aggregated beans volumes by an additional 1,018 metric tonnes, worth £425,970, directly going to smallholder farmers per harvest cycle. This equates to around £1 a week per farming household.
Support SME growth and expansion: Securing £125,000 finance for Manyakabi
Partners: Manyakabi Area Cooperative
Smallholders impacted: tbc
CASA Uganda’s second priority was to enhance the investability of the partners. Often companies fail to attract the funds they need because they do not have sufficient records to support their business case. This was the case with the producer-led association, Manyakabi. They wanted more working capital so they could procure, aggregate, clean, package and store beans. Funding would also allow the promotion of drought tolerant and early maturing bean varieties.
In 2016, Manyakabi made its first loan application to the Uganda Development Bank (UDB), but the loan was rejected. Banks consider producer organisations high risk, so they required collateral and wanted to see up to date sales records. The association could not provide either. The organisations struggled on with limited working capital.
In early 2021, CASA Uganda provided support to Manyakabi to improve the management of the association, including their book keeping capacity and practices, to meet the stringent requirements of commercial lenders. Following their training, Manyakabi applied for a working capital loan of £125,000, which this time was approved and disbursed by UDB. The loan has so far enabled Manyakabi to source and aggregate an additional 500 MT of beans from smallholder farmers to meet the increasing market demand. In late 2021, CASA Uganda will be reporting on the number of smallholder farmers reached and the impact of this work in terms of changes in farmer behaviour and income.
Manyakabi had approached Uganda Development Bank (UDB) in 2016 for a trade loan of £62,000, but the bank required directors to deposit their personal land titles besides other stringent requirements. Commercial banks consider the risk of lending to producer associations to be high due to; a perceived lack of professionalism, lack of collateral and poor or non-existent records.
“Manyakabi had approached Uganda Development Bank (UDB) in 2016 for a trade loan of £62,000, but the bank required directors to deposit their personal land titles besides other stringent requirements. Commercial banks consider the risk of lending to producer associations to be high due to; a perceived lack of professionalism, lack of collateral and poor or non-existent records.
CASA provided advisory and mentoring services to us to revive the loan application and address these concerns. Then on 28 May 2021 we applied for another loan of £125,000 from the UDB; this time we were able to present financial records and cash flows which we lacked during the first application.
June 2021, the loan was approved (and without the need for collateral); we were then able to use the loan to procure & aggregate additional 500 MT of beans from smallholder farmers in the last harvest season.”
– Clare, Manyakabi managing director
Support SME growth and expansion: Pre-cooked beans develop new markets and reduce deforestation in Uganda
Partner: Community Enterprises Development Organisation (CEDO) an agro-enterprise development organisation that seeks to strengthen the production, marketing and sale of agricultural commodities by smallholder farmers
Smallholders impacted: 1,700
Beans are the most important source of protein for low- and middle-income households in Uganda. They are also important for institutional caterers such as schools, hospitals and prisons.
Consumption of beans is constrained by the amount of energy, water and time required in their preparation. The burden of cooking beans and collecting firewood or charcoal falls mainly to women. The reliance on charcoal and firewood means that the process also has a large carbon footprint when burnt and its collection also accelerates deforestation and land degradation.
| Cooking dried beans from scratch Even with the introduction of more efficient stoves, there is a heavy burden associated with cooking a basic meal based on beans, including collecting water and fuel. Estimates vary for the time taken to collect wood, but it can take up to 6 hours a day in rural households. One survey from Uganda showed an average family consumed about 12 kg of beans per month, requiring around 288 kg of charcoal per year to cook them. That equates to around 864 kg of wood per year. Dried beans need to be washed several times and then soaked for a minimum of 4 hours before cooking. Cooking time over a fire is between 90 minutes and 2 hours and the cooking pot needs constant topping up with hot water (cold water stops the beans softening) and many cooks also add sodium bicarbonate, which breaks down natural pectin, softens the beans and reduces cooking time. All this means women have to stay close to the kitchen, limiting their time for other economic or domestic tasks. Moving to pre-cooked beans reduces the cooking process from approximately 6-hours to just a few minutes. Once precooked, families only need to add water and cook the beans for 10–15 minutes, an almost 90% reduction in cooking time. The development of pre-cooking usually involves improvement to the nutritional content of the beans, through the selection of biofortified varieties. |
Traditionally there is little value addition in beans in Uganda except for primary processing – cleaning, sorting and packaging. However, a market is emerging for pre-cooked beans. This is a result of a rapidly expanding urban populations with rising incomes, limited time for meal preparation, and high energy costs in urban areas.[1]
This emerging market presented an opportunity for value addition that our partner was eager to grasp. It also presented an opportunity to improve access to cheap protein that will improve diets while also having a positive impact on the environment. Furthermore, it was anticipated that the uptake of the product would increase the sale of beans, offering a sustainable market for bean farmers.
CASA Uganda partnered with CEDO to support the commercial production, marketing and sale of pre-cooked beans. The process entails processing dry bean grains under high temperature and pressure to produce a transformed beans product requiring far less cooking time by the end user.
The successful production of pre-cooked beans requires interventions along the entire bean value chain; including substantial investment in product development and testing and documenting of all findings to design an effective business model.
Initial market research suggests that the advantages of pre-cooked beans will result in increased demand for beans, especially in urban areas. Because of the varieties selected for pre-cooking, which are more nutrient-rich, there is also an opportunity to improve the diet of Ugandan households.
This appears to be a win for consumers, farmers, and the environment. However, CASA has not been able to find a full environmental impact assessment which fully evaluates the environmental impact of pre-cooked beans. The assumption is that industrial processing will use cleaner fuel than wood burning in the household and also be more efficient per unit of production. There are additional packaging and distribution considerations which further complicate the calculation. These issues help to demonstrate the complexity of trying to work to the highest environmental standards.
CEDO trained 1,700 smallholder farmers as producers and bulkers of the best varieties for pre-cooked beans. The company is currently working on the packaging and marketing prototypes in preparation of the roll out of canned beans in Uganda.
Improving the business environment for inclusive sector growth: Enhancing smallholder access to finance
Partners: Axiom, Century and Standard Bank
Smallholders impacted: 46,290
CASA engaged with Axiom zorn (a Ugandan IT development company) to support the partners in the beans and sesame sectors to geospatially map their farmers in their supply chain and improve service delivery plans, product aggregation and ultimately enhance smallholders’ access to finance.
46,290 farmers were profiled with numerous data points on each farmer collected to support the generation of credit scores. Through this exercise, Axiom zorn hopes to capitalise on its established partnerships with Century and Standard Bank and extend credit to these beans and sesame businesses as well as the smallholder farmers supplying the SMEs.
The CASA Uganda programme was implemented by NIRAS Africa. CASA will be revisiting all these stories as we have more impact data.
Additional Information:
Cover photo: ©2009 CIAT/Neil Palmer
[1] The study on “Consumer demand heterogeneity and valuation of value added pulse products. A case of precooked beans in Uganda was conducted in 2014 and another study was conducted by Kilimo Trust in 2018 under Regional East African Community Trade in Staples-II (REACTS-II) project