ISSD Uganda Newsletter 5

Integrated Seed Sector Development Uganda Programme

Issue 5; September 2015

Inside this issue: Editorial

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Enhancing capacity of Local Seed Businesses in seed ­ treatment and packaging

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ISSD pilots the “Seed Receipt Financing System” among ­Local Seed Businesses 4

Learning and collaborating with strategic actors in the seed sector

By Chris Muwanika, seed expert Proper procedures for seed testing, treatment, labeling, packaging and branding are necessary for improving the competitiveness of Local Seed Bussinesses (LSBs). Learning visits provide opportunities to enhance the knowledge and practices of LSBs and to integrate the experience gained from the visits into their activities.

Turibamwe Mixed Farmers, Kyamulama Mixed Farmers and Kyazanga Farmers’ Cooperative Society LSB participated in a 2-day twining visit that was organized by ISSD. Each LSB comprised of 8 members drawn from the internal quality control, marketing, finance and executive committees. The team visited the national seed laboratory in Kawanda and Nalweyo Seed Company (NASECO) in Kibaale.

In Kawanda, participants had an opportunity to see how seed sampling and testing procedures are carried out. LSBs learned that they do not have to wait for external quality assurance in order to implement appropriate procedures for seed production. page 2 >>

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Making foundation available to seed multipliers

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District leaders sensitized on operationalization of quality assurance system for Quality Declared Seed

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What does being part of an LSB mean in the lives of the individual farmers?

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Vision of ISSD Uganda Through a vibrant and pluralistic seed sector, ensure that quality seed of superior varieties are available and affordable to a larger number of farmers, thereby contributing to agriculture for food security and economic development in Uganda.

ISSD promotes a vibrant, pluralistic and market-oriented seed sector

Editorial

>> from cover page

They also learnt that quality control starts with the seed grower. This implied that LSBs should have internal quality management system in place. External quality assurance should be carried out to check whether seed growers are following the guidelines for seed production.

Mr. Rodeyns Nicolai, the Managing Director of NASECO, advised the LSBs to set long term objectives. He noted that most seed businesses start small and expand with time. He further emphasised that seed business requires considerable amount of initial investment and patience since returns come later.

Welcome to the fifth edition of the ISSD Uganda newsletter. This issue focusses mainly on activities that we do with Local Seed businesses. It provides an insight on what it entails to have LSBs that are professionally organised, technically equipped, market oriented and strategically linked.

Mr. Nicolai summarized his speech by stating that “LSBs should not to be over ambitious, they should not expect quick returns and very huge margins because seed business involves huge costs”. He gave an example of last season, where bean grain was sold at UGX 3,000/= while seed at UGX 3,500/=.

Seed processing, treatment, packaging and branding procedures were elaborated. >>

The two stories shows how LSBs learn from twinning visits with seed companies and the Kawanda lab. The get practical skills in seed treatment and also how to conduct testing seed for germination and purity.

The third article looks at how LSBs can overcome the challenge that seed is grown and harvested in one season while they can only sell seed the next season and thus need to wait for 4 – 6 months before they see income. For local seed businesses to be successful, they need access to foundation seed and external quality assurance from MAAIF.

Mr. Mugisha Julius, the Farm Manager-NASECO, explaining the benefits of Saniham species

The last article highlights what it means for individual farmers to be part of the group.

Enjoy reading the newsletter! Comments are welcome on our twitter:issd_uganda.

Astrid Mastenbroek Chief of Party ISSD Uganda Programme

Participants discussing packaging and branding 2

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ISSD promotes a vibrant, pluralistic and market-oriented seed sector

The LSB members interacted with other farmer groups producing seed on contractual arrangements with NASECO.

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The LSBs learned about Saniham, a nitrogenfixing legume species that suppresses weeds in the field. Ploughing back the legume at flowering stage, results in 40% reduction in fertilizer requirements. At the end of each visit, reflections were held focusing on good practices,

what was done differently in relation to their routine seed business activities, lessons learned among others.

Generally, these learning visits have resulted into formal collaborations with strategic actors in the seed sector. For example, some LSBs are now working closely with breeders. LSBs are also involved in participatory variety selection (PVS). Others LSBs are working with seed companies as out-growers.

Enhancing capacity of Local Seed Businesses in seed ­treatment and packaging

By Geoffrey Otim, seed expert Over the pasts three years, ISSD’s priorities focused on strengthening LSBs towards seed production, quality assurance, access to research and markets among others. As LSBs progressed, volumes of seed produced and sold increased. Postharvest handling therefore became more critical for sustaining these groups.

To support these groups in this regard, a training for the quality assurance and marketing committee of LSBs in the Northern zone was organized in Lira in September 2015. Mr. Omulama Joseph, a seed treatment specialist, Ms. Docus Alum, the Lira District Agricultural Officer and ISSD staff conducted the training.

This training was organized to equip the LSBs with seed treatment and packaging skills as a way of enhancing marketability of LSB seed.

tually affect the quality of seed. Poor quality seed affects post-harvest handling procedures like seed treatment and packaging difficult.

Dorcas Alum, the District Agricultural Officer shared her experience from the field inspection carried out in Obanga Ber LSB. It was important to highlight the link between quality control in the field and after harvest.

Other topics covered were on seed sampling, seed grading, seed testing, seed packaging and seed labelling.

Quality control at field level was one of the topics covered in the training. This was important because citing of fields, use of fertilizer, isolation distance, pest, disease and weed control if done poorly could lead to physical and genetic contamination. This would even-

From the training, it was evident that the perception of farmers with regard to seed treatment was changed.

Previously, farmers in northern Uganda used to think that seed treatment was only possible with the stateof-art equipment afforded by only well-established seed companies. This was confirmed by Etom Pius, a member of the quality assurance committee for Aye Medo Ngeca LSB. He stated that “I used to see treated and packed seed in the market. I could not ­ imagine how big the machines and equipment used ­ were. But after this training, I now have the answer.

As a group, we have the capacity to buy chemicals for seed treatment”.

Participants undergoing training on use of the moisture meter

Etom Pius, practicing use of the heat sealing machine

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ISSD promotes a vibrant, pluralistic and market-oriented seed sector

ISSD pilots the “Seed Receipt Financing System” among Local Seed Businesses

By Patrick Oyee, Deputy Chief of Party Seed Production and marketing in Local Seed Businesses (LSBs) is characterised by inherent cash flow problems. LSBs typically harvest their seed three to four months before the next planting cycle. It is during the planting season that seed is sold. Grain on the other hand can be marketed immediately after harvest.

This leaves LSBs particularly vulnerable with regards to pressing cash requirements. Expenses include among others, purchase of foundation seed, which needs to be done at least a season in advance, payment for other inputs like fertilisers, pesticides and labour. As a result, some LSB members are compelled to sell off their valuable seed as grain in desperation, which yields very low prices. In contrast, if seed is sold at the beginning of the planting period, seed growers get a better price for their seed. In addition, LSB’s sources of finances are locally available SACCO’s, however they are not popular with LSBs because of the interest rates and other associated charges. In addition to this, LSBs often lack collateral which is a requirement to access loans.

To sustain the seed business and meet other individual expenses, a system that ensures LSBs getting the right price for their seed is necessary. In June 2015, ISSD piloted the “Seed Receipt Financing System” to attempt

to address this cashflow issue. The financing system involves provision of loans to LSBs by collaborating SACCOs with seed stocked secured as collateral. Omutima Gwa Ruhiira and Wot Anyim LSBs in Isingiro and Pader district respectively were involved in the pilot project.

ISSD partnered with Ruhiira SACCO in Isingiro and Agaru SACCO in Pader. The SACCOs were convinced to take advantage of this opportunity based on the fact that the pilot project had risk management strategies in place. The new lending product was easily adopted by the boards and management of the two SACCOs. Basic training for the SACCOs on financing procedures and documentation were carried out by ISSD. Participating LSB members were also trained in structured finance, best storage practices, basic risk management, appropriate procedures and documentation.

In the discussions carried out with LSB members, it was agreed that loans offered would be based on the discounted value of seed (grain price_ deposits of individual farmers. The loans should range from UGX 100,000 to 500,000, with a re-payment period of 3 months at an interest rate of 2% per month. Seed deposits would be used as security for payment of the loan. Figure 1 below is a schematic representation of the pilot.

Figure 1: Schematic representation of the Seed Receipt Financing System

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2 Seed received at warehouse by seed r­ eceipt ­committee

Seed produced by LSBs

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5 Seed receipt is presented to finance committee

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SACCO provides loan to finance committee

9 A loan is created against the security of the seed receipt

11 Sales proceeds used to off-set the loan

Seed receipt committee issues a Seed receipt

Seed receipt presented to SACCO and loan is applied

Finance committee discounts (at 75%) the seed receipt and pays the holder

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Balance of sales proceeds given to members

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Marketing committee proceeds to sell the seed

ISSD promotes a vibrant, pluralistic and market-oriented seed sector

Making foundation seed available to seed multipliers

By Bonny Ntare, consultant One of the main bottlenecks in developing a vibrant, pluralistic and market oriented seed sector in Uganda is access to foundation seed (FS). FS is one of the most important requirements for quality seed production.

Seed companies and Local Seed Businesses (LSB) need FS for seed multiplication.

Currently, the National Agricultural Research Institutes (NARIs) under the National Agricultural Research Organisation (NARO) are the main source of foundation seed. However, due to financial challenges and limited facilities for FS production and conditioning, the NARIs are unable to satisfy the demand for FS. ISSD organized a meeting in June 2015 in Kampala to address the challenges stated above. The meeting was attended by crop breeders from NARO and staff from FICA Seeds and Makerere University. In total, 18 participants attended the meeting. In the meeting, a pilot project to test the concept of producing FS as a business by the ZARDIs was proposed and agreed upon.

ISSD Uganda engaged Abi and Ngetta Zonal Agricultural Research and Development Institutes (ZARDI) to evaluate the feasibility of establishing market-oriented FS businesses for some commercially viable crops.

Abi ZARDI selected potatoes and sesame. Sesame is an emerging and important crop with high export potential. In addition to this, much of sesame grain produced in the country is planted with re-cycled grain, which leads to low yields.

Potato is also becoming a commercial crop in West Nile region and grows well in Zombo district. Because of this, varietal purity and crop quality should be main-

tained. By doing so, demand for certified or QDS is created and hence the need for foundation seed.

Abi ZARDI prepared the “Business Model Canvas” (BMC) with focus on the value proposition of the proposed business. Customers, partners, activities, cost structure and revenue streams were included in the BMC. ISSD organised a one day training session for Abi ZARDI scientists as a follow-up to the developed BMC. The purpose of the training was to offer technical support in developing business plans for selected crops. The technical support focused on analysing the economic and financial data underlying the business plan for producing foundation seed as a business. The target for the ZARDI is to generate enough FS to allow coverage of the estimated market with an additional cycle of seed production.

Under this pilot, Abi-ZARDI proposes to produce: 1 45 tons of sesame FS which will be planted on 11,250 acres. At an average yield of 500 kgs per acre, 11,250 acres will produce approximately 5,625 tons of QDS. 2 294 tons of potato FS that will be planted on 367.5 acres. At an average yield 3200 kgs per acre, approximately 1,176 tons of QDS will be produced.

ISSD and NARO strongly believe that the pilot for FS production as a business with Abi ZARDIs is an important endeavor. If it is successful, it will contribute greatly to seed sector development in Uganda, especially for the LSBs, individual seed producers and farmer cooperatives.

However, foundation seed production can only be successful if there is sincere cooperative engagement with the certified or QDS producers or seed companies to establish long-term relationships.

District leaders sensitized on operationalization of quality assurance system for Quality Declared Seed

By Christine Kawuma Menya, project and ­partnership officer

packed QDS using the tamper proof labels released from MAAIF (figure 2 shows a sample QDS label).

ISSD in collaboration with the Ministry of Animal Industry and Fisheries (MAAIF) initiated a pilot project to operationalize the quality assurance system of Quality Declared Seed (QDS). Under this, MAAIF delegates the District Agricultural Officers to perform the role of inspectors in quality assurance in seed production during field inspection. The LSBs will market

To kick-start this project, ISSD organized a one day awareness raising workshop for district officials and local council representatives from in the three zones that ISSD is operating in. The objectives of the workshop were to create awareness on QDS and Local Seed Businesses (LSBs) in the region and to jointly develop strategies that will support implementation of quality assurance system for QDS.

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ISSD promotes a vibrant, pluralistic and market-oriented seed sector

With regard to implementation of the pilot, participants proposed that participating local governments should do the following: 1 Include quality assurance for QDS activities in their work plan.

2 Create budget lines to support field inspection by DAOs. 3 Recruit agricultural extension staff to fill the staff gap in local government 4 Create community awareness on availability of QDS. 5 Promote processes that will lead to the review and update of the memorandum of understanding targeting the seed sector.

6 In collaboration with MAAIF, train selected local government technical staff in quality seed production.

The table below is a summary of challenges foreseen in implementation of the pilot and proposed recommendations to address the challenges.

Tamper proof labels released from MAAIF

>> Participants included the District Secretaries for Production, Chief Administrative Officers, District Agricultural Officers (DAO), Production Coordinators and the Local Council Chairpersons (LCV).

The workshop for Lango region was held in Lira in August 2015. In total, 46 participants (39 males and 7 females attended the workshop.

Dr. Laban Turyagenda, the Director Ngetta ZARDI highlighted the significance of using quality seed in agricultural production during his welcoming remarks. He elaborated on ISSD and Ngetta ZARDI’s collaboration in promoting quality seed production for the local communities.

Challenges

Proposed recommendation

Poor professional ­ ethics among ­inspecting teams

•M AAIF should closely ­supervise field inspection

DAOs have limited knowledge and skills on quality assurance for QDS

•B uild capacity of staff through trainings

Financial limitations of the local Governments

•M obilise resources internall • Mobilise resources from ­development partners

Some leaders have a negative mindset about QDS

•D istrict production department should carry out ­sensitization and campaigns to promote QDS at district and community level

Table 1: Challenges and proposed ­recommendations

Hon. Ojuka Anthony, the LCV Chairperson Lira district officially opened the workshop. He emphasized the need for local government leaders to change their attitude towards attending similar workshops, by focusing more on sharing ideas for developing the seed sector in the region.

Among the activities that took place included: 1 Presentations on the current status of the Uganda’s seed sector, challenges faced and interventions by ISSD Uganda.

2 Experiences from quality assurance system for QDS ­pilot.

3 Development of strategies for decentralizing quality assurance mechanisms for QDS Seed.

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ISSD promotes a vibrant, pluralistic and market-oriented seed sector

What does being part of an LSB mean to the lives of the individual farmers?

By Jenny Lang, Intern Agieramach women Local Seed Business (LSB) was founded in 2005 primarily to solve community’s problems related to unsafe water and high illiteracy level.

By the time ISSD started working with the group, it had already gained some experience in seed production from other development programs. Under the previous programs, foundation seed (FS) was supplied free of charge. This was contrary to ISSD’s approach, where LSB are expected to acquire their own FS at their cost, but can gain knowledge from ISSD free of charge.

Discussions held with LSB members revealed that ISSD trained members in various aspects of quality seed production, marketing, processing, entrepreneurship, gender and value addition. The knowledge gained from ISSD training was utilized during the course of LSB related work, as well as in their day-to-day work.

Some members of the group, for example, Onwang Martin acknowledged that they had greatly benefitted from ISSD, especially through training and attribute how far they had reached to ISSD. Anna Odubi, a female member said that through her engagement in the LSB, she learned how to think in a business oriented manner. She further stated that she used the money from the seed sales to invest in other business activities.

Ayio Nakis, another female member, stated that “I bought a pig using profits I got from sale of bean seed.

The pig gave birth to piglets, because of this, I am now a pig supplier!”. A male member invested money he earned from seed production towards construction of a commercial building in town. Income from renting the commercial building is used to pay fees for his children.

Two other ladies where able to improve their living conditions by building permanent houses. He stated that “I was living in a one roomed small hut, with the bedroom doubling as a kitchen. I was able to build three brick houses after selling my seed. One of houses is a kitchen, the other is a bedroom. The third house is for visitors. I am very happy!”.

Agieramach LSB has an internal loan and savings scheme. The scheme has made the group independent of external credit. The chairperson of the group for example made use of this scheme to finance the construction of her permanent house. She re-paid the loan with interest from the income she made through seed sales. She also managed to open an input store in the village. This shop saves farmers the time and money spent travelling to and from town while buying agricultural inputs. The shop is also used to sell some LSB seed.

The story indicates that the ISSD approach, if taken up by pro-active and dedicated groups, can contribute to the development of individual farmers. It also shows that the approach has the capacity to contribute to food security within rural communities by equipping the participating farmers with the knowledge and skills to increase their household income.

Jenny Lang, the writer (standing forth from left) with members of the ­Agieramach LSB

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ISSD promotes a vibrant, pluralistic and market-oriented seed sector

Published by: The Integrated Seed Sector Development Uganda Programme, Studio House, Plot 5 Bandali Rise, Bugolobi, P.O. Box 20106, Kampala, Tel: +256 775 968 005, Email: Info@ISSDuganda.org Editorial Committee: Astrid Mastenbroek – Chief of Party; Roland Mugumya – Monitoring, Evaluation and Communications Coordinator All photos from ISSD Uganda projects.

The newsletter will be available on www.issduganda.org Disclaimer: This newsletter is produced with the assistance of the Embassy of the Kingdom of the Netherlands funding to Wageningen UR Center for Development Innovation (CDI) for the implementation of the ISSD Uganda programme. The project is implemented in collaboration with NARO. The contents are the sole responsibility of ISSD Uganda and can in no way be taken to reflect the views of the embassy of the Kingdom of the Netherlands.

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