Capital Flows In The Financial System And Supply Of Credit Pig Farming in Uganda, Haraam or Hidden Pearl?

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Pig Farming in Uganda, Haraam or Hidden Pearl?

Religious sensitivities must be kept in mind when considering this business for investment, especially since about 12% of Uganda’s population of 35 million are Muslim. That’s about 4.3 million people and is therefore quite significant, as it would be almost haraam (loosely translated means taboo or “forbidden” in Arabic) to start this business in a neighborhood that has a significant Muslim population, like say Mbale – my hometown.

On the subject of religion, it is worth remembering that Matthew 7:6 says; “don’t throw your pearls to swine. If you do, they may trample them underfoot, and then turn and tear you to pieces.”

I recently invested in a 50/50 joint venture with a family friend to start a piggery project in Mbale. I provided the initial working capital and he provided the land and apartment. I’m still not sure if I threw away my pearls (i.e. money) as it’s been over 1 month and still no sign of progress on the project in the form of photos or a progress report. His phone is switched off and I have no other way to contact him.

Reminds me of another farmer friend I spoke to recently. Someone broke into her farm in Jinja and ran off with 3 full grown pigs, squealing and everything I can imagine. Her security guard told her that he was drunk at the time and that’s why he didn’t hear anything. However, I believe they (pigs) were stolen in collusion with the security guard because; firstly, an adult pig weighs around 120 kg and secondly, they can squeal so loudly at, say, 130 dB. For ease of representation, this is considered higher than the maximum safe level for hearing (120 dB). Other sources compare the squeal of a frightened pig to the noise level of an airplane taking off, i.e. 113 dB. Either way, it’s pretty loud.

So it’s hard to understand how these 3 grown pigs were stolen without the guard batting an eye, drunk or not.

The first rule of thumb when starting this business in Uganda is to make sure you have reliable business partners or employees, otherwise you will lose your “pearls” to pigs (literally).

There are other aspects to consider before investing in this sector.

MINIMUM FIRST

1. Feeding

Pigs eat huge amounts. A fully grown pig, especially one raised for commercial purposes, eats about 3.4 kg per day. A growing one eats 2.02 kg on average. If you are buying animal feed that consists mainly of maize meal, the cost will be considerable, especially with the steadily increasing prices of maize in Uganda (due to the drought). You have two options to combat these high costs:

  • Option 1: Grow your own food ie. corn and vegetables to feed them and supplement this with protein (say fish or soy meal).
  • Option 2: Make sure the farm is located near a major boarding school and/or hotel/restaurant so you can pay next to nothing for “sinks” ie. leftovers such as maize/maize grits (called “Posho” in local parlance) and beans from school (maize grits and beans are staples in boarding schools in Uganda and are therefore readily available). You can then supplement the corn and bean meal with leftover protein meals such as chicken or beef from hotels/restaurants. Another alternative but cheap source of protein is the Dagaa/Omena fish (called “mukene” in the local language). Pigs are omnivores after all and will literally eat anything (but don’t feed them rotten food).

2. Cash flow/working capital

As with most farming-related activities, especially in Uganda, you need to have cash on hand and especially at least 11 months (the growing and gestation period for pigs) before you start making money selling pigs. This is especially crucial as there are no advanced credit cards and it is difficult to get agricultural loans in Uganda, especially without insurance.

3. Diseases

Pigs are susceptible to several diseases and it is not uncommon for the government to quarantine entire areas after disease outbreaks such as the deadly African swine fever. That’s why it’s crucial to make an appointment with a vet as part of the boot to be available for scheduled vaccinations, routine check-ups and emergencies. The government program under the NAADS scheme can help provide free/subsidized veterinary services, but I recommend a private contract to ensure regularity as sometimes civil servants in Uganda are not reliable.

4. Water source.

Pigs do not have sweat glands, so they need water (or a “mud bath”) to cool down. You also need water to clean their pens and feeding areas, especially as their population increases – and quickly! That’s why it’s crucial to have plenty of water. That’s why I’m in favor of placing the farm near an easy water source, such as a swamp, or installing a water tank to collect rainwater. These are the cheapest and most efficient options in Uganda compared to piped water supply from NWSC water supply company.

AND NOW THE PROFESSIONALS

1. Less intensive management.

As long as you invest in good housing that, for example, properly separates lactating sows from others, has separate feeding and sleeping areas, etc., you can easily manage a piggery with little staff on a small amount of land.

2. Profitability due to demand.

Many sources consider this sector to be one of the most profitable ventures in livestock farming, especially as it requires less intensive management compared to poultry or dairy farming. Profitability in Uganda is due to the high demand for pork.

According to the 2008 Livestock Census by the Uganda Bureau of Statistics, there were just over 3.1 million pigs. Assuming growth rates since then based on economic growth (real GDP) of approximately 7.2% in 2009, 5.20% in 2010 and 6.4% in 2011, the pig population in 2012 is estimated at 4.3 million. This is still a very small number, especially compared to, say, chickens, which according to the same census in 2008 were over 37 million and therefore estimated (on the same basis of GDP growth) to be 44 million in 2012.

I can expect that the demand for pork will still exist and that other related industries for pork products such as sausages, bacon, gammon and the like will eventually develop, especially as the income levels of the population increase (due to economic growth).

Based on the analysis of the model I developed, I summarize the profitability for this sector as follows:

Return on capital

  • Start-up capital (including working capital for 11 months) (A): Shs. 7,738,248
  • Profit per annum (B): Shs. 2,681,086
  • Return on Investment/Capital (years to return capital) (A/(B): 2.886 years.

*Profit is calculated for a 14-month period consisting of Seasons 1 and 2.

It should be noted that the initial investment/start-up capital will continue to be returned in Season 3 onwards as the season 1 and season 2 piglets mature.

A final word

Given the relatively quick return on investment, this is definitely a sector worth looking at.

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