Market Assessment

A Value Chain Analysis of the Dry Bean Sub-sector in Uganda, UNDP, 2012

    Description
    In the East African Community (EAC) Region, Uganda is ranked second to Tanzania in the production of common beans (Phaseolus Vulgaris). Beans provide 25% of the total dietary calorie intake and 45% of the protein intake in Uganda. Given the importance of beans, this study seeks to understand what the situation of the bean sub-sector in the country is in terms of production, marketing and consumption and also map the different actors in the bean value chain.

    Methods for info gathering
    The study was conducted in 17 districts of Uganda and primary and secondary data were used. Purposive sampling was used to select the districts to be included in the study. The choice of the districts was guided by a criteria focusing on: a) districts where the production of beans is significant by volume, b) where there is significant trade of beans and/or beans products, and c) areas where the consumption of beans by volume is significantly high to provide attractive markets.

    Summary of results
    Among the producer groups interviewed in the study,the average land size under beans production ranged from 0.1 ha to 4 ha with an average of 0.4 hectares per household. The main bean varieties were the Nambale short which is grown by 19% of the farmers, while Kanyebwa and yellow varieties are each grown by 15% of the farmers. Different bean varieties fetch different prices at the market. The highly priced beans in the country are the yellow beans and K131. Uganda is a net exporter of beans. However, the country exports only about 20% of what is produced implying most of the beans are traded and consumed locally.

    The bean value chain consists of input suppliers, producers, villager assemblers/ middlemen, traders, processors and consumers. The producers sell approximately 69% of the beans to village collectors and brokers and 5% to institutional buyers like schools and WFP. The remaining 26% is retained for home consumptions and seed. Village collectors then sell all their beans to traders which include big traders in major trading towns. Thereafter, the big traders transport the beans to mass markets, institutional buyers, urban traders or exporters. Urban traders then sell to institutions or export to Kenya, South Sudan, Rwanda, DRC and Burundi.

    There are very few bean processors in the country. These processors utilize about 1% of the total dry beans to process bean flour.

    Analysis of the dry bean value chain pricing shows that the wholesalers buy dry beans at an average price of UGX 1,400/Kg from the village collectors and sell at an average price of UGX 1,547/Kg to the retailers. This means that there is a price difference of UGX 147/Kg. To calculate the different shares of value that is price distribution along the value chain, the price margins obtained by each player were expressed as a ratio of the retail price. The actors’ share of value was: wholesalers’ (9%), village collectors (11%), and producers (66%). In the bean flour value sub-chain, the final consumer price was UGX 8,000/Kg. The processors (especially in the case of Nutreal) receive 48%, retailers receive 25%, while open market traders receive 27% of the final price paid by the consumer.

    The margin reported by the producers of the dry bean was UGX 348/Kg. Village collectors reported UGX 50/Kg while wholesalers and retailers reported margins of UGX 27/Kg and UGX 224/Kg respectively. The total gross value added for the whole chain was UGX 649/ Kg of beans. Expressed as a percentage of the consumer price, the bulk (54%) of the gross value added went to producers, 35% to retailers, 8% to village collectors and only 4% to wholesalers.

    The bean value chain has intra-linkages between the micro level bean value chain actors (producers, collectors, processor and retailers) and inter linkages between the micro level actors and meso level actors such as input providers and financial service providers and macro level actors (government agencies and development agencies). The linkages are either horizontal or vertical and the strength/weaknesses of these linkages influence the operation of the chain. The government does not have specific policies targeting the bean sub-sector but there are several policies for the agricultural sector of which beans are a priority.

    The proposed short term interventions would be designed to enhance already existing strengths within the beans value chain in Uganda and would include expansion of the utilisation of proven technologies. The focus should be on facilitating the development of proper seed system and utilization of commercially viable technologies and practices for postharvest handling and primary processing to support delivery of the desired quality of beans and bean-food-products. The study recommends a number of specific interventions in this regard. Additional medium and long term interventions are also suggested.