Open Sesame: A Value Chain Analysis of Sesame Marketing in Northern Uganda. Socioeconomics Discussion Paper Series 6

Munyua, B and Orr, A and Okwadi, J (2013) Open Sesame: A Value Chain Analysis of Sesame Marketing in Northern Uganda. Socioeconomics Discussion Paper Series 6. [Socioeconomics Discussion Paper Series]

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Abstract

Uganda is the world’s fifth largest producer of sesame. The northern and eastern regions are the main centres of production. Almost all the sample farmers had grown sesame in the two crop-growing seasons in 2009-2010. The mean area planted to sesame was 0.37 ha across the two seasons, and the mean production was 222 kilograms per household. On average 77 % of the sesame produced reached the market with each household selling 173 kilograms. Gross income from improved varieties produced for grain averaged $ US 282 per household or $ US 56 per head assuming a family of five. This represented an additional $ US 92 per household or $ US 18 per head over the corresponding income from local varieties of sesame. These results suggest that sesame can make a significant contribution to household income in the Northern Region. The challenges to sesame production at the farm level include: lack of equipment for land preparation, which leads to late planting; crop losses from pests and diseases, which reduces yields; non-availability of seed; and labor, particularly for weeding the crop which is sown broadcast. Smallholders produce small amounts, their bargaining power is weak and prices are low. A sesame value chain map was developed showing the volume handled by the various actors along the chain as the commodity moves from farm gate to the consumers and export markets. The study found that, of the total sesame produced, 77 % is sold. Of the total sesame produced, 42 % is exported, 10 % is sold to urban consumers, and 25 % is sold to rural consumers. Therefore, only half of the sesame that is produced leaves the production regions to regional and export markets. The market structure involves numerous traders, which reduces the farmer’s share of the final price. On average, the farmer receives 70 % of the ex-local assembly level price and 60 % of the ex-regional level price. Thus, if farmer were to sell collectively at regional level there is potential for a 10 percent increase in prices compared selling at the farm gate. Traders reported the most important traits were grain color (86%), cleaned grains (71%) and percentage of foreign matter (54%). Traders preferred white colored grains when buying sesame. Sesame II, an improved variety promoted by this project, is white in color and therefore has high market demand. Nonetheless, traders did not report rejection based on grain color. The majority of traders had no shape preference in either buying or selling. Interviews with traders indicated that buyers were satisfied with quality of sesame on offer and 80 % reported that the quality of sesame in the market was improving. Unlike traders, exporters and rural assemblers gave a higher priority to cleanliness. The problem of cleanliness of arises during the shelling and drying stages of sesame harvesting. Most farmers thresh and dry sesame on the bare ground, this leads to unclean sesame grains since sesame becomes mixed with soil. Uganda is the world’s sixteenth largest exporter, by volume. All sesame exports from Uganda are as raw seed rather than oil and other processed products. The three major export markets are Europe (Austria, Denmark, Germany and Switzerland), the Middle East (Turkey, Egypt and United Arab Emirates) and the Far East (Singapore, Japan and China). Sesame exported to Europe and the Middle East is used primarily for the cuisine and confectionery industry while exports to the Far East are used primarily for extracting sesame oil. Access to the European market has stringent certification and standardization requirements. Europe pays the highest value per unit for Uganda sesame, but accounts for only a small share of the total volume of exports. Most Uganda sesame is exported to the United Arab Emirates and China which pay the third lowest and the second lowest prices, respectively. Targeting the European market will increase the average unit price of exported sesame and the total value of exports. However,ICRISAT - Socioeconomics Discussion Paper Series ii markets in the Far-East and China do not discriminate based on quality and have little if any requirements for entry. Consequently, farmer and traders have no incentive to invest in practices that will increase eligibility of sesame for access to higher value markets. Only one Ugandan firm (Shares Uganda) exports organically certified sesame creating a niche market and receiving premium prices. However, the distinction between organic and conventional sesame is unclear since few if any growers use inorganic chemicals in sesame production. Shares Uganda had invested in forming producer groups and increased the traceability of producers, as well as investing in mechanized cleaning and sterilization equipment. However, at local and regional levels no difference was found between the price of conventional and organic sesame.

Item Type: Socioeconomics Discussion Paper Series
Divisions: UNSPECIFIED
CRPS: UNSPECIFIED
Series Name: Socioeconomics Discussion Paper Series 6
Uncontrolled Keywords: Sesame, Sesame production, Sesame Marketing, Uganda
Subjects: Others > Agriculture-Farming, Production, Technology, Economics
Depositing User: Mr Sanat Kumar Behera
Date Deposited: 12 Sep 2013 04:08
Last Modified: 30 Oct 2015 07:48
URI: http://oar.icrisat.org/id/eprint/7095
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