In just seven years Victoria Seeds managed to grow from nothing to one of the largest seed companies in Uganda. The firm produces seeds for numerous crops such as maize, rice, millet, bush bean, pigeon pea and sorghum. Central to the company’s business is empowering smallholder farmers in northern Uganda. How we made it in Africa talks to Josephine Okot, founder and managing director of Victoria Seeds.[hidepost=9][/hidepost]
How did you start Victoria Seeds?
Victoria Seeds was incorporated in 2004. Part of establishing the company was to ensure that the disadvantaged smallholder farmers can access quality seeds. It was challenging, especially in terms of raising start-up capital. Initially I had to get support from a USAID-funded programme – they provided some guarantees to commercial banks, and later we were able to run on our own.
We are very proud of our success because this is an indigenous African company. We started with humble beginnings with only five employees but today we have over 100 employees. Our turnover in terms of seed volumes is 25% of the market. Although we are a small and medium enterprise (SME), we really run our business very professionally and we also take care of our corporate social responsibility by empowering rural women. We don’t just focus on the profitability of our company, but we also focus on developing the communities where we operate.
What have been the major challenges in getting the business up and running?
The biggest challenge for start-ups is access to finance. Banks see agricultural lending as high-risk so short-term and long-term finance was a major challenge. Another challenge was dealing with counterfeit seeds in the market. It becomes difficult to grow a business when there are counterfeit seeds.
We also had to deal with the fact that many farmers lack the knowledge to realise their optimal potential. Even with quality seeds farmers do not realise the yields that they should because of bad farming practices. This leads to low adoption of quality seeds. Countries like Kenya or South Africa have an adoption rate of 50% to 75% of improved quality seeds; in Uganda it is used by fewer than 20% of farmers.
In order for farmers to continue to use improved seed technology, they must have an attractive market for their crops. For example, last year the price of maize in Uganda completely collapsed and farmers decided not to grow maize again. So therefore the seed sales were depressed.
Tell us more about how you empower smallholder farmers.
We empower rural women by providing them with credit in the form of seed loans, input loans and production equipment. We also provide them with the required skills to become commercial farmers. Throughout the growth period their crops are inspected. We also work with the ministry of agriculture to ensure that they get some of the best extension support that a smallholder farmer can get. The post-conflict area of northern Uganda has many female-headed households. We have engaged over 900 farmers in that area in our seed supply chain. Even though they are not directly employed by the company, they are beneficiaries of the company in terms of having an economically productive life.
Who are your main competitors in the Ugandan market?
Multinational seed companies do not have a significant presence in Uganda because the market for hybrid seeds (produced by artificially cross-pollinated plants) is too small. Most farmers use open-pollinated (pollination by insects, birds, wind, or other natural mechanisms) seed varieties. Our competitors are mostly SMEs like ourselves.