Business idea – Coffee production

Coffee is one of our largest exports in Uganda. The most common varieties are Robusta and Arabica coffee. A coffee tree can remain productive for more than 30 years. Under intensive production you can plant 1,300 trees per acre. This will yield about 3 tonnes or more of beans per year. The total revenue from an acre with some value addition is about ugx 10 million per year. So if you have 10 acres of a well maintained plantation you can gross about ugx 100 million in revenues per year for the next 30 plus years. Our financial models show that a coffee project has an internal rate of return of over 20% with a positive net present value.

The main capital costs are the land and plantation development including seedlings, land clearance, irrigation, farm housing, pit latrine and storage/drying costs, facilities, etc. Capital costs are usually a one off cost. The main operational costs include labour, manure, fertilizer, fuel for irrigation, and pesticides. The costs will vary depend on location, suppliers, quality and quantities of inputs, etc.

The key risks are theft, crop failure, pests, weather, market failure, and poor management. These can be managed through a comprehensive risk management strategy and good crop management practices for the project.

There is a lot of support for new producers among the farming communities and government. A lot of information can be obtained online and from the coffee development authority (https://www.ugandacoffee.go.ug/)

If you have some idle land then coffee production is definitely something to consider.

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