COFFEE BUSINESS Vs EUCALYPTUS/PINE TREES COFFEE Vs RENTAL BUSINESS
By Chris Mugasha
Sometimes some people find themselves at cross-roads and stranded with which enterprises to take on especially in agriculture.
In this article we focus on coffee Vs Eucalyptus/Pine and coffee Vs rental business.
According to Yowasi Muhereza the Uganda Coffee Development Authority (UCDA) extension officer in-charge of Rukiga and Kabale in Kigezi region, unlike crops like eucalyptus and pine trees which take about five-eight years to get harvested, coffee will take about three years.
“With coffee farming, every after six months you harvest while with eucalyptus trees you harvest once and wait for other eight years while for pine trees you harvest once and it ends there,” Muhereza notes while addressing coffee farmers of Kamwezi sub county in Rukiga district during a coffee training session at Kamwezi coffee factory.
Other analysts compare coffee with rental business;
Cost of land in a good area 50x100ft is 30Millions
Cost of constructing 4 standard double room units 85Millions. Total is 110Millions
Average Returns on investment per month is about Ugx 900K monthly thus Ugx 10.8Millions per year and….
Average Returns after 5years will be Ugx 54Millions!
Assuming you have 30Millions at your disposal:
You can buy 4 acres of land in a remote area, each at 5Millions. That’s 20Millions.
1 acre of land accommodates about 450
coffee seedlings if we consider standard spacing of 10ftx10ft.
If each clone/cutting is bought at Ugx 1,500, you will need Ugx 2,700,000 for all the 4 acres.
Preparing the garden will cost Ugx 150,000 per acre. That’s a total of Ugx 600,000 for all the 4 acres.
Digging holes (pitting) & planting. Each hole will cost Ugx 500. That makes Ugx 225,0000 per acre and Ugx 900,000 for all the 4 acres.
Manure application. 3 Elfs per acre per year. That’s 12 Elfs for 4 acres in a year. Each Elf costs about Ugx 80,000. That’s Ugx 960,000 for all the 4 acres in one year. Thus Ugx 1,920,000 in 2 years when your coffee starts giving maximum yields.
Intercrop it with beans, pumpkins, banana plantation (not more than 305 plants) etc to help you pay the 2-4 employees in those 2 years. PLUS other Miscellaneous costs sh 3,880,000
That’s a total of 30Millions invested!
Good quality and well managed coffee clones can start yielding very well in the 2nd year after planting.
Each acre can yield 9Millions per season thus 18Millions annually.
18Millionsx4Acres=72Millions annually (per year).
Even if you calculate only 5years, your 4 acres will generate 360Millions!
Remember the yields keep on increasing as per the age of the coffee plant.
Each annual earning of 72Millions anually from 4 acres of coffee can be enough for you to acquire the best rental units in the area of your preference.
Remember the farmer will have extra large surface of land for future use like forestry, fish farming, piggery, poultry or even selling plots when the value appreciates unlike the rental investor whose land will be all occupied.
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