Income and employment generation potential of Uganda’s sericulture industry: An economic analysis

Introduction

Sericulture, the integrated practice of mulberry cultivation, silkworm rearing, and silk reeling, is a labor-intensive agrobased cottage industry that has significant socio-economic potential, particularly in rural areas. In Uganda, sericulture has emerged as a viable economic activity, offering numerous opportunities for employment and income generation. With its low capital investment requirements, short gestation period, and high return on investment, sericulture has proven to be a sustainable livelihood for rural communities in several parts of the country (Sharma & Kapoor, 2020; Eswarappa, 2009) [14,5] . The practice not only contributes to household incomes but also promotes rural development through the creation of various jobs, including those in silkworm rearing, cocoon production, and silk processing (Dasar et al., 2021) [4] . Globally, four main types of silkworms are reared for silk production: the mulberry silkworm (Bombyx mori), Eri silkworm (Philosamia ricini), Tassar silkworm (Antheraea mylitta), and Muga silkworm (Antheraea assamensis) (Malo, 2022) [8] . In Uganda, the mulberry silkworm is predominantly reared, with sericulture activities spread across 24 districts, including Bulambuli, Busia, Iganga, Kamuli, Kayunga, Kiruhura, Kween, Luweero, Mubende, Mukono, Nakaseke, Nwoya, Sheema etc. (TRIDI, 2021) [18] . The favorable climate of Uganda supports year-round mulberry growth, facilitating continuous silkworm rearing and silk production. According to TRIDI (2021) [18] , Uganda's sericulture activities are currently being conducted on 1,548 acres of land, with projections of expansion as demand for silk grows both domestically and internationally (Figure 1). The global silk industry is a dynamic sector with immense potential for growth. In 2021, global silk production was estimated at 86,311 metric tons, with China and India contributing to over 95% of the world's mulberry silk production (International Sericultural Commission [ISC], 2021) [6] (Table 1). Uganda holds a strategic position in the African silk market, ranking second after Madagascar, and plays a key role in fostering socio-economic development through sericulture. The increasing global demand for silk, projected to reach $34.1 billion by 2031 (Allied Market Research, 2022) [1] , presents significant opportunities for Uganda to scale up its sericulture industry. By integrating modern technologies and practices, the country could increase its production of raw silk and silk textiles, creating further economic opportunities and boosting its export market share. www.extensionjournal.com Source: Tropical Institute of Development Innovations (TRIDI), 2021 [18] In addition to its potential for economic growth, sericulture in Uganda provides substantial employment opportunities (Figure 2). It is estimated that the silk industry in Uganda employs approximately 2,000 people, most of whom come from economically disadvantaged backgrounds (Vijaykumar et al., 2007) [19] . The sector also promotes the equitable distribution of income, transferring wealth from urban consumers to rural artisans. Activities such as silkworm rearing, cocoon production, silk reeling, and weaving contribute to the livelihoods of many households, positioning sericulture as a powerful tool for rural development and poverty alleviation (Sime & Siraj, 2020; Jayaram et al., 2022) [16,7] . Despite the promising outlook, there is a need for a detailed economic analysis of the costs and revenues associated with sericulture practices in Uganda to assess its full potential. The present study aims to evaluate the economic viability of cocoon and silk yarn production in Uganda, providing critical insights for stakeholders interested in investing in the sericulture industry.

Materials and Methods

This study assessed the economic viability of cocoon and silk yarn production in Uganda. A thorough examination of production costs, revenues, and profitability was carried out, using data from both primary field surveys and secondary sources.

Study Area and Sample Selection

The study was conducted in Uganda's Eastern, Western, and Central regions, where sericulture operations have steadily increased. The study concentrated on sericulture operations in three main districts: Mukono, Sheema, and Kamuli, which are known for their long-standing silkworm farming traditions (Jayaram et al., 2022; TRIDI, 2021) [7,18] . A stratified random sampling strategy was used to pick 50 sericulture farmers from the designated districts. The farmers were classified according to their farm size, silkworm raising experience, and participation in various stages of silk production, such as cocoon harvesting and silk spinning.

Data Collection

A variety of structured questionnaires, interviews, and field observations were used to collect both qualitative and quantitative data. Farmers were given structured questionnaires to collect specific information about their production practices, including silkworm rearing costs (e.g., feed, labour, inputs) and revenue from cocoon and silk yarn sales. In-depth interviews with local sericulture specialists and extension officers were performed to get insight into the sector's issues and potential (Vijaykumar et al., 2007) [19] . Field visits were performed to observe silkworm rearing methods, silk reeling procedures, and mulberry cultivation practices. Economic data, such as the cost of inputs, labour, and capital investment for silkworm farming and silk production, were obtained directly from local farms, while market pricing for silk and cocoon sales were acquired from project reports and market surveys done in the designated locations. The data gathering period ran from January to June 2023, covering both dry and wet seasons to account for seasonal differences in silkworm rearing.

Data Analysis

In the current study, a cost-benefit analysis approach was used to assess the economics of cocoon and silk yarn production, as described by Sharma and Kapoor (2020) [14] . The resources used to produce silk cocoons from 300 DFLs and silk yarn from 8,000 kgs of cocoons were calculated using production estimates. The data was estimated for a one-year period of six silkworm rearing cycles and 250 working days of silk yarn production per unit. The analysis factored in both fixed and variable costs, such as labour, mulberry cultivation, silkworm feed, and processing costs, as well as revenue from cocoon and silk thread sales. The net farm income was determined specifically for the purposes of this study. The gross income per unit for silk cocoon and silk yarn manufacturing was estimated using the current market price.

Costs and Returns associated in sericulture

Sericulture is a labour-intensive agricultural activity that consists of numerous stages, each with its own set of costs. Silk production is normally separated into many stages: mulberry farming, silkworm rearing, cocoon harvesting, and silk yarn processing. Farmers incur both fixed and variable costs at each stage, which ultimately influence enterprise profitability (Reddy et al., 2017) [13] . Understanding these costs and returns is critical for determining the economic viability of sericulture, especially in poor countries where it is frequently considered as a key driver of rural www.extensionjournal.com development.

Cost Structure of Sericulture

Sericulture costs are usually divided into two categories: fixed costs and variable costs (Tirtha et al., 2016) [17] . Fixed costs are those that remain constant regardless of production volume, such as investments in infrastructure (rearing houses, storage facilities), equipment (spinning tools, reeling machines), and mulberry growing area. These costs are often incurred at the start of the manufacturing process and decrease over time. The purchase value and life span of equipment and buildings are considered when calculating annual depreciation or maintenance. Variable costs, on the other hand, are directly proportional to production levels and include labour, mulberry saplings, silkworm eggs, fertilisers, insecticides, and irrigation water. Silkworm eggs and feed, in particular, account for a sizable share of variable costs because they are required for each production cycle (Pandit et al., 2021) [10] . Labour costs, particularly during the rearing and harvesting phases, constitute a significant component of variable costs.

Mulberry Cultivation Costs

Mulberry trees, the main food supply for silkworms, are critical to sericulture and necessitate an initial investment in seedlings, soil preparation, and irrigation systems. Mulberry cultivation costs vary according to land acreage, inputs, and geographical location. For example, in India, the cost of establishing one acre of mulberry cultivation is estimated to be USD 1,200, which includes saplings, fertilisers, labour, and irrigation (Reddy et al., 2017) [13] . Mulberry trees, once established, can produce leaves for several years while requiring relatively little upkeep.

Silkworm Rearing and Cocoon Harvesting Costs

Silkworm rearing entails a variety of activities, such as preparing rearing trays, feeding, monitoring temperature and humidity, and disease prevention. Labour costs are high during this stage due to the necessity for regular supervision. For example, a study conducted in India discovered that labour expenses accounted for roughly 40% of total variable costs in silkworm rearing (Rani et al., 2015) [12] . Silkworm eggs are also an expensive item, as they must be obtained from specialised breeders or sericulture centres. Farmers harvest the cocoons of silkworms when they have finished rearing them. This procedure necessitates more labour and equipment to handle the cocoons, which are then weighed and graded. Quality cocoon production is crucial for profit maximization since higher-quality cocoons command a higher market price (Das et al., 2019) [3] .

Silk Yarn Processing Costs

Silk reeling, which involves boiling the cocoons to remove silk strands, comes after cocoon harvesting. The reeling process is energy-intensive, requiring water, fuel for boiling, and spinning instruments. Farmers often experience additional costs associated with reeling equipment maintenance and energy usage (Tirtha et al., 2016) [17] . The cost of silk yarn processing, including labour and material handling, varies according to the operation's size. These costs are generally high in small-scale enterprises due to inadequate mechanisation, but large companies benefit from economies of scale (Patel et al., 2019) [11] .

Revenue Generation from Sericulture

Sericulture revenue is mostly determined by the number and quality of cocoon production, as well as prevailing prices of silk. Cocoon market prices fluctuate seasonally and are impacted by domestic and international demand and supply dynamics. Similarly, the price of raw silk yarn varies with quality, market conditions, and global demand for silk products (Bhattacharya & Mishra, 2018) [2] . In general, sericulture farmers make more money by producing highquality cocoons and silk, which are more valued in both domestic and global markets.

Measure of Profits from Sericulture

According to Singh (1993) [15] , there are vital measures of farm profit which can be termed as net farm income, farm investment income, and farm business income. For the benefit of the current study, the net farm income has been calculated. The estimates of gross income per unit for silk cocoon and silk yarn production have been estimated based on the current market price. The measures of farm profits are computed as below: Gross Farm Income/ Gross Income = Gross Value of output including the by-product Net Farm Income/Net Income = Gross Income -Cost C While computing the net income, all the associated production costs (Cost-C) are considered.

Results and Discussion

An analysis of the estimated costs and revenue associated in the cocoon and silk yarn production have been computed as shown in the tables 2 and 3 below: The estimates of costs and returns from rearing 300 DFLs is computed and presented as shown in Table 2 above. Based on the estimates, the cost of silk worm rearing including the cost of mulberry establishment, depreciation cost and the annual variable costs equal to Ugx. 6,576,750 per year, while the gross revenue from the sale of silk cocoon and the by-products equals to Ugx. 14,742,000 per year. The net income is thus computed at Ugx 8,165,250 per year with a cost benefit ratio of 1:1.24. This shows that silkworm rearing for cocoon production for six cycles enables an individual to earn a sensible income. Furthermore, using the bivoltine cocoons, 1kg of silk yarn is equivalent to 6kgs of cocoons. Therefore, if 1080 kgs of cocoons are harvested from 6 cycles of silkworm rearing, 180kgs of silk yarn (raw silk) will be produced per year using our innovations. At an average rate of USD 50/Kg of yarn, this results into USD 9,000 equivalent to UGX 33,750,000 from one acre of mulberry per annum. The estimates of costs and returns from silk yarn production using an automated reeling machine (40 End) are computed as shown in Table 3. Based on the estimates, the total cost of silk yarn production, including the depreciation cost of reeling equipment and facilities, procurement of cocoons, cocoon processing, marketing cost of raw silk totals to Ugx 149,263,333 while the gross income from the sale of silk yarn totals to Ugx 277,918,125 annually. The net income is therefore calculated at Ugx 128,654,792 annually with a cost benefit ratio of 1:1.86. This implies that silk yarn production enables companies to earn a sensible income. Furthermore, silk yarn production using an automated reeling machine (40 End) can employ individuals for about 250 working days producing approximately 67 kgs of raw silk yarn can be processed per day equivalent to 16MT annually.

Conclusion and Policy Recommendations

The estimates of cocoon and silk yarn production show that sericulture has the potential of creating employment opportunities for the rural households as well as improving their livelihoods. The models discussed above can also be adopted in other countries practicing sericulture imparting necessary skills and knowledge. The sericulture industry thus provides good prospects for the poor households of Uganda by creating lucrative job opportunities and revenue, utilizing the available resources. The study's findings indicate that government support, innovative technological adoption, proper extension services, and market linkages are required to improve sericulture's income and employment creation potential.

Limitations of the Study

Due to time and resource constraints, the sample size was limited to 50 farmers, which may not accurately represent Uganda's sericulture community. Furthermore, some farmers refused to give their entire financial information, which may have influenced cost estimates. However, every attempt was made to reduce bias by triangulating data from several sources, including project reports and expert comments.

Acknowledgements

The financial support received from the Commercialization of Sericulture Technologies and Innovations in Uganda Project being implemented by Tropical Institute of Development Innovations (TRIDI) is acknowledged.

References

1. Allied Market Research. Global Silk Market Analysis and Forecast to 2031. 2022.
2. Bhattacharya A, Mishra S. Economic analysis of sericulture in India: A case study. J Rural Dev. 2018;38(3):221-236.
3. Das S, Patra S, Pal R. Economic analysis of sericulture farming in West Bengal, India. Agric Econ Res Rev. 2019;32(1):113-125.
4. Dasar D, Kumar R, Verma R. Sericulture as a sustainable livelihood option for rural populations. J Rural Dev. 2021;40(3):261-272.
5. Eswarappa V. Economic potential of sericulture in rural development. Int J Rural Dev. 2009;33(4):215-223.
6. International Sericultural Commission (ISC). Global Silk Production Statistics, 2021. 2021.
7. Jayaram K, Koppula V, Reddy K. Role of sericulture in rural economic development: Case studies from India and Uganda. Int J Dev Stud. 2022;15(2):58-71.
8. Malo P. Types of silkworms and their impact on global silk production. Silk Res J. 2022;10(1):12-19.
9. Muralidharan C, Reddy V. The economics of sericulture in rural India: A review of opportunities and challenges. Int J Rural Dev. 2016;21(2):145-162.
10. Pandit R, Ghosh S, Karmakar S. An economic analysis of sericulture farming in India: Costs and returns. J Econ Stud. 2021;48(2):112-128.
11. Patel N, Modi M, Sharma S. Economic viability of silk yarn production: A case study from Gujarat, India. Agric Econ J. 2019;55(4):301-315.
12. Rani S, Pillai M, Khanna A. Labor economics in sericulture: An assessment of the cost structure. Indian www.extensionjournal.com J Agric Econ. 2015;70(4):45-54.
13. Reddy V, Rani G, Kumar K. Economics of sericulture in rural India: A case study. J Agric Econ. 2017;61(5):329-337.
14. Sharma V, Kapoor S. Role of sericulture in rural livelihood improvement in India and Uganda. Agroeconomy Rev. 2020;28(6):550-559.
15. Singh DK. Technological Change and Agricultural Development. Deep & Deep Publications; 1993.
16. Sime S, Siraj M. Socio-economic benefits of sericulture in rural communities. Afr J Agric Econ. 2020;22(5):403-411.
17. Tirtha P, Sangeeta T, Manjula S. Sericulture industry in India: A review of costs, returns, and profitability. Asian J Agric Econ. 2016;43(3):271-283.
18. Tropical Institute of Development Innovations (TRIDI). Sericulture in Uganda: Status Report 2021. 2021.
19. Vijaykumar G, Ramesh R, Bhargavi K. Employment generation through sericulture: A case study of rural India. Asian J Rural Dev. 2007;12(3):115-124.