The New Vision.
Publish Date: Jan 04, 2015
By Clive Drew
There have been some gains made in some of the value chains. But, overall, agriculture is lagging, with only 3-4% growth per year, and certainly short of the CAADP goal of 6%.
We often hear repeated statistics that agriculture contributes maybe 30% to gross domestic product and 30% to export earnings, yet it engages 70% of the population, therefore, it is important. I call this false logic.
Can those 70% ever contribute 70% to the economy and the Government coffers? Never!
Northern Uganda represents a lot of opportunity. Coffee and milk have very good prospects, and the public or private initiatives underway will continue to register progress. Cotton has suffered from world economic events.
Can agriculture fight poverty, malnutrition?
Uganda does not have too many off-farm employment opportunities, so a large proportion of the population is land-based, peasants by default.
When I first came to Uganda in 1995, over one-half of today’s Ugandans were not yet born.
We are witnessing a rapid population growth, an expanding population pyramid and greater pressure exerted on the land-based resource that is deteriorating due to fragmentation, mining of the soils, removal of tree cover and wetland encroachment, among others.
“Climate change” is then the blame. Urbanisation is happening. So, the same acre has to feed more mouths and an increasing proportion of non-subsistence farmers, and also generate exports. Human conflicts are likely to become more prevalent — especially over land rights.
In many respects, it represents a real opportunity. But, unless we have a green revolution, the status quo in agriculture will not eradicate poverty fully. The “jembe” (Swahili for hoe) will not easily make Uganda the breadbasket of Africa. I feel Uganda is rapidly facing a real challenge of feeding its people.
We have serious issues with bacterial wilt in bananas, viruses in cassava, coffee wilt disease, black twig borer, striga, foot and mouth disease, among others and most of these are opportunistic maladies as a result of poor agronomic practices.
I must give credit to Ugandan researchers for addressing solutions to these constraints, but unfortunately these problems and new problems will emerge as the environment is defiled.
Through my consultancy work, such challenges are being addressed for example, good agricultural practices, supporting tissue culture for coffee wilt resistant seedlings and coffee excellence centres, but the uptake is still low compared to the population hence more work required.
From subsistence to commercial farming
I do understand and have personally witnessed that many rural households are trapped in a vicious cycle of poverty. The first step is mind-set change.
Smallholders must commit to farming as a family business and engage in good agricultural practices before graduating into being bankable clients.
A savings culture also needs to be strengthened. Even with the current village savings loan associations and Savings and Credit Co-operative Organisations, the majority of funds are used for consumptive purposes (school fees, feeding, health and burials).
Agricultural financing must only be used for business purposes such as buying improved seeds and fertilisers, where the marginal rates of return are high.
Financing for farming and agro-industry is on the increase and more micro-finance institutions and formal financial institutions are increasing their agricultural loan portfolio — and are even constrained by the number of bankable clients. aBi supports this activity through financial services development, lines of credit and credit guarantees and others.
I think there is also too much of a dependency syndrome — relying on the Government, donors and non-government organisations for subsidy.
Improving marketing
Individual farmers have small volumes, so aggregation in the supply chain is necessary to achieve economies of scale. Agro-processors are generally operating at low levels of capacity utilisation. This impacts on their cost structure and the break-even prices they can pay farmers.
Quality is a major constraint across all value chains. And quality begins at the farm level. Efforts have been put into post-harvest handling, and some progress has been made, but we still have a long way to go. We have sanitary/phytosanitary and food safety issues that can restrict market access.
We should not get overzealous about producers trying to control the entire supply chain. The agricultural economy is liberalised and competitive, institutional structures such as co-operatives must be able to compete in such a business environment. So governance issues are paramount.
Turn potential into reality
There is too much complacency in Uganda - “gifted by nature” and exploiting its comparative advantage of “good climate and fertile soils”. Uganda is no longer a country of 10 million inhabitants.
Many of our neighbours have similar agricultural systems - mostly small-holder production, the majority of which is subsistence.
There are macro-economic similarities when we measure agriculture’s contribution to the gross domestic product, engagement of the active work force and exports. They are also experiencing rapid urbanisation.
Our neighbours in East Africa produce many of the same agricultural products (maize and coffee) and import many of the same commodities (wheat, rice and vegetable oil). Human conflicts (South Sudan and Eastern DRC) and natural disasters are “opportunities based on misfortune” for Uganda’s agriculture. Kenya has only about 20% arable land. It is structurally deficit in its staple crop — maize. But the farmers do use fertilisers and hybrid seeds.
A big opportunity for Uganda, if only we can improve on quality at the farm level and logistics. Kenya is not land-locked, but much of its produce has to still reach a long distance to Mombasa. Its tea and horticulture exports dwarf those of Uganda. Its highland Arabica coffee sells at a premium.
Tanzania is a much larger country, but a large area of marginal or pastoral country and game parks. It has different agro-ecological zones, so is a significant exporter of cashew nuts and cotton.
It is still slowly recovering from its socialist doctrine - something that is often being promoted by politicians in Uganda as the panacea to eradicate rural poverty. Rwanda has a dense population pressure, it fully embraced CAADP and has fraud.
The writer is an agriculture consultant with aBi-trust
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