By Matsiko Kahunga
In a space of a few months, I have come across press reports that reveal the dilemma of Uganda’s agricultural sector.
Saturday Monitor, recently carried an interview with the Chief Executive, House of Dawda (the makers of Splash juice), where he decries the firm producing below capacity, due to low production by Uganda fruit growers. At the peak of the harvesting season late last year, the media carried stories and pictures of women in Teso ‘stuck’ with oranges.
In-between the two stories, there was another one reporting that Uganda will begin exporting pineapple pulp. On the occasion of launching the Daima juice brand by Sameer Agriculture and Livestock, it was reported that the company imports pulp from India, Pakistan and Kenya only to add Uganda’s water.
The emerging scenario: farmers stuck with oranges; factories producing below capacity or importing fruit pulp; farmers seeking market for their pulp in Europe. Now, if this not be a rat race, what else can it be?
Where exactly is the problem? One critical factor in agricultural industrialisation is reliability of production, the capacity of the farmers to ensure constant, reliable supply of inputs to the processors.
This is vital for the processors to fully utilise their installed capacity, thus reaping increasing returns to scale, a critical determinant of business viability. Who then shall ensure this and how shall it be done?
Our incessant argument here is that the buck stops with the state.
The milliard, disparate, donor-funded programmes, schemes, mechanisms, and interventions have not yielded any fundamental transformation to the sector.
The key flaw that must be revisited is what one senior pillar of this government has termed the projectisation of development: a factor that has not spared the agricultural sector, as cited among the challenges by the current MAAIF DSIP 2010/11-2014/15. The immediate effect has been the ‘poaching’ of critical skills from the mainstream, extension services to the more lucrative, donor-funded projects, which are usually sub-sector-specific, with straight-jacket guidelines that often focus more on processes and procedures, than the output and outcome, a situation that one head of a district production and marketing department calls a successful operation that leaves the patient dead.
According to him, the project design engages human and financial resources more in procedures and meetings, than with the actual producers.
Government therefore owes it to us.
Take the Agricultural Credit Facility for example. This is a non-performing asset that only serves to embellish speeches on political rallies and other occasions…. …‘government has put in place a low-interest facility in the commercial banks…’. This has not worked and will not work. Last year, it only performed at 12%.
That the fund does not finance start-ups makes it any other conventional commercial bank loan. The requirement for banks to co-finance it 50% is another defeatist factor: banks have several, easier, faster, less cumbersome and more earning portfolios than this one. It therefore does not rank among their priorities. Moreover, save for the two indigenous ones, banks’ policies and business strategies come from elsewhere, not here. The revelation by President Museveni that one bank CEO refused to pick his call at the peak of the KACITA strike tells it all.
Government must pool all the disjointed, scattered funds and get UDC running, investing in key transformative stages of the sector. In the fruit sector for example, all that is needed is simple, affordable irrigation to ensure a predictable value chain.
The technology exists, government has the money and the manpower to effect this, but we are in a rat race: where exactly is the missing link?
The author is a partner at Peers Consult Ltd, Kampala: E-mail: bukanga@yahoo.com
