The government will inject 100 billion Shillings into the market to enable individual traders, cooperatives and the Grain Council of Uganda to purchase excess maize that has flooded the market.
The money will be availed by Bank of Uganda from Agriculture Credit Facility and Commercial Banks and let to traders, members of Uganda Grain Council and cooperatives at 15 percent interest per annum who have willingness and capacity to purchase the maize from the market, according to Finance Minister Matia Kasaija.
The intervention comes at the backdrop of a fall in maize prices across the country. A kilogram of maize grain is now selling at 200 Shillings in several parts of the county. However, under the government intervention, a kilo be purchased at not less than Uganda shilling 500.
Kasaija said commercial banks will disburse loans of up to five billion Shilling within 7 days. The ceiling that an applicant can get is Uganda shilling 20 billion. The loan above 5 billion will be disbursed within 20 working days.
The loans will only be given to interested traders requisite drying and storage facilities that can keep maize for up to six months. The maize stock will be part of the loan collateral.
Kasaija said farmers should be careful with post-harvest and maize storage facilities. He warned that buyers will only be interested in good quality maize.
Whereas government is advising farmers not to sell their maize at less than 500 shilling, there are no mechanisms put in place to help farmers identify traders who will be given the fund. When asked on the practical mechanisms, Kasaija said government agreed verbally with traders not to purchase maize at less than 500.