To boost value addition, 'train farmers and revive co-operatives'

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The bulk of traded agricultural products from Uganda are in raw form, implying that there is limited value addition.

This is partly attributed to the poor linkage between research and development institutions and the agro-value addition industry, according to Prof. Sarah Ssali, a dean of Makerere University's Department of Women and Gender Studies.

During a media appearance in Kampala this week, she argued that value addition in Uganda is at its minimum both in terms of scope and breadth due to a shortage of post-harvest and value-addition technical specialists and inefficient knowledge transfer from research stations to extension services.

“The only way to correct the issues in the sector is to ensure that every structure of government in the sector is working.

"There is a knowledge gap on the ground level. There is a need to provide farmers with the right information because this knowledge hardly reaches the ground where farmers are situated,” said Ssali.

"Farmers sell everything at harvesting and this is because of storage challenges. Someone has to take the responsibility and act.”

Prof. Yusuf Byaruhanga, a food scientist from Makerere University, said there is a lot that is not right along the agricultural value chain, including inadequate agricultural supplies to feed value-addition operations.

“We are largely dealing with small-holder farmers who are stressed with market dynamics and this means that if an offtake from Kenya offers just sh100 over and above what the local market offers, then everything will be swept off and you will have nothing to supply for those doing processing,” he said.

According to Byaruhanga, there has to be a sustained supply to have continuous processing in the sector. “But because the way the system operates is not favourable, value addition becomes a challenge."

Meanwhile, Ssali said zoning would solve several issues in productivity by ensuring that areas with comparative advantage can be supported to grow certain crops or rear certain animals.

She said farmers need to be supported to grow what they can manage but more efficiently. “When you specialize and grow what you are advantaged to, you will get better skills and produce efficiently and this is what farmers from Israel do.”

'Silo operations'

The Minister of State for ICT and National Guidance, Godfrey Baluku Kabbyanga, said farmers must embrace technology and new modes of farming to increase productivity and efficiency.

He also emphasized the need to associate so that they can do bulk production and supply to increase their bargaining power.

“We see a lot of silo operations in the sector. Farmers need to be organized if we are to see progress. When farmers are more organized, they become a bigger force when it comes to accessing the market,” said Kabbyanga.

Ssali said the projects that the Government invests in must connect to the people. “A lot of projects are being built around value addition, but farmers are not connected to farmers.”

This, she said, is the reason Uganda’s value addition sub-sector is still in its infant stage albeit there is enormous potential for expansion and growth.

Dr Agnes Atim, Amolatar district Woman MP, said there is a need to identify the needs of the farmers first.

“Agriculture is an eco-system. It’s not that when you solve value-addition issues you have solved other issues. Sometimes the subject is farfetched because you will find that farmers need to travel 200 miles to access a maize milling machine,” she said.

"As we encourage value addition, we should enable the farmers by providing subsidies and developing an infrastructure that facilitates the value addition we are talking about. And the other issue is that the market is also full of cartels, and this is a huge problem. We need market linkages for what the farmers produce.”

Opportunities

Dr. John Bahana, a consultant in value addition, said that value addition can be done at any stage in the agriculture value chain.

“Even washing your cabbage and packaging it is a value addition. However, our farmers cannot even do these simple value addition things because they are largely unaware of what value addition means,” he noted.

“Other countries like Kenya have adopted value addition for their agricultural produce unlike in Uganda. We need to help the farmers at every stage so that they can appreciate the benefits in value addition,” he said.

While the Ugandan Government is pushing for greater commercialisation of agriculture by encouraging the use of irrigation, value addition, and mechanised farming, Bahana said there is a need for policy guidelines that prohibit selling grain maize to Kenya as more money is earned when you add value.

In addition, he said farmers need to be trained on value addition as well as revive the cooperatives, and the district farm institutes and ensure that technical institutions have value addition centres where farmers can go and learn value addition in different aspects.

MP Atim said that farmers need to be taught to appreciate farming as a business. She said that with the limited resources, there is a need to do the right things and ensure that the sector is well funded.

“We should not stop at production. We need to invest in the technology, the market, and all other processes in the system because when we invest in agriculture you will be increasing the productivity and production,” she said.

According to Atim, when the farmers get more money, their purchasing power will increase and since the majority of the population (70 percent) are engaged in agriculture, the economy will be boosted.

Agriculture financing

Although commercial bank shilling-denominated lending rates reduced to 18.76 percent in March 2023 from 20.24 percent recorded the previous month, according to the finance ministry, experts in agriculture say the rates are still unbearable.

Agriculture financing is less attractive due to the seasonality of cash flows, lack of or no financial records, and small loan sizes for smallholder farmers.

Kabbyanga said that the Parish Development Model is a solution to the challenge of financing as the money targets the parish-level farmer.

Atim said there is money to finance the sector, only that it needs to be collected from wherever it is scattered in different programmes like agriculture credit facilities into one pouch like a co-operative bank.

With this bank that understands farmers' needs, the legislator said they will be able to access cheap credit to maximize production and even do value addition to earn more from their products.

GDP from agriculture in Uganda averaged sh6314.71 billion from 2008 until 2023, reaching an all-time high of sh10729.98 billion in the third quarter of 2021 and a record low of sh1994.51 billion in the first quarter of 2008.