Monday, April 1, 2013

UGANDA'S AGRICULTURE CHALLENGE


Uganda’s agriculture accounts for under 25% of the country’s economic output but at least two in three Ugandans rely on it for a livelihood.

You need to look no further to explain the poverty numbers of this country.

In simple terms for every ten shillings of output produced in Uganda three is shared by the majority or about 70% of the population. The remaining seven shillings are distributed among the remaining 30% of the population. A sure recipe for wealth and income inequalities.

At the bottom of the issue is that of low productivity of our farms, the equivalent output of an acre of land is relatively lower than other places in the world.

And the reasons our farmers are unproductive is because we have not graduated from rudimentary agricultural practices. Our agriculture is labour intensive, relies on rain, is carried out on increasingly smaller farm holdings using next to no fertilizer.

To redress this issue should be straight forward.

Improve agricultural practices, halt the fragmentation of land and preferably consolidate land holdings to create greater efficiencies by exploiting economies of scale.

For all our shouting for mechanization, using a tractor on less than an acre of land, which is about the size the majority of farmers eke a living from, is impractical and financially unviable.

President Yoweri Museveni’s announcement that the government is considering the scrapping of NAADS and the bolstering of cooperatives to aid the farmers, is borne of the frustration at the lack of improvements in the general welfare in rural Uganda.

With all fairness to NAADS it really wasn’t given a chance to do its thing, with the least of its worries in adequate financing.

We are hoping for a return to the co-operative model of yester year where not only did they provide a ready market for farmer harvests but also provided heavily discounted inputs and on credit.

But of greater importance is the resuscitation of the extension services function in the agriculture ministry. Capital is important for farmers but knowledge to improve their practices and constant mentoring would eventually lead to higher incomes anyway.
I am very skeptical of government programs, as a rule.

Governments care more about inputs – classrooms, health centers built because it looks good in manifestos and less about quantitative or qualitative outputs.

So if the intervention is going to be through privately owned and run cooperatives, that is a step in the right direction.

Government can help with training of officials and maybe providing auditing oversight, but to pour money into these structures would only guarantee their failure like many other well-meaning initiatives that have come before.

A politically expensive but critical initiative would be to tax all land, especially farm land. This will have the desired effect of getting people to work harder on the land, because defaulting could lead to confiscation and secondly, it would create a more vibrant land market, because those who can’t pay tax can sell it to people who will put more productive use to it.

For agriculture to become more productive there has to be more efficient land use. Agriculture that is more capital than labour intensive. With a population of 35 million we do not need 25 million farmers to feed us.

In the US at end of the Second World War there were 30 million farm jobs or 20% of the population were farmers,  now there are an estimated 1.3 million farm jobs for a population of 300 million Americans. The US is more than food sufficient.

Renew the cooperative movement to provide markets and tax the land to compel farmers to extract more and more value from their holdings and see productivity figures skyrocket.

Of course this is easier said than done but until we face up to the changes needed in rural Uganda our poverty figures will persist.

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