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New UBOS report faults government on agriculture Investment

The proportion of Ugandans engaged in agricultural activities has registered a slight increase according to the latest National Services Delivery Survey.

A report, which was compiled by the Uganda Bureau of Statistics (UBOS) shows that the proportion of Ugandans who depend on agriculture increased from 75% in 2008 to 76% in 2015 with crop husbandry still being the common agricultural activity (41%) followed by animal husbandry at 40 %. Coffee was the most commonly-grown crop at 81% followed by rice at 64%while sweet potatoes and oranges were least-grown for commercial purposes.

However, access to financial services, farm inputs, and extension services to boost agricultural productivity remained low. Majority of the respondents (44%) of the farmers said they depend on savings and credit cooperative societies for agriculture financing followed by relatives and friends. Only 12% of the respondents reported banks as the main source of credit for their agricultural financing.

Commercial banks, which had been reluctant to fund the agriculture sector citing high risks, only started showing interest in extending financial services to farmers in 2010 following the signing of a memorandum of understanding with the government, leading to the creation a financial product dubbed the Agricultural Credit Facility (ACF). The NSDS also shows that 28% of the households did not consider the use of agricultural inputs as useful, a factor that continued to limit efforts to improve productivity, with 27 % expressing ignorance about them.

On the other hand, three in ten of the respondents indicated that high costs of inputs are the main reason for non-usage, in addition to high level of bureaucracy involved and long waiting time taken to access government inputs and farm implements. Almost three in ten households said they did not require extension services for crops, with those that required extension services for crop husbandry saying they needed them at least once a season while services for animal husbandry needed them once a month. And while government is the main provider of crop husbandry extension services, group meetings is the most preferred method of receiving extension services.

The reason for this is that there’s poor coordination and communication between the extension workers and beneficiary communities, with households suggesting that any other planned government projects should adopt a working strategy with a representative at community level to ease communication of planned activities. But Ezra Rubanda, the head of trade policy & advocacy at theUganda National Chamber of Commerceand Industry, an umbrella of the country’s largest private sector, told The Independent that they are advocating an agricultural financing model that is not tied on interest rates as a way to boost agricultural financing.

“We believe that it is only through cheap financing that the agricultural sector will be revitalized,” Rubanda says adding, “We need to have an agricultural banks that best understands the challenges facing farmers a well as have a revolving fund or entrepreneurial fund for the farmers.” He says UCCI is also looking at a product that would enable farmers to save and implement their specific agricultural projects.

Ironically, Uganda’s agriculture sector growth has remained stagnant at around 3% or less per annum for the past decade due to low funding yet more than three quarters of the population depends on the sector.


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