Economic hardships contract agriculture

Narrowed productivity. High inflation and weak shilling narrowed agriculture investments and productivity.

Kampala

“The year 2011 has been full of puzzles. It has been punctuated with grave challenges and marginal opportunities,” this is how Teopista Namwanje, a farmer in Nalubudde village, Wakiso District, described the year ending.

Just as it was predicated, 2011, was tough for the agriculture sector as hard-hitting economic conditions bedeviling Uganda slowed down investments, production and agro exports.

With inflation having risen from just below 10 per cent at the start of the year to about 29 per cent by the year’s end and the weakening shilling, which at one time nose-dived by close to 25 per cent against the dollar, the cost of production went to new highs.

A combination of the two factors amplified costs of inputs such as seeds and fertilizers and pushed up expenses of opening land and labour as well. The trend ate into small and medium farmers earnings which continued to shrink throughout the year.

High commodity prices
More still, the country experienced high food prices with some commodity prices like sugar, fish and milk rising by over 200 per cent. “Generally, 2011 was hard for everybody,” Mr Daniel Karibwije, the director trade promotion and public relations at the Uganda Export Promotions Board, said.

He said: “Almost every sector has experienced tough times as costs of production escalated in the year. Exports of some commodities such as flowers and fish have dropped due to economic volatilities characterised by the depreciation of the shilling, high inflation and spiking interest rates, unstable power supply and high fuel prices among others.”

However, as the shilling stabilises and inflation relaxes Mr Karibwije predicts a better trend this year. He says, “There is some hope since the government is determined to work on rectifying the current volatilities.”

In the later part of the year most parts of the country experienced bumper harvests, however, farmers in the East and West were maddened with heavy downpours, causing crops to rot in gardens. “The rain has been so destructive. It has damaged all crop, bringing us only but loses,” Ms Margaret Wandera a farmer in Butaleja District said.

However, the state minister for Agriculture Prof Zerubaberi Nyira, believes that agriculture registered growth in 2011. He says the sector performed relatively well and incidences of food shortages were minimal, compared to the previous two years that were characterised by bad droughts. “We have received good rains this year [2011] that has expedited performance for both export and food crops,” he said.

Prof Nyira, who was unable to give statistic of the sector’s performance because districts are yet to file their production figures at the ministry, said “the country managed to meet its production target.”
The minister said the country has also exported a lot of food to South Sudan, Kenya and Democratic Republic of Congo though through informal channels.

Whereas export earnings for some major commodities have suffered a substantial decline this year, coffee export volumes and paybacks have registered upward trends compared to the previous year, statistics from Uganda Coffee Development Authority indicate.

Increased crop exports
Data shows that crop exports increased month by month since July to November 2011 compared to 2010. The October monthly report indicates that coffee export earnings and volumes went up by 12.1 per cent and 14.5 per cent respectively compared to October 2010.

At least 215,285, 60-kilogramme bags of coffee worth $30.5 million were exported in October 2011 at an average price of 236 US cents per kilo, 29 US cents above October 2010. In the same period last year, only 188,012, 60-kilogramme bags valued at $23.3 million were shipped.

Cocoa exports, another major cash crop, also scored an upward trend due to improved productivity and global prices, while tea had fluctuating figures.