Just like crops, markets have to be cultivated
Posted Wednesday, January 29 2014 at 02:00
The maize season is on. But you will not find many farmers celebrating. Instead they are lamenting over the miserable prices they are being offered for their maize.
In some parts of the country, the price has dropped as low as Shs400 a kilogramme. Yet a few months ago, maize was selling at Shs800 a kilogramme. Does this sound familiar? It should. It is the same old song farmers sing every harvest season. Before it becomes an anthem, farmers need to change this tune, or at least come up with a remix.
There is a huge demand for maize within Uganda and neighbouring countries. South Sudan alone needs a lot of maize to sustain the two warring groups. Humanitarian organisations need maize to feed the thousands of refugees affected by the fighting. West Nile region is already hosting a number of these refugees.
Ideally, with such demand, the price of maize should be going up. But instead it is dropping. Why? Because school is about to resume! Farmers have to sell off their maize to raise money to pay school fees for their children. The traders know this and always take full advantage of the poor farmer who is forced to sell at whatever price is offered, since there is no alternative source of income, and yet the children have to go to school. The problem is not restricted to maize. You should visit the Luweero triangle during the tomato or pineapple seasons. Traders are buying pineapples for as little as Shs300 a piece from the farm.
I know several young corporate employees who always take their annual leave during the maize season. Armed with a salary loan, they buy cheap maize from farmers, mill it and sell the flour. Taking advantage of their access to information, they can predict future market trends and strategically position themselves.
So, what should the ordinary farmer do to avoid getting exploited?
Farmers in other parts of the world have overcome the problem of low prices at harvest time by forming cooperatives to increase their bargaining power. In Denmark, for instance, all dairy farmers belong to one cooperative, which determines the price at which farmers sell their milk. Members who sell below or above the agreed on price are heavily penalised. This way, the individual farmer is protected from unscrupulous traders.
In other countries, a cooperative can lend farmers money to overcome a financial crisis, so they do not sell off their produce at a loss. They also advise their members on what and how much to produce and on when and where to sell their produce in order to maximise their returns. When supply outstrips demand, some cooperatives use members’ savings to buy up the surplus, to sell later at a profit.
Unfortunately, cooperatives in Uganda have been hijacked by politicians who have either run them down, or diverted them from the original mission, to serve their personal political interests instead. In the absence of cooperatives to protect them from exploitative traders, the alternative for farmers is to diversify. Just look around you. The most successful farms in Uganda have a mix of crops and livestock.
In western Uganda, the most successful farmers today are those who have combined livestock with crop production. Traditionally, combining the two was unheard of. The pastoralists despised the cultivators. Before they saw the light, only milk flowed on the village paths. Today, it is milk and bananas.
Depending on one crop, monoculture, is one of the reasons regions like Busoga, Bunyoro and West Nile are vying for the title of Uganda’s “poverty capital”. There are efforts to reduce the overdependence on tobacco and sugar cane.
Unfortunately, the farmers are still stuck in the monoculture mode, replacing tobacco and sugar cane with maize and upland rice. Monoculture may work in developed countries where farmers can expect a government bail out in case of crop failure, but not in Uganda. It is possible to have a field of maize inter planted with beans. It will mean less maize, and more work, but you are spreading your risk.
Instead of growing only maize, can you set aside an area for bananas interplanted with coffee. That way you have three revenue sources instead of one. The best approach is to have one flagship enterprise. In farming lingo, it is the cash cow, supported by several side enterprises. When you have several income streams flowing into your financial pool, it is very unlikely that your cash reservoir will dry up.
One of the first riots in this country was by farmers protesting the colonial government policy which restricted them from adding value to their agriculture produce. Africans were not allowed to add value to the coffee and cotton they produced.
Back then only non-Africans were allowed to own coffee hullers and cotton ginneries. When a few foreign-owned factories were torched by the rioting farmers, the colonial government saw sense and opened up and allowed Africans to join the lucrative agro-processing industry.
It is strange that 75 years later, farmers still think that adding value to their produce is someone’s responsibility, not theirs. If you can mobilise resources to grow 10 acres of maize and look after them for four months, surely you can find the resources to process that maize into flour, and sell it directly to the market.