Wednesday February 14 2018

State should stay the hell out of people’s gardens and ranches

 

By Charles Onyango-Obbo

Gen Salim Saleh, Presidential Adviser on Military Affairs, and coordinator of Operation Wealth Creation (OWC), was reported by the Daily Monitor to have “demanded” that the government bans the export of unprocessed grains.
“Due to lack of enforcement of standards and open border policy, Kenya, Rwanda and South Sudanese informal traders flock the villages from border to border in search of low priced and processed grains,” Gen Saleh said at a food security event organised by Advocates Coalition for Development and Environment (ACODE) in Kampala, according to the report
He added: “As a result, Kenya, a country always in deficit, formally exports more grain than Uganda. Unless addressed, Uganda will remain a source of cheap, poor quality grain to the region and investors will continue to lose out in spite of their contribution to the national coffers.”

According to Gen Saleh, in November last year, the paper reported him saying, “Uganda exported more than 600 tonnes of unprocessed sorghum, more than 3,000 tonnes of maize, 9,000 tonnes of beans, 2,000 tonnes of millet all in raw form.
“A kilogramme of processed maize costs Shs1,500 as opposed to a mere Shs500 farm gate price”.

On the face of it, Gen Saleh sounds correct. Uganda would do much better, and create more jobs, if it exported processed grains.
The small problem here is that the farmers will not get the Sh1,500. They will still get Sh500 – and even lower, because the Sh500 is driven by demand from the region.
Last October, for example, The East African reported that because of poor harvests due to weather in neighbouring countries, “Uganda has come to the rescue of Kenya and Rwanda, selling both countries more than 11,502 tonnes of maize worth $6.65 million over the past two months…”

Without that demand, farm gate prices would fall sharply. Who would benefit? The fledgling Uganda food processors, who would now buy cheaply. Not surprisingly, some Ugandans are alarmed that the call to ban exports of unprocessed is designed to benefit a few “processors with powerful friends”.
The second problem is that it is based on a misunderstanding of how regional food markets have been reshaped. First, Uganda cannot be a champion of an East African integrated market, and begin pushing for curbs on food exports.

To complicate matters, the farmers in Sebei, rural Bugisu, remote Kisoro, or West Nile, really don’t sell to Kampala or the big towns. In Sebei and Bugisu, they sell to Kenya; West Nile they sell to DR Congo and South Sudan; Kisoro to Rwanda, and so on. And it’s not one way. The biggest market for coffee grown in western Kenya is now Uganda. A few days ago, we all read that “Uganda overtook South Africa for the first time in November as the largest source of goods ordered by Kenyans…which saw electricity and food imports shoot up.
“Kenya’s monthly import bill from Uganda jumped more than two-fold to Sh7.59 billion compared with Sh2.93 billion in October, marking the highest ever recorded monthly imports value from the land-locked country…”

What many people think of as national markets being the same as geographical markets, is a long dead idea. In fact, if Gen Saleh looks back to the trade figures from five years ago, Uganda’s most lucrative export to then still stable South Sudan was not beer, sugar, or food. It was mobile phones, yet Uganda doesn’t even have a factory that boxes phones.
Fourthly, the biggest losses Ugandan farmers suffer is not from exporting unprocessed foods. It’s from post-harvest losses. Nearly 87 per cent of Uganda’s farmers suffer post-harvest losses, and in an eye-popping figure, by 2014, in just two districts —Mubende and Masindi— they were registering more than Shs26b in post-harvest losses every year!

The losses must be scandalously higher today. If you want to help Ugandan farmers, fix post-harvest losses and waste. In fact, doing that alone would lead to an oversupply and price collapse, if that is what processors want.
Fifth, it is bad – and dangerous - politics. Because of the food market structure, and add to it poor infrastructure, if Gen Saleh got his wish, already marginalised areas of Uganda would become poorer.

Back to our farmers in rural Kisoro and Sebei. While they wouldn’t be able to sell to Rwanda and Kenya respectively, they wouldn’t be able to get their produce to Mbarara or Mbale either. They would incur big losses, if they tried.
Sixth, it’s discriminatory. Why impose curbs on beans, millet, maize and sorghum, not beef, milk, chicken, bananas? I can see accusations being made that it’s because President Museveni is a rancher. If you don’t pay for people’s seeds, farm labour, fertiliser, cattle dips, and chicken feed, me thinks you should just stay the hell out of their farm gates.

Mr Onyango-Obbo is the publisher of Africa data visualiser Africapedia.com and explainer site Roguechiefs.com. Twitter@cobbo3