How agriculture sector can be more profitable

The abundance of food during the Covid-19 lockdown is a clear testimony that Uganda is truly a food basket.
Indeed as President Museveni put it in his State of the Nation address last week, on account of correct agricultural policy, Uganda has a lot of agricultural products for food-security and commerce.
This is in the form of bananas, maize, cassava, beans, Irish-potatoes; sweet potatoes, millet, sugar-cane, cattle for dairy products, cattle for beef and leather, coffee, tea, cocoa, and fish.

“Apart from feeding us, these agricultural products end up by earning for us $2,005m (Shs7.5tn) representing approximately 49 per cent of total merchandise exports if we take the year 2019,” President Museveni said.
President Museveni promised that government is going to focus on these 14 commodities to produce more and better each of these crops or livestock activities.
“We are also going to process industrially each one of them to achieve the full spectrum benefits of each for the local, regional and international markets,” Mr Museveni added.

The global demand for wheat is worth $43.6bn (Shs163tn). This is, potentially, the market that is waiting for the banana flour. The wheat flour imported into Uganda currently, takes $300m (Shs1.1tn) per annum.
When it comes to cassava as a raw material for pharmaceutical grade starch used in making tablets, this is another value addition area the President said should be exploited.
“We have a young pharmaceutical industry (making medicines). Making tablets, for instance, needs high grade starch. This is now being imported from China and India,” the President said.

Importation of starch from China adds a 7 per cent to the cost of medicine per unit, moreover, in foreign currency.
Uganda is now producing 2.6b litres of milk per annum. This rose from 200million litres 34 years ago when Uganda was importing powdered milk from Denmark.
Today, Uganda has a huge surplus since only 800m litres are consumed by the locals out of the 2.6b litres production capacity.
The global demand for milk products is worth $718bn (Shs2, 692tn). This is foreign exchange Uganda can tap into if the surplus is processed and exported.
“Our farmers and processors, however, need to know that to sell internationally, we must have good quality milk and cheaper than the milk of New-Zealand, Ireland,” Museveni said.

Experts react
According to the budget estimates, agriculture has been allocated over Shs1.3 trillion slightly higher than Shs1.0 trillion allocated in the financial year 2019/20.
The President’s ideas are good music to the ears of Ugandans, especially in addressing the subject of import substitution, develop the country’s industrial sector, create jobs and thus spur economic development.
But experts are pondering whether government walk the talk?
Speaking to Daily Monitor, the executive director of Private Sector Foundation Uganda, Mr Gideon Badagawa said: “Potentially, we are a food basket. We should be a food basket, but today we are a net importer of food.”

He said this is happening because as a country, we failed to develop and strengthen linkages between production or agriculture, value addition, industry and the consumer’s which is the market.
“Linkages are not there, Ministry of Agriculture does their own thing, Ministry of Trade which is responsible for value addition and industry also does their own thing,” he added.

East African Cooperation or Ministry of Foreign Affairs, which is supposed to identify foreign markets, looks at the standards and look at all these things is doing their own thing. So there is disjointed in the entire structure.
“As long as we have not assured any producer of the market, we are not going to make a sale,” Mr Badagawa said.

“If supermarkets can off take the eggs, whatever is coming to the supermarket, whatever it is, we are going to be able to provide input for farmers to produce and come to the market,” he added.
So the biggest challenge is how are these linkages going to be developed and strengthen?
He said: “We are talking about agro- industrialisation. How much are we mobilising these dairy cooperatives on milk to be able to feed fresh dairy or whatever it is.”
His impression, in today’s budget reading, Mr Badagawa is dying to see whether money is going to be allotted to sort the challenge of food silos.

“If the private sector can’t invest in food security, government must invest in food security. You can’t preside over a dying population on famine whatever,” he added. He still believes that Uganda has the potential to be the food basket of this region, because the markets are all over the place except for now they have been extorted.
“So for me, it is about organising ourselves, organising the value change. Who to do what to add value, in what way, what is the market looking for and so that you can sustain all through technology, skills, money, credit, whatever it is to support value change development,” Badagawa added.
It is only then that we shall drive value substitution otherwise; we shall continue consuming from China, even food.
Ms Agnes Kirabo of Food Rights Alliance Executive Director, said traditionally, government has been allocating much money in administration costs, with Covid-19 pandemic.

Distribution of inputs
The number of beneficiary farmers targeted to receive inputs was suggested to reduce from the assumption that OWC has distributed for a long time thus the need reduced.
“With Covid-19, farmers have either consumed what would have been their seeds and have no money to purchase other inputs thus need to increase funding for input distribution,” Ms Kirabo said.
She said government should consider increasing funding for non-wage in the extension services sector.

This can be in form or purchase of motorcycles to support the recruited extension workers. Added to this can be increasing funding for technology transfer throughextension workers.
Allocating funds for research in the agriculture sector
New challenges such as Covid19 and another call for new innovations to cope with these changes is the other area Kirabo thinks is vital.
“Thus funding research would help come up with appropriate coping mechanisms in form of inputs, machinery to mention a few,” she added.

STATUS
Uganda is now producing 2.6b litres of milk per annum. This rose from 200million litres 34 years ago when Uganda was importing powdered milk from Denmark.
Today, Uganda has a huge surplus since only 800m litres are consumed by the locals out of the 2.6bn litres production capacity.
The global demand for milk products is worth $718bn (Shs2, 692tn). This is foreign exchange Uganda can tap into if the surplus is processed and exported.
Ms Agnes Kirabo of Food Rights Alliance executive director said government has been allocating much money in administration costs, with Covid- 19 pandemic, these can be reduced and prioritize funding in distribution of inputs. The number of beneficiary farmers targeted to receive inputs was suggested to reduce from the assumption that OWC has distributed for a long time thus the need reduced.