Contract farming has capacity to reduce losses, EABC says
For contract farming to be mainstreamed, government needs to come up with policy guidelines on how it will work. Photo / File
What you need to know:
- EABC says trade in agricultural products across the region is easier where there is a contract, which creates an obligation between the farmer and buyer of the produce
The East African Business Council (EABC) has said farmers should embrace contract farming given that it has capacity to reduce losses and improve predictability of the agricultural sector.
Mr John Bosco Kalisa, the EABC chief executive officer, said that in his experience, trade in agricultural products across the region is easier where there is a contract, which creates an obligation between the farmer and buyer of the produce.
However, for contract farming to be mainstreamed, Mr Kalisa said, government needs to come up with policy guidelines on how it will work.
Agriculture remains Uganda’s mainstay, contributing more than 25 percent of the country’s gross domestic product, even as majority of those involved are largely subsistent.
Contract farming brings prospective buyers and farmers together.
Experts say that if implemented well, it will solve a number of issues that have for long dogged Uganda’s produces on the export market – which are largely attributed to the subsistent nature of the agricultural sector
Mr Businge Rwabwogo, the Mukwano Industries general manager, said that under contract farming both the buyer and farmer agree on a certain quality and quantity, which eliminates a number of post-harvest issues.
Contract farming has worked for certain industries such as breweries, sugar and oil seeds, among others.
Therefore, the EACB now believes it is high time that Uganda makes use of contract farming to streamline agriculture, which will be key in helping government to lift at least 39 percent of Ugandans into the money economy.
Agriculture continues to face a number of challenges, among which include quality and price fluctuations, which, under contract farming could be resolved since cost of produce and assurance of quality is pre-negotiated.
