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Revive cooperatives to raise farmer incomes

Farmers taking their produce to the market

Farmers taking their produce to the market

When Finance minister Matia Kasaija said recently that Uganda’s economy had slowed down due to the prolonged drought, there was hardly any public debate about it. Like a footnote in a huge government policy document, Kasaija’s assertion attracted little attention.

To be fair to the minister, this is not the first time Uganda’s economic fortunes have been hedged on a stroke of lack of rains. Bank of Uganda has in the past pointed to drought being behind the shortage of food, which in turn sparks off inflationary pressures and ultimately weaker economic growth figures.

However, when it comes from minister Kasaija, who is in charge of the fiscal policies, the excuse of drought hampering economic growth suddenly becomes loaded. It means at least three things: poverty in rural areas, where much of Uganda’s agriculture takes place, is set to go up; the lack of more irrigation schemes is a problem that needs to be resolved quickly; and there is need for a policy shift towards agriculture, especially one that incorporates the role of cooperatives. 

The situation does not look good. More Ugandans are struggling to put food on the table, according to official government data, with a larger number of the population living on less than two dollars a day.

Just over two out of 10 people in Uganda – or 21 per cent of the population - live on $1.25 a day or less, according to the 2016/2017 Uganda National Household Survey, the latest official data available. This is an increase from the 19 per cent recorded in a similar survey in the year 2012/2013.

Poverty is a social condition characterized by lack of access to food, clothing and shelter. According to a recent nationally representative survey of Sauti Za Wananchi, a nationally representative data collection initiative that uses mobile phones, one of the most serious problems facing Uganda is poverty. The number of citizens citing this has more than doubled to 29 per cent in 2018, from 14 per cent in 2017.

Agriculture in Uganda continues to suffer from climatic variations and farmers often lack information and resources on how to cope through these challenges. The question remains on how to build resilience among the farmers to enable them cope amidst drastic weather changes. Are there alternatives for poor farmers to take on irrigation? Do we have enough storage or processing alternatives to cater for the bumper harvest to guard against erratic price changes?

A World Bank report titled, Closing the potential-performance divide in Ugandan Agriculture 2018, notes that there are different players (farm groups, traders, associations) who play a role in shaping the sector but do not effectively represent the interests of the smallholder farmers.

One of the key safeguards for the smallholder farmers were the cooperative unions. But many of those have since collapsed. Notably, Bugisu Cooperative Union remains active, boosting and sustaining coffee farmers in mainly eastern Uganda.

There is some effort to revive cooperative unions such as putting in place a law that offers a conducive environment for them to thrive. This is critical in mobilizing farmers. The situation is beginning to improve with about 10,000 cooperatives being registered recently (World Bank, 2018).

Farming in Uganda contributes about 24.2 per cent to the GDP, according to the Uganda Bureau of Statistics. Being the occupation where most Ugandans gain their source of livelihood, this is crucial to the growth of the economy and ensuring food security. The reliance on rain-fed agriculture continues to leave Ugandan farmers vulnerable to climatic shocks.

Data from Sauti za Wananchi indicates that compared to other occupations, farmers are more likely to face financial-related setbacks. They are more likely to have a family member drop out of school or lose a family member due to financial reasons.

Saccos and cooperative unions could play a critical role in providing safety nets for the farmers. A clear example is where members can borrow soft loans from their Saccos, while farmers can use their produce as security to secure funds to solve short-term pressures such as paying school fees. Currently, half of the population will turn to friends and family, in an environment where only one household out of five says they have enough income to only cater for their daily needs.

mnanyanzi@gmail.com

The author is a social scientist at Twaweza East Africa.

Comments

0 #1 Lakwena 2019-06-28 13:46
But Marie Nanyanzi, there is too much academics and World Bank and/or rhetoric in Uganda's/Africa economics. E.g. can the regime that sabotaged the Cooperatives for selfish motive revive the same?

Nyet!

E.g. I don't believe in the 22% population and/or less than a dollar a day rhetoric anymore.

In other words, why must it be the World Bank and IMF to tell us under what GDP digit certain group of Ugandans fall?

Don't we have honest Ugandan Economists or mathematicians to tell us the ratio of how many Ugandans live above and/or below the poverty line?

For the fact, many Ugandans including those working, like school teachers, live on no dollar a day.

E.g., suppose a teacher earning UShs.500 a month, but has not been paid for 6 months in a row; is such a teacher/Ugandan still living on a dollar a day?

Neda!
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0 #2 Lakwena 2019-06-28 14:31
Suppose the Cooperatives and the Marketing Boards were left alone; what kind of economy (dollars a day) would Ugandans be earning a today?

Suppose Uganda did not adhere to the draconian IMF/World Structural Adjustment Programme (SAP); how many jobs would have been saved and people's livelihood spared.

In other words, the ripple effect of the SAP drove thousands of Ugandans into desperation and destitution. And as a result, because of eminent social insecurity; it became the trigger point of the current endemic corruption (grabbing) in public offices.

And the unexamined commercialization of education and healthcare, has made things worse.
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0 #3 PaulK 2019-06-30 07:39
Cooperatives are what is needed to control the market prices not Saccos that lack collective bargaining power.

Also it's vital that more focus should be put on exporting. If 70% of Ugandans are farmers selling to 30% of the population and this 30% is only spending 20% of their income on food then we can never get out of the poverty cycle unless we export
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