Mbatau Wa Ngai
20 May 2008
opinion
On the surface, Finance minister Ezra Suruma is right to reject demands from members of parliament to subsidize food prices for the poor.
But a closer look reveals that no government can have legitimacy among its starving citizens. That explains the widespread practice of subsidising farmers in the rich countries and food prices in the middle-level developed and developing countries. The most notable in the latter category is Egypt which subsidizes bread prices by up to 96 per cent.
Irrespective of how it is done, subsidizing food for the poor is a fact of life around the world. To do otherwise amounts to consigning those who, through no fault of their own, cannot feed themselves in times of high food prices to an early grave. And surely, no government that claims to be democratically elected can afford to do that because it would not only undermine its legitimacy but would see it thrown out of power through the ballot.
If Dr Suruma has difficulties on how he can reconcile his economic principles with offering food subsidies he could borrow a leaf from the Ethiopian experience where the poor are paid enough money to buy food in return for building irrigation ditches.
It doesn't take a rocket scientist to see how useful such irrigation ditches could be in many arid and semi-arid parts of Uganda. What's more, the water stored in these ditches could be used during the dry season to water livestock and produce quick-growing crops.
The food-for-work scheme could be extended throughout the country to build access roads particularly in the more productive agricultural areas where up to 40 per cent of the produce goes to waste for lack of access to the market. The poor roads lead to the current inexcusable situation where food is going to waste in one part of the country while people are starving in other parts because they can't afford the resultant high prices.
The Dr Suruma could help further, without breaking his free-market orthodoxy, by reducing taxes on light trucks to encourage entrepreneurs to invest in transport which would be used to ferry food from areas of plenty to the areas of scarcity. The increased supplies would serve to moderate prices to levels where the poor, who would be earning money from digging irrigation ditches and building roads among other public works, could afford to feed themselves and their families.
Dr Suruma could also reduce taxes on agricultural implements and inputs as a way of encouraging farmers to increase production to meet the local and regional demands.
If the Finance minister wants to leave a rich legacy and help cement the government's legitimacy among all Ugandans still further he could go the extra mile and encourage the setting up of an agricultural insurance scheme to cushion banks and financial institutions against losses expected from lending money to farmers. This could lead to higher investment in agriculture and would translate into higher production.
In conclusion, Uganda is going through times that call for leaders to think outside the box if they are to meet the twin challenges of increasing food prices and a growing population. There is no other way.
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