22 April 2014

Uganda: Maize, Banana, Tea Exports Drop

It is a sweet-sounding lyrical phrase that Uganda is the food basket of the east African region.

Yet, looking at the export figures for the first quarter of this financial year as contained in the national budget framework paper (NBFP), all is not rosy in the sector that employs three quarters of Ugandans.

The NBFP for financial year 2014/15 shows that most of the country's key exports have declined. Maize, tea, rice, beans, bananas, fish, all dropped, compared to the same period of the 2012/13 financial year. But improvements were reported in coffee and fruits.

Coffee, which remains the top traditional cash crop export, earned $106.0m (about Shs 275bn) in the first quarter of 2013/14 (July to September 2013), an increase from $95.6m (Shs 247bn) in same period of 2012/13.

Although fish exports declined, they remained among the biggest foreign exchange earners, second to coffee. On the other hand, fruits had the biggest increase in export value, earning the country $492,000 (Shs Shs 1.2bn) in the first quarter of this financial year. Fruit exports jumped from 395 tonnes to 537 tonnes - a 36 per cent increment. Meanwhile, beans and other legumes had the biggest drop.

Biggest drop

"The slowdown was largely driven by the drought conditions that affected agricultural production - resulting in a 1.5 per cent drop in output in the first quarter," says the NBFP, which is the background to the national budget.

This, however, puts the country on the spot over its heavy reliance on weather. The government says it will prioritise providing water for agricultural production to limit reliance on rain.

"Government will also explore the best ways of improving availability of affordable financing to agriculture and micro and medium enterprises development, including restoring Uganda Cooperative Bank," says the paper.

For bananas, the drop could be blamed on the banana bacterial wilt disease that swept across districts such as Bushenyi, Masaka, and Mbarara. In Masaka particularly, people have abandoned banana growing to pineapple because of the disease.

Banana exports decreased to 126 tonnes in the first quarter of this financial year, from 177 tonnes in the first quarter of 2012/13 - a 29 per cent drop. Although agriculture is expected to have a slight increase in its budget allocation, its share remains far below the leading sectors like works, energy, education, and health. The sector is expected to receive Shs 440.7bn in the 2014/15 budget, up from Shs 382.7bn, received in 2013/14.

Poor Soils

The sector's share of the budget remains at three per cent - way below the Maputo declaration of 2003, which obliges African governments to allocate at least 10 percent of their national budget to agriculture.

A recent survey by the Makerere-based Economic Policy Research Centre (EPRC) showed that Uganda's soils had been depleted and could not support any increase in productivity - yet use of fertilisers was very low.

"Only eight in one hundred farm households use inorganic fertilisers and about 26 out of 100 households use organic fertilisers in crop production," said the 2012 study. "Fertiliser use is impacted on by access to support services e.g. extension, irrigation and credit. It is also affected by ownership of assets such as stores, livestock and poultry [which puts most Ugandan farmers out]."


Patience Rwamigisa, the technical adviser to the Agriculture minister, partly blames the sector's predicament on climate change. Appearing on the Hot Seat programme on NTV last Thursday, Rwamigisa advised farmers to consider water harvesting as a possible solution.

"As a ministry, our roles are clear. We set policy directions and local governments are supposed to implement the policies."

"The resource envelope is not enough - there are many competing externalities for the resources," Rwamigisa said, and added: "Efforts on extension services are being given emphasis."

Yet official figures show that only seven per cent of Ugandan farmers get extension services. Rwamigisa said Uganda had more than 4.8 million households engaged in agriculture, and it was extremely difficult for Naads to reach everyone. Meanwhile, callers on the programme blamed government officials and technocrats for being too academic and failing to identify basic problems that farmers face.

"The problem is that we are using the academic people to solve the agricultural problems; they are very theoretical and not fit for the gardens," said a charged caller.

Ugandan farmers say they have lacked government's support in the face of their biggest challenges, which included fake agricultural products on the market. Naads, which was started to give farmers extension services and distribute quality seeds, was accused of failing to achieve its objectives, with the president even threatening to disband it.


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