Kampala — Finance minister Matia Kasaija said government has injected Shs100 billion to buy off excess maize stock that has resulted into falling corn prices.
The minister said the money will be available to grain dealers in seven days to support farmers that are currently selling their produce at Shs200.
"Funds will be accessible to all interested traders in the maize business, who have requisite storage, cleaning and drying facilities in order to allow the maize to be stored for at least six months when prices are expected to recover," Mr Kasaija said yesterday in Kampala.
Under the new initiative, a kilogramme of maize will not be sold at less than Shs500. The price of a kilogramme of maize has plummeted from Shs900 last year to Shs200 this year. Consequently, several farmers cannot even recoup half of the operational costs they invested, sparking fears that they will not invest in maize growing next year, a scenario that may lead to future food shortages in the country and the region.
Uganda, currently, produces at least five million tonnes of maize annually but only half is consumed domestically. The rest is exported to deficit maize countries such as Kenya and Rwanda. However, the said countries, due to favourable weather this year, have had a bumper harvest leaving Ugandan farmers stuck with their produce.
Mr Kasaija said the money will be channelled through Bank of Uganda Agriculture Credit Facility.
The Grain Council of Uganda and commercial banks have been incorporated in the initiative that comes as a relief to many farmers.
Since it is a loan, traders will be required to repay the money but Mr Kasaija said banks will not charge more than 15 per cent interest rate on the money.
Agriculture Credit Facility is a joint venture where participating banks and government pool resources together.
The deputy coordinator of Operation Wealth Creation (OWC), Lt Gen Charles Angina, said farmers now have an obligation to ensure that the grains are of high quality and attract higher prices in the near future.
"The traditional way where farmers dry maize on the ground has been found to cause moulds and eventual aflatoxins, which causes cancer," he said.
"My appeal is that farmers put that maize on tarpaulins and when they are to harvest, they should harvest maize which is dry," Gen Angina added.
As a long term measure, Gen Angina said they are partnering with the World Food Programme to put up medium sized storage facilities of at least 300 metric tonnes across the country and so far 10 have been put in place.