By Joyce Namutebi
THE opposition has recommended establishment of National Bank for Agricultural Transformation as the epicentre for agricultural finance delivery.
The recommendation is contained in a statement to Parliament by shadow minister for agriculture, animal industry and fisheries, Dr. Francis Epetait in response to the policy statement of the Ministry of Agriculture for this financial year.
The opposition contend that the dismantling of producer cooperatives in Uganda curtailed famers’ access to preferential forms of credit.
They also noted that the share of commercial bank loans and advances to the private sector devoted to agricultural sector in the country has declined overtime.
“The relatively low share of total agricultural loans in private sector lending suggests that the agricultural sector is not accorded the necessary resources by both the commercial banks and the public sector,” Epetait said.
Agriculture’s share of loans declined to about 6% in 2011 from 28% in 1993, he said.
Epetait, who is Ngora MP, observed that small scale farmers simply cannot meet the borrowing requirements.
“Ugandan households predominantly continue to borrow informally from friends and relatives to finance their economic activities or household consumption,” he said.
The opposition decried the low budgetary allocation to agriculture this financial year which stands at 3.19% (Sh473.6b) of the national budget.
He expressed concern that the production and marketing grant has remained constant at sh10b for the last eight year, yet the number of districts and that of farmers in need of support have been increasing.
“Consistent failure to increase public funding to the agricultural sector, which employs over 73% of the working population and is the main driver of other sectors through forward and backward linkages, suggests doubtable government commitment to improving livelihoods of the citizens,” Epetait said.
He noted that having part of the funding for water for agricultural production under the Ministry of Water and Environment, not only causes confusion, but also explains why agriculture is poorly financed.
Like the farmers and other MPs, the opposition is also up in arms against taxing agricultural inputs.
“We warn against taxing the sector. This will not only hit the sector’s further developments, but also have long lasting consequences.” Epetait called for abolishment of the taxes.
Without naming any, he expressed concern that most of the government farms are operating below 30% of their potential adding that quarantine stations are dysfunctional as diseases attack the national herd.
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Opposition want national bank for agriculture