Masindi maize farmers, Maganjo and KCB partner

Sep 14, 2011

Maize farmers in Masindi have partnered with Maganjo Maize Millers and Kenya Commercial Bank (KCB) to boost agriculture production in the district.

By Roselynn Karatsi

Maize farmers in Masindi have partnered with Maganjo Maize Millers and Kenya Commercial Bank (KCB) to boost agriculture production in the district.

The project, which is in a pilot phase, would be extended to other maize-growing areas later, official said.

It is also supported by USAID-LEAD, through Inspired International, which is providing agricultural extension services to the farmers.

“The bank will extend agricultural loans to the farmers and Maganjo will buy the grain under forward sales contracts that co-operating farmers will sign with the miller,” said Christopher Kabagambe, the head of retail banking at KCB.

Over 500 smallholder farmers have so far signed contracts with Maganjo, he added. Only farmers seeking to expand or improve production qualify for funding.

The miller is targeting 1,070 tonnes of maize this season. The project seeks to transform Uganda’s agricultural sector through promoting investment, innovations and trade relationships in the value chain. This, it is hoped, will enhance competitiveness and create growth opportunities for small-and-large businesses.

“About sh580m will be accessed by the farmers under the pilot phase. The money will cover this season and will be increased in subsequent seasons,” said Albert Odongo, the managing director of KCB.

He added that the bank would fund between 2,000 and 3,000 farmers with up to sh3b loans next season. This will later be raised to sh10b, benefiting 10,000 farmers.

Rich Pelrine, the Inspired technical director, said the partnership would ensure food security and improve the livelihoods of rural farmers. Pelrine explained that the farmers would be cushioned against price fluctuations since the forward contracts provide for a floor price.

According to Maganjo, the farmers would be paid either the floor price or according to the prevailing market price, depending on whichever is higher.

“The farmers will have a steady market for their maize by selling directly to a private sector buyer against a guaranteed floor price. They will also have access to funding against their crops from the bank,” the firm said.

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